See section 4671(b)(1). The applicable rates of tax and related provisions are also modified since the expiration of these taxes in 1995 (Infrastructure Investment and Jobs Act, November 15, 2021). It's codified in IRC Sections 4671 and 4672, both of which were added by the Superfund Amendments and Reauthorization Act of 1986. Under the new law, the excise tax applies to the use, sale, or import of 42 taxable chemicals and 151 hazardous substances. The IRS has issued lists for both the chemicals and substances included (under Section 4661 and 4671 of the Internal Revenue Code, respectively), but has cautioned importers that items on the list could change as chemicals or substances are either added or removed from the list over time. Since its reinstatement, the excise tax has raised many questions and caused significant industry consternation. 3684 (Aug. 2, 2021). Reg. For taxable chemicals, the manufacturer, producer, or importer of the taxable chemical is responsible for reporting and paying the section 4661 tax to the IRS. 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. This would make the first tax deposit covering thefirst half of July 2022due byJuly 29, 2022. 4Id. The IIJA reinstates the two taxes with several modifications. The Superfund Chemicals tax previously expired in 1995. 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. 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. During the first, second, and third calendar quarters of2023, the IRS will not withdraw a taxpayers right to use the deposit safe harbor rules of the Excise Tax Procedural Regulations at 26 C.F.R. This effectively doubled the tax rate of the imported taxable substances as well, and the Infrastructure Bill further increased the alternative method of calculation of the taxable substances to 10% the value of import. consulting, Infrastructure Investment and Jobs Act (IIJA), passed last November, the Internal Revenue Service (IRS) has reinstated the. healthcare, More for 18I.R.S. Section 40.6302(c)-1(b)(2), for failure to make required deposits of Superfund excise taxes if the requirements set out in the Notice are met. US Executive Branch Update February 27, 2023. First Offshore Wind Energy Lease Sales in the Gulf of Mexico, Telephone and Texting Compliance News: Litigation Update February 2023. 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. Cherry Bekaert is the brand name under which Cherry Bekaert LLP and Cherry Bekaert Advisory LLC provide professional services. Helping businesses navigate financial due diligence engagements and domestic and cross-border transactions. 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. Analyzing transactional and master data gaps given existing company system capability and data quality. 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. 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. Notice 89-61provided guidance under the previously applicable Superfund excise tax. Tax is due upon the first use or first sale of a listed chemical in the United States. 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. . Heard on: Revenue from a new excise tax on chemicals like Benzene and Mercury would go . However, the first deposit of Superfund Tax is due as early as July 29, 2022. of products and services. When enacted, the Superfund was financed by environmental excise taxes on certain commonly used chemicals often found at Superfund sites. (added June 24, 2022), Q12. As defined, the taxable substances appear to stop short of what would be defined as an article according to40 C.F.R. How are substances added to or removed from the list of taxable substances? The Basics of Californias Outside Salesperson Exemption. Form 6627 must be filed alongside Form 720 on a quarterly basis. sarsmith@deloitte.com, Frank Falvo A3. 19I.R.C. Deloitte Tax Heavy metals, halogens, acids, and bases are significant raw materials for many toxic inorganics.) A semimonthly period is the first fifteen (15) days of a calendar month or the portion of a calendar month following the 15th day of the month. Social login not available on Microsoft Edge browser at this time. The current list is published in IRC section 4672(a)(3) and attached as Exhibit B. It is critical to Update company information systems to collect the transaction and master data needed to comply with the Superfund Tax. 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. 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. *Note: Self-assessing based on 10% of appraisal value will almost always yield a higher tax rate than either of the other methods. policy, Privacy Comprehensive 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. accounts, Payment, The new Superfund requires companies to identify which of 42 chemicals they're using, volume of each in production processes and outputs. DTTL (also referred to as "Deloitte Global") does not provide services to clients. . Section 4671(a) imposes an excise tax on the sale or use of a taxable substance by the importer of the taxable substance. brands, Corporate income Taxable substances are those substances listed in either section 4672(a)(3) of the Code or Notice 2021-66. Who is responsible for reporting and paying Superfund chemical excise taxes? | Agreed Terms of Use A15. A semimonthly period is the first fifteen (15) days of a calendar month or the portion of a calendar month following the 15th day of the month. The Superfund was to be financed through environmental excise taxes, including: (1) excise tax imposed on domestic crude oil; (2) excise tax imposed on imported crude oil and petroleum products; and (3) domestically produced and imported petrochemicals and inorganic chemicals. This would be for the periodJuly 1-September 30, 2022. 4662(e). Section 704.3. When expanded it provides a list of search options that will switch the search inputs to match the current selection. Telecommunications, Media & Entertainment, Budget bill extends and addresses fuel excise taxes and incentives, Budget reconciliation, infrastructure, and what comes next. Historical reporting requirements for Superfund excise taxes Prior to the expiration of the Superfund excise taxes in 1995, taxpayers were required to register under Form 637, Application for Registration (For Certain Excise Tax Activities), activity letter G (Persons making inventory exchanges of taxable chemicals under section 4662(c)(2) or persons selling or buying Sec. Section 80201 of the bill would revive long-expired Superfund excise taxes at twice their previous level. Superfund Chemical Excise Taxes Effective July 1, 2022, excise taxes are reinstated on certain chemicals and imported chemical substances. 4671. . For purposes of claiming refunds under section 4662(e) for section 4661 tax paid on chemicals used in the production of an exported substance, in the case of a petition of an importer or exporter (i) that is filed and accepted by the Secretary before January 1, 2023, (ii) that seeks to add the substance to the list of taxable substances, and (iii) based on which the Secretary adds the substance to the list of taxable substances, both the filing date of the petition and the date the substance is added to the list of taxable substances will be deemed to be July 1, 2022. Criminal Referrals and OSHA Violations, Part III: Industry Standards Oregon House Revenue Committee Set to Hear More About Pro-Taxpayer Buying or Selling a Small Business Government Contractor? (a) General rule There is hereby imposed a tax on any taxable chemical sold by the manufacturer, producer, or importer thereof. L. 96- 510, 42 U.S.C. Are semimonthly deposits required? Various exemptions exist for taxable chemicals, including: Additionally, the export of taxable chemicals is eligible for a refund of any tax paid on the chemical.16, The IRS published proposed Treasury Regulations in 1983 specific to the taxable chemicals to further detail the methods of reporting the tax, as well as provide more detail on all the provisions concerning the tax.17. A12. The initial list of 50 taxable substances is found in IRC 4672(a)(3). 4671(b). Litigation Setback for Employers Under Illinois Biometric Information Senate Committee Holds Hearing on Future of Low Carbon Transportation North Carolina Senate Passes Compassionate Care Act at Exactly 4:20 States and Feds Signal Big Changes to Telehealth Prescribing. The relevance of this guidance to the new tax is unclear. 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. Appear to stop short of what would be defined as an article according to40 C.F.R, Telephone and Texting News. Caused significant industry consternation appear to stop short of what would be for the periodJuly 1-September,... Short of what would be for the periodJuly 1-September 30, 2022, excise taxes are on. Brand name under which Cherry Bekaert Advisory LLC provide professional services social login not available on Microsoft browser! And services and master data needed to comply with the Superfund was financed by environmental taxes... 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