DOL Provides Snapshot of ERISA Enforcement Statistics for Fiscal Year 2022, TPA Escapes Liability for Sending COBRA Notice to Employees Former Address, but Claims Proceed Against Employer, For Sitemap The Final CCPA Regulations: What You Need To Know, Are College Athletes Students or Employees? Various exemptions exist for taxable chemicals. The Notice essentially allows taxpayers untilOctober 31, 2022, to determine whether a Superfund excise tax applies and to calculate how much taxed is owed. The exemptions identify taxable chemicals that are exempt due to their specific use. This law levies taxes on the manufacture, production, or importation of 42 specific chemicals and another 121 chemical substances. 4672(b)(1). 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. Frequently Asked Questions: Superfund Chemical Excise Taxes. More for A15. Tampa | Additionally, prior versions of these FAQs will be maintained on IRS.gov to ensure that taxpayers, who may have relied on a prior version, can locate that version if they later need to do so. How do I calculate the section 4671 tax? These FAQs were announced in IR-2022-131. | Agreed Terms of Use Among the many provisions in that legislation . This tax provided a federal fund to remediate toxic spill sites when a responsible party could not be identified. All Rights Reserved. Service. Heard on: Revenue from a new excise tax on chemicals like Benzene and Mercury would go . Notice 2021-66 does not specify the tax rate for each taxable substance. Expanded Employee Retention Credit (ERC) & how our professionals can assist you. Is the rate different for taxable substances? accounts, Payment, How are substances added to or removed from the list of taxable substances? 429, Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA), How Modern Manufacturing Plants Can Protect Against Ransomware, Cyberattacks, FTC Will Host May 23, 2023, Workshop on Recyclable Claims and the Green Guides. Since the Superfund excise tax expired almost three decades ago, the industrial chemical communitys familiarity with their application is attenuated at best. Matt Levin Jul 2, 2021. Deloittte Tax 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. The original Hazardous Substance Superfund trust was established to pay for the hazardous-substance cleanup program created by the Comprehensive Environmental Response Compensation, and Liability Act of 1980 (CERCLA) The IIJA reinstates the cleanup program until 2031, and the taxes collected are expected to total more than $14 billion over the next ten years. Los Angeles | As defined, the taxable substances appear to stop short of what would be defined as an article according to40 C.F.R. Cherry Bekaert is the brand name under which Cherry Bekaert LLP and Cherry Bekaert Advisory LLC provide professional services. Washington DC |, Copyright 2023 Cherry Bekaert. Superfund tax on chemicals. Deloitte Tax Certain non-fuel and agricultural uses of some of these chemicals were exempted from the excise tax. 3684 (Aug. 2, 2021). 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. . IT and tax departments in particular will need to collect transactional data all along the supply chain, as well any applicable master data. Superfund Chemical Excise Taxes Effective July 1, 2022, excise taxes are reinstated on certain chemicals and imported chemical substances. The Superfund Chemicals tax previously expired in 1995. Part II of Form 6627, Environmental Taxes, will be updated to reflect the tax rate per ton of each taxable chemical. See how we connect, collaborate, and drive impact across various locations. . The applicable tax for a hazardous substance depends on its chemical composition. The term "ton" is. 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 . 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. 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. When enacted, the Superfund was financed by environmental excise taxes on certain commonly used chemicals often found at Superfund sites. Under certain state laws the following statements may be required on this website and we have included them in order to be in full compliance with these rules. The rates are listed in IRS release IR-2022-133 (June 24, 2022). 117-58 (2021). 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. 14Joint Committee on Taxation, Estimated Revenue Effects of the Provisions in Division H of an Amendment in the Nature of a Substitute to H.R. No attorney-client or confidential relationship is formed by the transmission of information between you and the National Law Review website or any of the law firms, attorneys or other professionals or organizations who include content on the National Law Review website. Good News for American Businesses: H1-B Denial Rates Plummet Under USCIS Extends Comment Period for Proposed Fee Increases, OFCCP Rescinds Trump-Era Religious Exemption Rule. 11Infrastructure Investment and Jobs Act, Pub. ADVANCED! 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." However, the first deposit of Superfund Tax is due as early as July 29, 2022. Home Guidance Superfund Excise Taxes on Chemicals and Substances: How to Prepare. The notice also addresses registration requirements to exempt certain sales and uses of taxable chemicals from tax. Background An importer of a taxable substance is subject to the section 4671 tax on the sale or use of the taxable substance on or after July 1, 2022. Strategies for Protecting Standard Essential Department Of Justice Introduces Voluntary Self-Disclosure Policy For Minnesota Supreme Court Clarifies State Law Standards for Severe or Gold Dome Report Legislative Day 25 (2023). of products and services. 4662(b)(1). Sec. Orlando | (b) Amount of Tax The amount of tax imposed by subsection (a) shall be determined in accordance with the following table: (c) Termination No tax shall be imposed by this section after December 31, 2031. Section 80201 of the IIJA reinstates the Superfund excise tax on certain chemical substances under Sections4661and4671of the Internal Revenue Code (Tax Code), effectiveJuly 1, 2022. shipping, and returns, Cookie GT's The Performance Review Episode 19: Is the Fight Over AB 51 5 Reasons Community Associations Need an Attorney That Specializes in New York Proposes Regulatory Review and Approval of Material Health CMS Issues Long-Awaiting Medicare Advantage RADV Final Rule, Preventing the Use of Cryptocurrencies to Evade Sanctions. Amendments. The first quarterly Superfund Tax reporting on Form 720 is due October 31, 2022. Tax is due upon the first use or first sale of a listed chemical in the United States. Explore Deloitte University like never before through a cinematic movie trailer and films of popular locations throughout Deloitte University. Analyzing Superfund Excise Tax calculations and reporting requirements based on a companys unique business scenario. They were reinstated by section 80201(c)(3) of the Infrastructure Investment and Jobs Act (Public Law 117-58, 135 Stat. 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). Substances. After more than 25 years, two excise taxes on chemicals and imported hazardous substances were reinstated in the Infrastructure Investment and Jobs Act (Pub. Notice 89-61provided guidance under the previously applicable Superfund excise tax. (added June 24, 2022), Q14. Breaking the Link New Developments on U.S. Substances. This assessment should include a review of the transaction life cycle, master data setup, cost computation and recognition, and general entry posting. Section 4671 imposes tax on the sales or use of imported "taxable substances" made from those taxable chemicals. The excise taxes are effective July 1, 2022. Exemptions are available for some exported taxable chemicals and substances, as well as for chemicals/substances used in certain kinds of fertilizer, animal feed, and fuel. 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. corporations. 901, for the initial list of substances that the Secretary has added to the list of taxable substances. Are semimonthly deposits required? The tax rates of the listed chemicals were based on the percentage of the individual chemicals found in the hazardous waste sites. msulayman@deloitte.com, Stephane Lunan July 1 is fast approaching and the window to prepare for compliance with the reinstated Superfund Tax is brief. In brief. Explore all Nota Bene Episode 160: European Update: Oliver Heinisch and Scott Federal Communications Commission to Consider Rules and Proposals to Whats the Standard? If you would ike to contact us via email please click here. The taxes apply only to imported chemicals or substances, not those for export. I am an importer of taxable substances. A taxable substance is one that is . 4671. Cherry Bekaert LLP is a licensed CPA firm that provides attest services, and Cherry Bekaert Advisory LLC and its subsidiary entities provide tax and advisory services. Companies must report the reinstated Superfund excise taxes onForm 6627, Environmental Taxes, attached toForm 720, Quarterly Federal Excise Tax Return. Telephone and Texting Compliance News: Regulatory Update February 2023. Assisting with filing the federal excise tax returns and semi-monthly deposit reporting. 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. . A13. 96-125 at 14878 (1979). Section 704.3. When expanded it provides a list of search options that will switch the search inputs to match the current selection. Some highlights on the petroleum products tax are as follows: Imposition of the Tax Charlotte | The latest reiteration of the excise tax will be comprised of two separate taxes on (1) chemical sales and (2) chemical importers. 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. management, Document 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. In fact, companies that export products comprised of taxable chemicals or substances are entitled to a refund if they paid prior to manufacturing. The chemicals selected to be subject to the fee were based on two categories: petrochemical feedstocks and inorganic raw materials. The first return, for the calendar quarter ending on September 30, 2022, is due by October 31, 2022. Analyzing and assisting in documenting available exemptions (e.g., certain taxable chemicals used in the production of fuel). The Act also doubles the tax rate on chemicals or chemical products and expands the reach of the tax. (added June 24, 2022), Q8. Suite. The Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA) established the Hazardous Substance Response Trust Fund (the Superfund), which was to be administered by the Environmental Protection Agency (EPA).2 CERCLA imposed liability for the cleanup of hazardous waste sites on the owners and operators of these sites. 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. The new infrastructure bill revives the Superfund and will impose 42 new excise taxes on chemicals. 48839 (Oct. 21, 1983). (added June 24, 2022), Q9. 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. Customer Reviews: Five-Star Enforcement and the Expanding Regulations. The tax on 4661 chemicals is imposed on a rate per ton of taxable chemical and can range from $0.44 to $9.74 per ton. The consumer and political goals of reducing Americas dependence on foreign oil, enhancing national security, and greening the economy converge in biobased chemicals and advanced biofuels, the promising technology of producing commercial chemicals and fuels from renewable resources. tax, Accounting & 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. 10I.R.C. Superfund Chemical Excise Taxes are reported on Form 6627 (Environmental Taxes), which attaches to Form 720 (Quarterly Federal Excise Tax Return). 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