on The Reinstated Superfund Excise Tax for Chemicals and Imported Substances, How Finance and Accounting Outsourcing Helps Companies Grow, How Sage Intacct Real Estate Simplifies Property Management and Reporting. Delivering tax services, insights and guidance on US tax policy, tax reform, legislation, registration and tax law. If you are not responsible for paying and reporting the excise tax to the IRS but purchase any of the listed chemicals or substances from your suppliers, review the potential economic impact of the reinstated excise tax on your company. As defined, the taxable substances appear to stop short of what would be defined as an article according to40 C.F.R. If the importer does not calculate the section 4671 tax for a taxable substance and the IRS has prescribed a tax rate for the taxable substance, the tax is calculated using the rate prescribed by the IRS. The National Law Review is not a law firm nor is www.NatLawReview.com intended to be a referral service for attorneys and/or other professionals. Deposits, if required, must be made electronically, often requiring submission before the actual due date to process timely. (added June 24, 2022), Q3. Kti Chemicals Inc is a superfund site located at 1170 Sonora Ct, Sunnyvale, CA 94086. (added June 24, 2022), Q12. WebEffective July 1, 2022, Congress has revived the Superfund Excise tax on Taxable Chemicals and Taxable Substances that previously existed from 1980 through 1995. A diversity, equity and inclusion video series. 11 In addition to the reinstatement of the taxes, the Infrastructure Bill doubled the prior rate of tax on the 42 listed chemicals. Since the Superfund excise tax expired almost three decades ago, the industrial chemical communitys familiarity with their application is attenuated at best. 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. Washington DC |, Copyright 2023 Cherry Bekaert. 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. - January 2023 Edition. The A2. The Superfund Excise Taxes are currently set to expire on December 31, 2031. 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. FHA Implements COVID-19 Property Charge Repayment Plan for HECM America the Beautiful: Number of New Citizens at 15-Year High. When do the Superfund chemical excise taxes go into effect? Data Security Forty-two chemicals and 151 hazardous substances are taxable; however, each is taxed differently. The first reporting of Superfund excise taxes is due October 31, 2022 (for the period July 1, 2022, through September 30, 2022). 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. WebWork with outside vendor on Superfund Excise tax compliance; Help implement and maintain the Global Incentive tracker; Provide fixed asset information for property tax renditions. It is not clear that that the IRS can offer any more relief to taxpayers than has already been given in Notice 2022-15. 117-169), which was signed into law on August 16, 2022, reinstated the Petroleum Superfund Tax at a rate of 16.4 cents per barrel. Companies might receive a refund of the tax paid if they export products made with specific chemicals and substances if they paid before manufacturing. WebTax Podcast: The Superfund Excise Tax: Back in action President Bidens Infrastructure bill revitalized the long-expired Superfund Excise Tax on chemical sales, which goes into effect July 1. Raleigh | 1043, provides transitional relief for the third and fourth calendar quarters of 2022, and the first calendar quarter of 2023, regarding the failure to deposit penalties imposed by section 6656 for failures to deposit Superfund chemical excise taxes through March 31, 2023. . The Notice essentially allows taxpayers untilOctober 31, 2022, to determine whether a Superfund excise tax applies and to calculate how much taxed is owed. Excise taxes are reported on a quarterly basis on IRS Form 720, Quarterly Federal Excise Tax. The first quarterly Superfund Tax reporting on Form 720 is due October 31, 2022. The Superfund chemical taxes will be reported on Form 720, Quarterly Federal Excise Tax Return, and Form 6627, Environmental Taxes. The taxes will affect companies that manufacture, produce or import listed taxable chemicals or import specified taxable substances, as well as, indirectly, customers of such companies. July 1 is fast approaching and the window to prepare for compliance with the reinstated Superfund Tax is brief. The tax 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. 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. Similarly, if an FAQ turns out to be an inaccurate statement of the law as applied to a particular taxpayer's case, the law will control the taxpayer's tax liability. July 1, 2021 thru June 30, 2022. Companies are likely to be caught off guard by this reinstated tax. Apprehended Woman Dies in Eagle Pass, Texas Soft Sided Facility, U.S. Customs and Border Protection Department of Homeland Security. On December 27, 2022, the Treasury Department and the Internal Revenue Service issued interim guidance in the form of Notice 2023-7, addressing how the new corporate AMT applies to partnership interests, consolidated return groups and other significant events that affect corporations, including merger and acquisition activities and excepted cancellation of debt income. Accordingly, a manufacturer, producer, or importer of a taxable chemical is subject to the section 4661 tax on the sale or use of the taxable chemical on or after July 1, 2022. Read more about the three reinstated excise taxes. Taxable Chemicals. What are the Superfund chemical excise taxes? Nothing in the statute or in Notice 2021-66, for example, references manufactured items in the context of taxable substances. The tax law is included in the Infrastructure Investment and Jobs Act that was signed into law on November 15, 2021. 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. There are two separate Superfund chemical excise taxes: a tax on the sale or use of "taxable chemicals" under section 4661 of the Internal Revenue Code and a tax on the sale or use of imported "taxable substances" under section 4671 (all section references are to the Internal Revenue Code unless otherwise stated). 901, for the initial list of substances that the Secretary has added to the list of taxable substances. 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 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 applies). (added June 24, 2022), Q10. The Superfund chemical excise taxes previously expired on December 31, 1995. Accordingly, the procedural rules in26 C.F.R. Notice 2021-66 does not specify the tax rate for each taxable substance. This Superfund Tax is assessed only on importers of taxable substances and is due upon the first sale or the first use after import into the United States. This memorandum explains why. 117-169), which was signed into law on August 16, 2022, reinstated the Petroleum Superfund Tax at a rate of 16.4 cents per barrel. Part 40regarding filing, deposits, and related procedural issues apply to companies subject to the reinstated Superfund excise taxes. Chicago | The Superfund Chemicals Excise Tax Makes a Comeback. Its tax re-imagined. See section 4671(b)(1). Under the rules, a late fee of 5% may be applied on the amount due for each month the form remains delinquent up to a total penalty of 25%. Please see www.pwc.com/structure for further details. More substances are expected to be added in the future, but the list as it stands is available below. Cherry Bekaert is the brand name under which Cherry Bekaert LLP and Cherry Bekaert Advisory LLC provide professional services. Final Regulations Governing Illinois Equal Pay Acts Certification Weekly Bankruptcy Alert: January 17, 2023 (For the week ending Bankruptcy Court Allows Service of a Subpoena Via Twitter. A Superfund excise tax on chemicals has been signed into law and went into effect on July 1, 2022. Manufacturers, producers or importers that sell or use any of these chemicals must pay a tax of $0.22 to $4.87 per ton, depending on the chemical. Superfund is also imposed when a taxable substance is imported for consumption, use, or warehousing. Managing Director, Excise Tax Practice, KPMG US, Senior Manager, Tax | WNT - SALT Income & Incentives, KPMG US, Partner, Tax, Accounting Methods & Credits, KPMG US. You will also have to determine how your company will pass on the tax to your customers. Client Advisory Board, 1175 Lombardi Access Rd., Ste 500, Green Bay, WI 54304. Part III. What happens if an importer does not calculate the section 4671 tax? The section 4661 tax is imposed as a rate per ton of a taxable chemical. The Superfund chemical excise taxes are reported on Form 6627, Environmental Taxes, which is attached to Form 720, Quarterly Federal Excise Tax Return. How Law Firms Can Leverage ChatGPT To Get More Cases, FTC Pursues Crackdown on Employee Noncompetes, Chapter 93A Litigation Newsletter | 4th Quarter 2022, Landmark NLRB Decision Expands Labor Violations, Weekly IRS Roundup January 9 January 13, 2023. The Inflation Reduction Act (Pub.L. 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. Applicants for registration may call 859-320-4091 and select menu option #1. FS-2022-31, June 2022. The National Law Review - National Law Forum LLC 3 Grant Square #141 Hinsdale, IL 60521 Telephone (708) 357-3317 ortollfree(877)357-3317. (added June 24, 2022), Q15. 429, Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA). 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. 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. The Superfund Excise Tax on chemical sales is back! Superfund Chemical Excise Taxes Effective July 1, 2022, excise taxes are reinstated on certain chemicals and imported chemical substances. Unless your company is a manufacturer or importer of chemicals and substances, there is no additional reporting required regarding the superfund excise tax. Excise Tax on Corporate Stock Repurchases Under the Inflation Getting Healthcare in 2023 and BeyondVirtuallyand Securely. Partner, Tax Controversy and Regulatory Services, PwC US. Florida Woman Sentenced to Prison for False Statement to Investigator Idaho Man Indicted for Federal Hate Crime Against LGBTQ Residents of EPA Proposes Cleanup Plan for Sulphur Bank Mercury Mine Superfund B&C Biobased and Sustainable Chemicals Practice Group Bergeson & Campbell, P.C. In these cases, the other person would be liable for paying the excise tax, not the initial importer. The Anti-Money Laundering Act of 2020 Gets a Glow Up: Congress FINRA Files Amendments to Proposed Rule Change That Will Allow Remote Corporate Practice of Medicine Doctrine: Increased Enforcement on the Environmental Justice Update: EPA Announces $100 Million in EJ Grants Insurers Beware of Silent Crypto Exposure: PART III, Silent Crypto Court Rules that Brown Bread is Not Misleading, Whats Next in Washington? If the importer does not calculate the section 4671 tax for a taxable substance and the IRS has not prescribed a tax rate for the taxable substance, then the amount of tax is 10 percent of the appraised value of the taxable substance as of the time the taxable substance was entered into the United States for consumption, use, or warehousing. Nearly three decades after expiring, the Superfund chemical excise tax is back. Boston | Legal Disclaimer|Privacy Policy | Copyright 2022 IGenFuels LLC. 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 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. That tax expired in 1995, but was partially reinstated on November 15, 2021, when President Biden signed the Bipartisan Infrastructure Law into law. The Superfund taxes are expected to generate approximately $14.5 billion over a 10-year period. Charter Brokerage can help you mitigate the Superfund taxes paid on these taxable chemicals. (added June 24, 2022), Q8. | Privacy Policy 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. Proc. Go back five years for manufacturing drawback. No other Superfund tax refund service provider has the experience of Charter Brokerage. A7. SECURE 2.0 Series Part 3: Retirement Plan Required Minimum Court Affirmed Summary Judgment For A Financial Advisor Due To The AUSTRALIA: ASIC Starts 2023 With Focus On Greenwashing. BDOs excise tax professionals can help affected companies by performing a phased approach to determining the impact of the Superfund chemical excise taxes on your business. See the full disclaimer. The Superfund Chemical Excise Tax is set to expire in 2031 and is expected to bring in an estimated $14 billion that will go to assisting the clean-up of hazardous waste disposal sites. The Aerojet General Corp. Superfund site covers about 5,900 acres near Rancho Cordova. The Time Is Now: Comment Period Open For The Federal Trade Commission Canadas Foreign Buyers Ban: What You Should Know About the Ban on CMS Proposed Rule for Refunding Overpayments Would Align With False EPAs Proposal to Tighten the Fine Particulate NAAQS: Whats Proposed Commonwealth Court Strikes Down 2021 Accessibility Regulations as Is Texas Getting Ready to Expand Its Compassionate Use Program? Petitions to Add Polyoxymethylene and Polyphenylene Sulfide. Inferences, however, can be made from the absence of any mention in the law. Second, an importer or exporter of a substance (or other interested person) can petition the Secretary to add the substance to or remove the substance from the list of taxable substances. Manufacturers, laboratories and other businesses may begin to see these excise taxes passed along to them on invoices from their suppliers. The Environmental Protection Agency (EPA) identifies sites such as Kti Chemicals Inc because they pose or had once posed a potential risk to human health and/or the environment due to contamination by one or more hazardous wastes. Richmond | For consideration: Notice 2022-15 provides notable relief for taxpayers during these initial quarters. It states that it was Congress intent that taxable substances only include chemicals that are intended for further chemical conversion. In Notice 2021-66 the IRS published a list of 100 additional substances subject to the Superfund Tax. Elizabeth supports clients with sales and use tax nexus studies, tax registration, voluntary disclosure agreements, audit representation, item taxability, overpayment recovery, and exposure audits. The Superfund Chemicals Excise Tax Makes a Comeback. If you would ike to contact us via email please click here. Applicability of the information to specific situations should be determined through consultation with your tax adviser. A taxable substance is any substance that, at the time of sale or use by the importer of the substance, is listed as a taxable substance. Corresponding with the IRS, including requests for determination and other guidance. Its been a while since manufacturers or other affected organizations had to consider this levy, so lets take a closer look at these excise taxes and how taxpayers can determine applicability and prepare for compliance.
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