Section 80201(c)(1) of the IIJA modified the method for determining whether a substance is a taxable substance by lowering the required percentage of taxable chemicals used to produce the substance from 50 percent to 20 percent of the weight (or the value) of the materials used to produce such substance. Explore all See Notice 2021-66, 2021-52 I.R.B. The Superfund tax rate will now be adjusted annually to . (added June 24, 2022), Q2. The first quarterly reporting for the Superfund Tax on Form 720 is due Oct. 31, 2022. Additionally, the Infrastructure Investment and Jobs Act ("IIJA") double the tax rate on chemicals or . The amount of the section 4671 tax with respect to any taxable substance is generally the amount of section 4661 tax that would have been imposed on the taxable chemicals used in the manufacture or production of the taxable substance if the taxable chemicals had been sold in the United States for use in the manufacture or production of the taxable substance. See section 4672(a)(1). Chicago | In brief. When are the new Superfund Chemical Excise taxes due? 11Infrastructure Investment and Jobs Act, Pub. The Infrastructure Investment and Jobs Act, signed at the end of 2021, reinstates the Superfund chemical excise taxes under Sections 4661 and 4671 of the Internal Revenue Code. Consequently, taxpayers who export taxable chemicals or taxable substances may be eligible for a refund of the tax paid, dependent on agreements with customers as well as their own internal structures. Various exemptions exist for taxable chemicals. A Superfund excise tax on chemicals has been signed into law and went into effect on July 1, 2022. Semi-monthly payments should be made by the 15th and 30th of each month, but the IRS is providing relief from penalties for non-payment up through the first quarter of 2023. Performance Rule Requires Disclosure of Relationship Tech Takeaways: SCOTUS Weighs in on Pivotal Tech Cases. Accordingly, the chemicals are taxed upon the first sale or use after import or manufacture in the United States, and the importer or manufacturer is liable for the excise tax, which it may pass along to its customers.22. Beginning July 1, 2022, a federal excise tax, commonly referred to as the "Superfund Tax," went into effect. With Congresss commitment to advanced biofuels found in the 2007 Energy Independence and Security Act, compelling incentives to invest in and support growth of biotechnologies has spurred record production You are responsible for reading, understanding and agreeing to the National Law Review's (NLRs) and the National Law Forum LLC's Terms of Use and Privacy Policy before using the National Law Review website. Austin | A6. However, Notice 2022-15, 2022-18 I.R.B. A substance may be removed from the list of taxable substances if the Secretary determines that taxable chemicals constitute 20 percent or less of the weight and 20 percent or less of the value of the materials used to produce the substance . By this notice, the IRS gave notice of its intent to effect section 80201 (c) (1) of the IIJA, which reinstates the Superfund Chemicals tax effective July 1, 2022. Report and deposit these taxes quarterly with both: You must pay the Superfund chemical excise tax twice a month. Deloitte Tax Form 6627 must be led alongside Form 720 on a quarterly basis. The Chemicals Superfund Tax and the Hazardous Substances Tax took effect on July 1, 2022 with a ten-year effective . The IRS published IRS Notice 2021-66 on December 13, 2021, which included the list of approximately 100 taxable substances previously considered by the IRS in the early 1990s via individual IRS Notices, which will now be subject to the Superfund Excise Taxes (see Exhibit C).18, The tax is imposed on the importer of the taxable substances and becomes due upon the first sale or use after import. The inaugural reporting for companies required to report Superfund excise taxes is on their third-quarter 2022 Form 720, due to be submitted byOctober 21, 2022. Earlier Superfund excise taxes were 9.7 cents per barrel of crude oil or refined oil products, and a variety of excise taxes, ranging from $0.22 to $4.87 per ton on some 42 chemicals and metal compounds. The new Superfund requires companies to identify which of 42 chemicals they're using, volume of each in production processes and outputs. Part 40regarding filing, deposits, and related procedural issues apply to companies subject to the reinstated Superfund excise taxes. More information about reliance is available. The rate of excise tax per ton is based on the amount of each chemical included in the substance. Now, according to Section 4661, the tax rate for chemicals ranges from $0.44 to $9.74 per ton, depending on how the chemical is being sold, used, or stored. As discussed above, the list of taxable substances was incorporated into the IRC as a result of SARA, effective in 1989. See also I.R.C. The intent of the Superfund Excise Taxes is to target the chemicals primarily found in hazardous waste sites and to tax the chemicals at the earliest point possible in the process. Explore Deloitte University like never before through a cinematic movie trailer and films of popular locations throughout Deloitte University. Chemical tax to clean up toxic sites gets new life as part of infrastructure deal. Heard on: Revenue from a new excise tax on chemicals like Benzene and Mercury would go . A Superfund excise tax on chemicals has been signed into law and went into effect on July 1, 2022. If you require legal or professional advice, kindly contact an attorney or other suitable professional advisor. Nashville | Due to the complicated nature of the Superfund Excise Tax and the granularity of the tax rate structure, gaps in existing systems and processes may exist. DTTL and each of its member firms are legally separate and independent entities. If you would ike to contact us via email please click here. Taxpayers may petition the IRS to determine whether a substance falls within the taxable substances list. Exceptional organizations are led by a purpose. EPA Announces Availability Of Environmental Justice Thriving Energy & Sustainability M&A Activity February 2023, OSHA Implements Pilot Program to Streamline Complaint Intake Process. Unlike the static list of 42 taxable chemicals, the taxable substance list is subject to change. 4671(b)(2). Companies with large volumes of transactions should consider automating their tax calculation and reporting processes. IRC section 4662(e) provides for a refund of the Superfund Excise Tax for the exporter of both taxable chemicals and taxable substances. The relevance of this guidance to the new tax is unclear. L. 117-58. L. 96- 510, 42 U.S.C. Suite. See also section 4661(b) for the tax rate for taxable chemicals. Section 4671 imposes tax on the sales or use of imported "taxable substances" made from those taxable chemicals. Do not delete! NLR does not answer legal questions nor will we refer you to an attorney or other professional if you request such information from us. Customer Reviews: Five-Star Enforcement and the Expanding Regulations. policy, Privacy The Infrastructure Investment and Jobs Act (the IIJA), signed into law on November 15, 2021, reinstated two environmental excise taxes that had been terminated over twenty-five years ago. The tax is assessed based on the amount per ton sold by the taxpayer, with applicable tax rates ranging from $0.44 per ton to $9.74 per ton. For hazardous substances, the taxable event is the importation of the substance by an importer, and the tax is due upon the first sale or use after the substance is imported. Federal excise tax rates remain at $0.183/gal for gasoline and $0.243/gal for diesel fuel. Inferences, however, can be made from the absence of any mention in the law. A5. As explained in today's IRS release: The Superfund Excise Tax is imposed on the manufacturer or importer of the listed chemicals, and the tax becomes due upon the first use or sale in the United States.15. The Superfund is a federal excise tax on various hazardous chemicals. Form 6627 must be filed alongside Form 720 on a quarterly basis. When is the first return due? What Is the Difference Between a Grandfathered and a Grandmothered Health Plan? (added June 24, 2022), Q15. Comprehensive A3. collaboration. Its also important to understand the tax calculation and reporting requirements and to align with other business functions to implement a process to meet data, process, and system requirements. Tampa | Analyzing and assisting in documenting available exemptions (e.g., certain taxable chemicals used in the production of fuel). First, the Section 4661 chemical excise tax rate was doubled from its prior iteration to a range of $0.44 per ton up to $9.74, depending on how a chemical (from a list of 42) is sold or used. Raleigh | ffalvo@deloitte.com, Marshal Sulayman When the owner or operator was not identified, or the site cleanups needed to be expedited, financing for the cleanup was to be provided by the Superfund. Greenville | Such exemptions include methane or butane used as a fuel, chemicals used in the production of fertilizer (including nitric acid, sulfuric acid, ammonia, or methane) and substances derived from coal. Reminder: High-Earning Exempt Professionals Must Be Paid a "True Gold Dome Report Legislative Day 24 (2023). Connect with other professionals in a trusted, secure, All Rights Reserved. Is there a way to check the status of an application for Activity Letter G registration? Richmond | Excise taxes are reported on a quarterly basis on IRS Form 720, Quarterly Federal Excise Tax. Effective July 1, the Infrastructure Investment and Jobs Act (IIJA) reinstated the excise taxes imposed on certain chemicals and imported chemical substances under IRC Sections 4661 through 4672 (Superfund excise taxes). (added June 24, 2022), Q9. How Modern Manufacturing Plants Can Protect Against Ransomware, FTC Will Host May 23, 2023, Workshop on Recyclable Claims and the Appellate Court Affirmed An Order Denying A Beneficiarys Request For An Overview of Why Class Action Privacy Lawsuits May Have Just Gotten Gold Dome Report Legislative Day 26 (2023). Tax Senior Manager The list of 42 chemicals and their respective excise tax rates is found in Internal Revenue Code (IRC) 4661(b). statement, 2019 A taxable chemical is a chemical that is (i) listed in section 4661(b), and (ii) manufactured or produced in the United States or entered into the United States for consumption, use, or warehousing. services, Comprehensive Environmental Response Compensation, and Liability Act of 1980 (CERCLA). Hydrocarbon streams containing mixtures of organic taxable chemicals. 22The IRS does not require that the tax be included in the total cost of the product or separately line itemed in an invoice. Nor will we refer you to an attorney or other suitable professional advisor Exempt Professionals be. To check the status of an application for Activity Letter G registration mention. Sara, effective in 1989 for diesel fuel an attorney or other suitable professional advisor list. 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