The Superfund Tax is effective as of July 1, 2022 and will remain in effect until the end of 2031. 4671. The Superfund tax rate will now be adjusted annually to . The Superfund chemical taxes will be reported on Form 720, Quarterly Federal Excise Tax Return, and Form 6627, Environmental Taxes. tax, Accounting & Do Issuers Fail To File Form Ds Because They Fear Trolls? This tax provided a federal fund to remediate toxic spill sites when a responsible party could not be identified. 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. See how we connect, collaborate, and drive impact across various locations. When people refer to Superfund taxes, they're generally referring to excise taxes that are imposed on taxable chemicals listed under section 4661 and then taxable substances that are. See section 4671(b)(3). brands, Corporate income Assisting with design and implementation of automated tax calculation and reporting processes to be compliant with federal laws and regulations. A1. Boston | How are substances added to or removed from the list of taxable substances? When do the Superfund chemical excise taxes go into effect? First Offshore Wind Energy Lease Sales in the Gulf of Mexico, Telephone and Texting Compliance News: Litigation Update February 2023. 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. 3. See section 4671(b)(1). The return of the Superfund excise tax on chemicals affects taxpayers that manufacture, produce, or import certain chemicals, as it imposes an excise tax on the sale of 42 specific chemicals listed in Section 4661 of the tax code, including ammonia, butane, benzene, mercury, and other common products. When are the new Superfund Chemical Excise taxes due? The return of the chemical excise tax affects taxpayers that manufacture, produce, or import certain chemicals, as Superfund Chemical Taxes are imposed on the sale of 42 specific chemicals (Taxable Chemicals) listed in 4661 (Chemical Sales Excise Tax), including ammonia, butane, benzene, mercury, and other common chemicals. Sitemap Each chemical has a specified rate of tax, imposed on a per-ton basis, as identified in Exhibit A. Desperate Times, Desperate Measuring Cups FTC Brings Enforcement Trending in Telehealth: February 20 26, 2023, IRS Sets Deadline For Using 401(K) Plan Forfeitures, How Generative AI Generates Legal Issues in the Games Industry, DOJ Announces New Nationwide Voluntary Self-Disclosure Policy. This Week in 340B: February 21 27, 2023. Implications of the revitalized Superfund tax for chemicals has been saved, Implications of the revitalized Superfund tax for chemicals has been removed, An Article Titled Implications of the revitalized Superfund tax for chemicals already exists in Saved items. At Deloitte, our purpose is to make an impact that matters by creating trust and confidence in a more equitable society. The IRS is expected to issue guidance prior to theJuly 1, 2022, effective date of the Superfund excise taxes. EPA Announces Availability Of Environmental Justice Thriving Energy & Sustainability M&A Activity February 2023, OSHA Implements Pilot Program to Streamline Complaint Intake Process. See section 4672(a)(1). The taxes apply only to imported chemicals or substances, not those for export. (added June 24, 2022), Q3. Report and deposit these taxes quarterly with both: You must pay the Superfund chemical excise tax twice a month. The IRS is working on calculating tax rates for taxable substances and will release the tax rates as they become available. Any legal analysis, legislative updates or other content and links should not be construed as legal or professional advice or a substitute for such advice. Superfund Chemical Excise Taxes are reported on Form 6627 (Environmental Taxes), which attaches to Form 720 (Quarterly Federal Excise Tax Return). This memorandum explains why. Is the rate different for taxable substances? 429 (2021)), effective July 1, 2022, with modifications to the applicable rates of tax and other provisions related to those taxes. L. 117-58), effective July 1, 2022. Prior to their expiration in 1995, the Superfund excise taxes were used to fund theHazardous Substance Superfund, established by theComprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA). South Florida | On Dec. 14, 2021, the IRS issued Notice 2021-66, which provides guidance on implementing the reinstated Superfund excise taxes, and followed up on June 24, 2022, with an FAQ . Congress directed the IRS to publish a list of additional taxable substances by January 1, 2022, which was published by the IRS via IRS Notice 2021-66.12, In addition to increasing the tax rate, the Infrastructure Bill lowered the threshold as to what is considered a taxable substance for importers or exporters who wish to request a determination from the IRS. View Full Firm Disclosure. Please join our EY cross-functional panel of professionals for a webcast focused on the recently enacted Infrastructure Investment and Jobs Act, specifically the reinstatement and expansion of the Superfund chemicals excise tax. For taxable substances, the importer of the taxable substance is responsible for reporting and paying the section 4671 tax to the IRS. The information here is by no means comprehensive, but it does provide a basic understanding of the law and its implications for affected companies. media, Press It is not clear that that the IRS can offer any more relief to taxpayers than has already been given in Notice 2022-15. In addition, most hazardous wastes are produced by these industries or as a result of using products from these industries. The Superfund chemical excise taxes are reported on Form 6627, Environmental Taxes, which is attached to Form 720, Quarterly Federal Excise Tax Return. A Review of the Developing Legal Landscape Surrounding the "Student-Athlete" Debate. Companies opting for the latter run the risk, however, of incurring penalties, should the IRS adopt a different view. Please see links for details: Learn more about Superfund Excise Tax changes effective July 1, 2022, including key considerations for dealings with the reinstated Superfund Tax on chemicals and substances. Our use of the terms our Firm and we and us and terms of similar import, denote the alternative practice structure of Cherry Bekaert LLP and Cherry Bekaert Advisory LLC. No. Until then, companies may take the IRS previous position as an indication of how it is likely to view articles and fabricated products under the current Superfund excise tax. 4662(b)(1). The Superfund Chemical Excise Tax was created in 1980 through the Comprehensive Environment Response, Compensation, and Liability Act. The current list is published in IRC section 4672(a)(3) and attached as Exhibit B. A taxable substance is defined as a substance that contains 20% or more by weight or value of any one of the chemicals listed in Section 4661 (down from 50% in the previous iteration of the law). Fullwidth SCC. Fast forward to today. Heres how to analyze the implications and plan now for the revitalized Superfund Excise Tax. DeloitteTax Los Angeles | Confidentiality and Non-Disparagement Agreements with Non-Supervisory USCIS Confirms It Will Accept Employment-Based I-485 Applications New Jersey Enacts Bill of Rights for Temporary Workers, DOJ Implements Nationwide Voluntary Self-Disclosure Program. | Privacy Policy Excise taxes are reported on a quarterly basis on IRS Form 720, Quarterly Federal Excise Tax. making. However, the inorganic raw materials required a multi-tiered rubric: (1) the material must be hazardous in a number of forms; (2) the material in some form must be hazardous if spilled; (3) the material must be produced in a large amount; and (4) the material must be capable of increasing the hazard potential of other elements.5, Congress intended for the fees to be imposed "at the beginning of the commercial chain of production, distribution, consumption, and disposal of hazardous substances." Many entities are struggling with its application. IRC section 4672 additionally directed importers and exporters to request a determination from the IRS as to whether a specific unlisted chemical substance should be included in the list of taxable substances. The rates are listed in IRS release IR-2022-133 (June 24, 2022). It is imposed on any taxable chemical sold or used by a manufacturer, producer, or importer on or after July 1, 2022.It also is imposed on any taxable substance sold or used by the importer on or after July 1, 2022.The Superfund Tax funds the Hazardous Substance Superfund Trust Fund . Chemicals. management, More for accounting Please enable JavaScript to view the site. A4. 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. After more than 25 years, two excise taxes on chemicals and imported hazardous substances were reinstated in the Infrastructure Investment and Jobs Act (Pub. There are 42 chemicals listed in section 4661(b). Charlotte | Additionally, Form 6627, Environmental Taxes, was previously used to report the Superfund Excise Taxes when the taxes were last in effect, and this form will be used again to report the taxes owed. Service. Taxable substances are those substances listed in either section 4672(a)(3) of the Code or Notice 2021-66. The Infrastructure Act essentially doubles these rates with taxes ranging from $0.44 per ton to $9.74 per ton. Section 80201 of the bill would revive long-expired Superfund excise taxes at twice their previous level. The legislation would impose an excise tax of fractions of a penny on crude oil and oil products, and between six cents and $14.30 on chemical feedstocks, while it would tax corporate income over $4.7 million at less than 1%. Additionally, the Infrastructure Investment and Jobs Act ("IIJA") double the tax rate on chemicals or . (added June 24, 2022), Q12. The Superfund Excise Tax is not permanent and . Various exemptions exist for taxable chemicals. Cherry Bekaert LLP is a licensed independent CPA firm that provides attest services to its clients, and Cherry Bekaert Advisory LLC and its subsidiary entities provide tax and business advisory services to their clients. firms, CS Professional (added June 24, 2022), Q2. The Infrastructure Investment and Jobs Act (IIJA) reinstated the excise taxes imposed on certain chemicals and imported chemical substances under Internal Revenue Code sections 4661 through 4672 beginning July 1, 2022. (added June 24, 2022), Q10. There are two separate Superfund chemical excise taxes: a tax on the sale or use of "taxable chemicals" under section 4661 of the Internal Revenue Code and a tax on the sale or use of imported "taxable substances" under section 4671 (all section references are to the Internal Revenue Code unless otherwise stated). Breaking the Link New Developments on U.S. In addition to having deep tax technical knowledge surrounding federal excise taxes, Deloitte leverages leading technology tools and processes. Therefore, a chemical substance could qualify as a taxable substance if taxable chemicals listed in IRC section 4662 constitute more than 20 percent of the weight (or more than 20 percent of the value) of the materials used to produce such substance.13, The Superfund Excise Taxes are currently set to expire on December 31, 2031, and are expected to generate $14.4 billion of revenue (or approximately $1.2 billion annually).14, IRC section 4661(b) lists 42 chemicals, identified in Exhibit A. . | Careers As noted above, importers are not required to use the IRS-prescribed tax rates for the section 4671 tax and may calculate their own rates. The applicable tax for a hazardous substance depends on its chemical composition. See Section 4671(b)(2). _____________________________________________________________________________________________. The Leaking Underground Storage Tank (LUST) Fund adds an additional $0.001/gal federal fee. discount pricing. The unique considerations of butane and methane require taxpayers further down the supply chain to be aware of the procedural issues affecting chemicals. *Note: Self-assessing based on 10% of appraisal value will almost always yield a higher tax rate than either of the other methods. 2022 Superfund excise taxes. sarsmith@deloitte.com, Frank Falvo No such update has been issued to date, however. . policy, Privacy Find the tax rates for 121 taxable substances. Accordingly, these FAQs may not address any particular taxpayer's specific facts and circumstances, and they may be updated or modified upon further review. The Superfund Excise Taxes will be reported on a quarterly basis on IRS Form 720, Quarterly Federal Excise Tax. IRS issues Superfund chemical excise tax rates IR-2022-132, June 24, 2022 WASHINGTON The Internal Revenue Service announced today that it has prescribed tax rates for 121 taxable substances that are subject to the Superfund chemical excise tax imposed by section 4671 (a) of the Internal Revenue Code (Code). What happens if an importer does not calculate the section 4671 tax? These FAQs detail what the Superfund chemical excise tax is, how the tax is computed, and who may be liable for the tax. The specified. Companies with large volumes of transactions should consider automating their tax calculation and reporting processes. Exemptions from the application of the excise tax are listed atSection 4662(b)of the Tax Code. Providence | How does a company report the Superfund Chemical Excise Tax? The Superfund excise taxes are set to expire at the end of 2031. Internal Revenue Code (IRC) section 4671 thereby imposed the same tax on imported substances as was already included in the cost of domestically purchased substances. What is the purpose of the Superfund Chemical Excise Taxes? 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. The Superfund Tax rate for chemicals range from $048 per ton for nitric acid to $9.74 per ton for Benzene. The Superfund tax is assessed on the manufacturer or importer of these chemicals. In November 2021, President Biden signed the Infrastructure Investment and Jobs Act. Notice 2021-66 suspended the existing procedure inNotice 89-61for an importer or exporter to petition the IRS to add or remove substances from the list, pending the issuance of additional guidance. Frequently Asked Questions: Superfund Chemical Excise Taxes. Calculating the federal excise tax liability, including taking into account available exemptions. The Infrastructure Bill lowers the thresholdfor a chemical substance to meet the definition of taxable substance, thus more imports may be subject to this tax. An official website of the United States Government. Unlike the static list of 42 taxable chemicals, the taxable substance list is subject to change. customs, Benefits & Words With Friends, Part 1: Insurance Requirements and Contracts, Legislator Proposes To Expand CFL To Encompass "Commercial CERCLA PFAS Scope May Broaden To Many More PFAS, AI Avatar App is the Latest Target of BIPA Class Action Litigation. Heard on: Revenue from a new excise tax on chemicals like Benzene and Mercury would go . Yes. Try our solution finder tool for a tailored set A13. Hydrocarbon streams containing mixtures of organic taxable chemicals. The list of 42 chemicals and their respective excise tax rates is found in Internal Revenue Code (IRC) 4661(b). FAQs 3S. At what point in a transaction do the new taxes kick in? The Treasury Department and the IRS reportedly intend to update Notice 89-61 to reflect the changes made to Section 4672(a)(2) by the IIJA and to make other changes that may be necessary. Because these FAQs have not been published in the Internal Revenue Bulletin, they will not be relied on or used by the IRS to resolve a case. The content and links on www.NatLawReview.comare intended for general information purposes only. A taxable substance is one that is . Please see www.deloitte.com/about to learn more about our global network of member firms. Second, an importer or exporter of a substance (or other interested person) can petition the Secretary to add the substance to or remove the substance from the list of taxable substances. Section 4671 imposes tax on the sales or use of imported "taxable substances" made from those taxable chemicals. A15. WASHINGTON The Internal Revenue Service announced today that it has prescribed tax rates for 121 taxable substances that are subject to the Superfund chemical excise tax imposed by section 4671(a) of the Internal Revenue Code (Code). 429.Section 80201 of the IIJA reinstates the Superfund excise tax on certain chemical substances under Sections 4661 and 4671 of the Internal Revenue Code (Tax Code), effective July 1, 2022.Section 80201(c)(1) of the IIJA modified the method for determining . Companies with a large volume of transactions should consider automating their tax calculation and reporting processes to increase efficiency and accuracy. Some states have laws and ethical rules regarding solicitation and advertisement practices by attorneys and/or other professionals. On November 15, 2021, President Biden signed into law the Infrastructure Investment and Jobs Act (IIJA), Public Law 117-58, 135 Stat. 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