Superfund Tax Chemicals List According to the IRS, 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. Below is the current list of taxable chemicals. 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. 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. To put this in context, tax rates for taxable chemicals range from $0.44 to $9.74 per short ton. When do the Superfund chemical excise taxes go into effect? See 40.0-1(c) and 40.6302(c)-1 of the Excise Tax Procedural Regulations. A Superfund excise tax on chemicals has been signed into law and went into effect on July 1, 2022. Sightline is a tax platform that makes the entire tax process more collaborative and insightful. There are two lists of which importers, producers, buyers, sellers, and exporters need to be aware of: Taxable Chemicals include basic feedstocks listed under the law that incur a Superfund tax. Some or all of the services described herein may not be permissible for KPMG audit clients and their affiliates or related entities. 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 Joint The Superfund Chemical Excise Tax was created in 1980 through the Comprehensive Environment Response, Compensation, and Liability Act. Any taxable chemical or substance also qualifies for a Superfund Tax Credit. They were reinstated by section 80201(c)(3) of the Infrastructure Investment and Jobs Act (Public Law 117-58, 135 Stat. If you require legal or professional advice, kindly contact an attorney or other suitable professional advisor. Houston | A15. The Treasury Department and the IRS (collectively the IRS) have released Notice 2022-15, which provides relief for certain reinstated Superfund chemical excise taxes The initial list of 50 taxable substances is found in IRC 4672(a)(3). Navigating the complex terrain of excise taxation and uncovering opportunities, Stay informed on excise tax-related news with ourKPMG TaxNewsFlasharchive. See the full disclaimer. Additional clarification and guidance are expected in the upcoming months. Sign up to receive the latest BDO news and insights. 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. The tax Cherry Bekaert: Tax, Audit and Advisory Services, Superfund Excise Taxes on Chemicals and Substances: How to Prepare, Starting a New Business & Launching Successfully: Tax and Business Planning Tips, IRS Rev. If your company is a business that manufactures, produces or imports any of the listed chemicals or substances, determine your liability for the taxes. Aerojet and its subsidiaries have researched, designed and made rocket engines and chemicals on site since 1953. She has worked extensively with clients in the medical, medical technology, manufacturing, retail, and food service industries. Her experience includes clients of all sizes from Fortune 500 firms to single location hospitals. The Reinstated Superfund Excise Taxes. Richmond | Notice IR-2022-132 focused on issuing tax rates for 121 taxable substances. This webcast discusses the three Superfund Excise Taxes that are now in place, recent trends, and hot topics to be aware of as organizations solidify processes and procedures to ensure compliance by October 31, 2022. IRS publishes initial Superfund chemical list January 11, 2022 The IRS recently released guidance ( Notice 2021-66 ,) providing key information on the excise taxes imposed on certain chemicals and substances under Sections 4661 and 4671often referred to as Superfund excise taxes. Reconciling FHA Implements COVID-19 Property Charge Repayment Plan for HECM America the Beautiful: Number of New Citizens at 15-Year High. There are actually two types of Superfund excise taxes: a tax on the sale or use of chemicals by the manufacturer, producer or importer of those chemicals and a tax on the sale or use of imported substances comprised of more than 20 percent in weight or value of taxable chemicals. The entities falling under the Cherry Bekaert brand are independently owned and are not liable for the services provided by any other entity providing services under the Cherry Bekaert brand. Read about the challenges and opportunities that could lie ahead. Permit & License. Tax Implications and Financial Business Guidance Regarding the Coronavirus. Instead, Section 4671(b) provides that the amount of tax imposed with respect to any taxable substance is equal to the amount of tax that would have been imposed by Section 4661 on the taxable chemicals used as materials in the manufacture of the taxable substance, if such taxable chemicals had been sold in the United States for use in the manufacture or production of the taxable substance. This will result in six deposits being made per quarter (special rules apply in September). Your company could bear the economic burden of the tax being passed on from your suppliers, and, in turn, your company would then need to consider its ability to pass on the economic cost of the excise tax to its customers. Identify exempt chemicals and substances under export rules. Tax News & Views, our current events-focused tax podcast, can help provide clarity on the latest tax news and developments that could affect your business. The revived The new tax doubles the previous tax rate on Taxable Chemicals and Taxable Substances. The Inflation Reduction Act (Pub.L. (Note that industry is requesting that the IRS establish a fixed rate by agreement between the IRS and Industry but it remains to be seen if this will be adopted by the IRS). 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 recent reinstatement of Superfund chemical excise taxes on certain taxable chemicals and specified taxable substances takes effect July 1, 2022, and will be imposed through 2031. Is there a way to check the status of an application for Activity Letter G registration? The full list of taxed chemicals and substances can be viewed here. A Superfund tax is imposed when a taxable chemical is imported, or is domestically produced for sale or use unless an exemption applies. While the final taxable substance list and exact rates have yet to be finalized, costs will be calculated by weight or value of the contained taxable chemical. 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. These Superfund tax credits can be taken by either the importer, the manufacturer, or the exporter, depending on the commercial agreements that have been established among those parties. Substances treated as taxable will significantly increase over the pre-1996 levels, when the threshold determination only applied when more than 50% of the substances weight or value consisted of taxable chemicals. Exporters will not be taxed. 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. The Infrastructure Investment and Jobs Act signed into law November 15, 2021, reinstated the Superfund Excise Taxes (Superfund Tax) on chemicals and substances. The calculation of the superfund excise taxes is complex, and accurate reporting data can help companies reduce their tax burden. Aside from this quarterly filing, taxpayers with a quarterly liability of greater than $2,500 will be required to make semi-monthly tax deposits of at least 95 percent of the net tax liability incurred during the tax period (unless a safe harbor By continuing to use this site, you are giving consent to cookies being used. The Infrastructure Investment and Jobs Act signed into law November 15, 2021, reinstated the Superfund Excise Taxes (Superfund Tax) on chemicals and substances. Sitemap These FAQs detail what the Superfund chemical excise tax is, how the tax is computed, and who may be liable for the tax. Semimonthly periods are the first through 15th of the month and 16th through the end of the month, with the deposit being due the 14th day following the end of the semimonthly period. 429, Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA). The Superfund Excise Tax: Back in action. Companies with large volumes of transactions should consider automating their tax calculation and reporting processes. (added June 24, 2022), Q3. For more detail about the structure of the KPMG global organization please visithttps://home.kpmg/governance. Due to the complicated nature of the tax assessments, and the detailed information required, gaps in existing systems and processes may exist. The excise tax applies to companies that manufacture, produce, or import any of the 42 specific chemicals listed in Section 4661 of the Tax Code, including ammonia, butane, The site is 15 miles east of Sacramento, California. Section 4671(a) imposes an excise tax on the sale or use of a taxable substance by the importer of the taxable substance. The information contained herein is of a general nature and based on authorities that are subject to change. In 2022, IRS received petitions to add polyoxymethylene and polyphenylene sulfide to the list of The Superfund chemical taxes should be reported on Form 720, Quarterly Federal Excise Tax Return, and Form 6627, Environmental Taxes. Additional exemptions exist for substances taken from coal or substances present during the smelting or refining process, however, the IRS has yet to give guidance on obtaining these exemptions. As reinstated, the excise tax rates are doubled from pre-1996 levels and range from $0.44 cents per ton to $9.74 per ton. Does Your Cyber Insurance Policy Cover a Ransomware Attack? 177-58) and was signed on November 15, 2021. There are two ways a substance can be added to or removed from the list of taxable substances pursuant to section 4672(a)(2) and (4). Aerojet and its subsidiaries have The recent reinstatement of Superfund chemical excise taxes on certain taxable chemicals and specified taxable substances takes effect July 1, 2022, and will be imposed The NLR does not wish, nor does it intend, to solicit the business of anyone or to refer anyone to an attorney or other professional. Financial Institutions Require More Oversight of Cybersecurity Risk Bill Would Allow Shareholders To Phone It In. Statement By Secretary Walsh On the Telecommunications Workforce EPA Announces Appointments to Local Government Advisory Committee. Exporters that export either a taxable chemical or taxable substance generate Superfund credits. The Superfund Excise Tax on chemical sales is back! Additionally the new legislation also decreased the threshold amount from 50% to 20% of Austin | $300 plus $0.090 per each acre-foot greater than 10 acre-feet. Gas tax holiday: impact of changes in motor fuel tax rates, Tax automation: the ultimate guide to tax process efficiency, Reporting If you are a manufacturer or importer, it is essential that your organization be prepared to report and remit the excise tax. This ABA Tax Times article provides an illustration of the challenges faced by the oil and gas industry in applying one of these special rules related to two products derived from natural gas: methane and butane. Any later updates or modifications to these FAQs will be dated to enable taxpayers to confirm the date on which any changes to the FAQs were made. That number will likely change as substances are added to or removed from the list of taxable substances pursuant to section 4672(a)(2) or (4). 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