As part of the Infrastructure Investment and Jobs Act (“the Act”), H.R. 3684, enacted by Congress on November 5, 2021, the Internal Revenue Code (IRC) will be modified to reinstate the chemical production Superfund excise tax contained in IRC § 4661. President Biden signed the legislation on Monday, November 15, 2021.
The tax was originally enacted in 1980 and imposed until 1995. It established funds to clean up chemically contaminated waste sites. Improving the environment is a key element to the Act. The Act changes the termination date of § 4661(c) to December 31, 2031. The amount of tax due under § 4661(b) is amended to read:
“(b) AMOUNT OF TAX—The amount of tax imposed by subsection (a) shall be determined in accordance with the following table:
The tax is the following amount per ton:Acetylene$9.74Benzene9.74Butane9.74Butylene9.74Butadiene9.74Ethylene9.74Methane6.88Naphthalene9.74Propylene9.74Toluene9.74Xylene9.74Ammonia5.28Antimony8.90Antimony trioxide7.50Arsenic8.90Arsenic trioxide6.82Barium sulfide4.60Bromine8.90Cadmium8.90Chlorine5.40Chromium8.90Chromite3.04Potassium dichromate3.38Sodium dichromate3.74Cobalt8.90Cupric sulfate3.74Cupric oxide7.18Cuprous oxide7.94Hydrochloric acid0.58Hydrogen fluoride8.46Lead oxide8.28Mercury8.90Nickel8.90Phosphorus8.90Stannous chloride5.70Stannic chloride4.24Zinc chloride4.44Zinc sulfate3.80Potassium hydroxide0.44Sodium hydroxide0.56Sulfuric acid0.52Nitric acid0.48
The taxes will apply to the production and importation of these chemicals. They are double the rate they were initially imposed in 1980. It will increase costs to numerous businesses as well as create excise tax compliance burdens. The reinstatement of the tax will take effect on July 1, 2022.
Our Ryan experts have been monitoring the Act, and, based on previous experience with the Superfund taxes, are well equipped to assist you with the reinstatement of these laws after more than 25 years of inactivity.
TECHNICAL INFORMATION CONTACTS:
Mark L. Nachbar
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