Exceptional organizations are led by a purpose. EEOC Reminds Employers How to Handle Applicants and Employees With UK's PRA Sets Regulatory Priorities for International Banks, FDA Asked to Allow Healthy Claims on Coffee. Taxable substances are those that contain 20% or more by weight or value of one of the 42 chemicals listed in IRC 4661(b). The IRS has yet to issue detailed guidance or a Frequently Asked Questions (FAQ) document to clarify the nuances of applicability of the reinstated Superfund excise tax. 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 exemptions identify taxable chemicals that are exempt due to their specific use. Excise Tax on Chemical Sales The Superfund excise tax on chemical sales is imposed on 42 listed taxable chemicals on a per-ton basis by taxpayers that manufacture or produce a listed chemical in the United States or import it for consumption, use, or warehousing in the United States. Key considerations for dealings with the reinstated Superfund Tax include: For producers, importers, exporters, and customers of businesses making and distributing identified chemicals and substances, action is needed quickly. The Infrastructure Investment and Jobs Act lowered this threshold to 20%. . Effective July 1, 2022, excise taxes are reinstated on certain chemicals and imported chemical substances. The Leaking Underground Storage Tank (LUST) Fund adds an additional $0.001/gal federal fee. As part of the Infrastructure Investment and Jobs Act signed into law November 15, 2021, the Superfund Excise Taxes go into effect July 1, 2022. chrigong@deloitte.com. sarsmith@deloitte.com, Frank Falvo Substances. The Superfund tax rate will now be adjusted annually to . (added June 24, 2022), Q5. See 40.0-1(c) and 40.6302(c)-1 of the Excise Tax Procedural Regulations. 4671. It is critical for companies to engage in discussions with their IT departments early to prepare for the new reporting requirements. The taxes had previously expired on Dec. 31, 1995, but were reinstated as part of the infrastructure legislation signed by President Biden in November 2021. . Biobased chemicals and biofuels have taken root thanks to both popular appeal and political support. There are two separate Superfund chemical excise taxes: a tax imposed on the sale or use by the manufacturer or importer of "taxable chemicals" listed in section 4661, and a tax on the sale or use by the importer of "taxable substances" listed in section 4672 and IRS Notice 2021-66. Semi-monthly payments should be made by the 15 th and 30 th of each month, but the IRS is providing relief from penalties for non-payment up through the first quarter of 2023. Congress directed the Department of Treasury to publish an additional list of the taxable substances by January 1, 2022. 12I.R.S. There are several potential issues related to taxpayer liabilities, refund considerations, and other recordkeeping requirements to consider with regards to the Superfund Excise Taxes. The current list is published in IRC section 4672(a)(3) and attached as Exhibit B. slunan@deloitte.com, Christina Gong This law levies taxes on the manufacture, production, or importation of 42 specific chemicals and another 121 chemical substances. In the United States, Deloitte refers to one or more of the US member firms of DTTL, their related entities that operate using the "Deloitte" name in the United States and their respective affiliates. 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. Raleigh | 4662(b)(1). Integrated software A8. July 1, 2022. Draft the To Each Their Own: Agency Must Consider Experience of Each Partner in CMS Updates List of Telehealth Services for CY 2023, What You Need to Know About the New Tariffs on Imports from Russia. This would be for the periodJuly 1-September 30, 2022. brands, Corporate income Prior to the expiration of the Superfund Excise Taxes, a chemical substance that was composed of at least 50% of chemicals listed in IRC section 4662 could be found to be a taxable substance. Consider the action items above, particularly the last one, making sure the information systems are in place to capture the data needed to comply with this tax. The petrochemical feedstocks were simpler to identify given the processes involved and included toluene, xylene, naphthalene, benzene, butylene, butadiene, butane, ethylene, propylene, carbon black, and methane. The new infrastructure bill revives the Superfund and will impose 42 new excise taxes on chemicals. 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. Companies must report the reinstated Superfund excise taxes onForm 6627, Environmental Taxes, attached toForm 720, Quarterly Federal Excise Tax Return. services, Comprehensive Environmental Response Compensation, and Liability Act of 1980 (CERCLA). Chemicals used in the production of fertilizer (including nitric acid, sulfuric acid, ammonia, or methane); Sulfuric acid produced as a by-product of air pollution control; Substances used in the production of motor fuel, diesel fuel, aviation fuel, or jet fuel; Substances having transitory presence during the refining process; Substances used in the production of animal feed; or. 52.4661-1 4662-4, 48 Fed. Substances. healthcare, More for Reinstatement of Superfund excise taxes. The taxes, which should go in effect on 1 July 2022, are estimated to raise approximately $14.45bn over a 10-year period (added June 24, 2022), Q6. As this question is likely to arise in the near future when the Superfund excise tax applies, the IRS can be expected to address this aspect. Some deposit amount is still required by July 29 to satisfy the relief provisions set out in Notice 2022-15. 117-58 (2021). Deloittte Tax The Notice essentially allows taxpayers untilOctober 31, 2022, to determine whether a Superfund excise tax applies and to calculate how much taxed is owed. 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. Houston | Identification of the chemical manufacturers and importers subject to the Superfund Tax. technology solutions for global tax compliance and decision _____________________________________________________________________________________________. When is the first return due? This direct tax hike on American producers would result in higher prices for consumers, threaten thousands of jobs, and undermine domestic . Many entities are struggling with its application. The Revenue Reconciliation Act of 1990 further extended the Superfund Excise Taxes through December 31, 1995, after which point the Superfund Excise Taxes expired. Licenses for Exports to Are You Ready for the UPC? Atlanta | A1. Connect with other professionals in a trusted, secure, 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 . The term "ton" is. A9. collaboration. 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). First Offshore Wind Energy Lease Sales in the Gulf of Mexico, Telephone and Texting Compliance News: Litigation Update February 2023. The Superfund Excise Taxes will be reported on a quarterly basis on IRS Form 720, Quarterly Federal Excise Tax. Waters of the United States and Winston Churchill. At that time, the application of the tax and the deployment of funds were quite well understood, and the U.S. Internal Revenue Service (IRS) developed a relatively robust series of guidance documents to explain how the tax operated and who was subject to the tax. Service. However, the first deposit of Superfund Tax is due as early as July 29, 2022. | All Locations, Cherry Bekaert is the brand name under which Cherry Bekaert LLP and Cherry Bekaert Advisory LLC, independently owned entities, provide professional services in an alternative practice structure in accordance with applicable professional standards. 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 . More information on the procedures for petitioning the Secretary to add or remove substances from the list of taxable substances will be released in advance of July 1, 2022. Unless otherwise noted, attorneys are not certified by the Texas Board of Legal Specialization, nor can NLR attest to the accuracy of any notation of Legal Specialization or other Professional Credentials. 4661 imposes tax on the sale or use by the manufacturer, producer, or importer of 42 listed chemicals. 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 are the Superfund chemical excise taxes? See also I.R.C. Do Issuers Fail To File Form Ds Because They Fear Trolls? See Terms of Use for more information. 2023. Fullwidth SCC. On November 15, 2021, President Biden signed into law theInfrastructure Investment and Jobs Act (IIJA), Public Law 117-58, 135 Stat. There are other exemptions as welle.g., for substances that have a transitory presence during the smelting or refining process, or substances derived from coalbut the IRS has yet to issue specific guidance on procedures for claiming these exemptions, so the best recourse available at the moment is to keep documentation that supports the companys intention to take advantage of applicable exemptions. 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. 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. 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." As explained in today's IRS release: An official website of the United States Government. Helping businesses navigate financial due diligence engagements and domestic and cross-border transactions. It is not clear that that the IRS can offer any more relief to taxpayers than has already been given in Notice 2022-15. First, a substance can be added to the list of taxable substances by the Secretary, in consultation with the Administrator of the Environmental Protection Agency and the Commissioner of U.S. Customs and Border Protection, if the Secretary determines that taxable chemicals constitute more than 20 percent of the weight (or more than 20 percent of the value) of the materials used to produce the substance (determined on the basis of the predominant method of production). For purposes of this part, if any organic taxable chemical on which no tax was imposed by reason of subparagraph (A) is isolated, extracted, or otherwise removed from, or ceases to be part of, an intermediate . 4672(a)(2)(B)(2021). 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