Observation: Under Notice 2022-15, deposits still are required and must be timely to avoid Section 6656 penalties, but failing to meet the 95% accuracy threshold will not result in penalties. 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. State Green and Sustainability Claims: A Roundtable Discussion. Reinstating the tax on chemicals will unduly burden consumers. Specifically, the due date for the deposit accelerates to the immediately preceding date that is not a Saturday, Sunday, or legal holiday. July 1, 2022. Tax Implications and Financial Business Guidance Regarding the Coronavirus. Taxable substances are defined inSection 4672as any substance that, at the time of sale or use by the importer, is listed as a taxable substance. Information must be available to properly calculate and remit taxes due, apply for refunds, or request exemptions. See questions 4-5 for more information on taxable substances and questions 7-9 for more information on calculating the tax imposed by section 4671 (section 4671 tax). $300 plus $0.085 per each acre-foot greater than 10 acre-feet. The Superfund law (P.L. 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. The Inflation Reduction Act (Pub.L. Is there a way to check the status of an application for Activity Letter G registration? In order to pay for the provisions in The Infrastructure Investment and Jobs Act (also referred to as the Bipartisan Infrastructure Bill), Superfund was reinstated with double the tax rate on chemicals and a The Superfund chemical taxes will be reported on Form 720, Quarterly Federal Excise Tax Return, and Form 6627, Environmental Taxes. The IIJA also reinstated the Superfund excise tax on the import for sale or use of any taxable substance underSection 4671of the Tax Code. A Frequently Asked Questions (FAQ) page about the Superfund Excise Tax is available from the Internal Revenue Service: FAQ: IRS Issues Superfund Chemical Excise DOE Publishes Notice of Intent to Fund Clean Hydrogen Projects. Due to the complicated nature of the tax assessments, and the detailed information required, gaps in existing systems and processes may exist. 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. What happens if an importer does not calculate the section 4671 tax? Beginning Your Sustainability Journey? - January 2023 Edition. This initiative came to be commonly known as the Superfund Excise Tax on Chemicals. The tax law is included in the Infrastructure Investment and Jobs Act that was signed into law on November 15, 2021. Some states have laws and ethical rules regarding solicitation and advertisement practices by attorneys and/or other professionals. The Superfund chemical excise taxes are reported on Form 6627, Environmental Taxes, which is attached to Form 720, Quarterly Federal Excise Tax Return. 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. Washington DC |, Copyright 2023 Cherry Bekaert. For exporters, IRC 4662(e) provides for a refund of the Superfund Tax for both taxable chemicals and taxable substances that are exported. Section 4661(b) lists the almost three and a half dozen chemicals that this 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. 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. COPYRIGHT 2023 RKL. This approach includes: Let us help you address the compliance issues associated with reinstatement of Superfund chemical excise taxes. The Superfund Tax that was established over two decades ago and taxed specific chemicals and hazardous substances has been restored after the passing of the Infrastructure Investment and Jobs Act last year. A15. Taxpayers do need to make semi-monthly deposits of the Superfund Tax, however, there is some relief available for missing payments through March 2023. Let's talk about the history of the superfund tax and how it will affect companies in the motor fuel industry today. The Joint In addition, exporters of chemicals and substances which were subject to the Superfund Tax can request a refund of the tax previously paid. See also section 4661(b) for the tax rate for taxable chemicals. Texas Unclaimed Property, a Division of the Texas Comptroller of Public Accounts (Texas Comptroller), is increasing compliance efforts through outreach. 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. Companies may also rely on the absence of a clear inclusion of articles in the statute and the exclusion of articles under the previous application of the Superfund excise tax. If you are a manufacturer or importer, it is essential that your organization be prepared to report and remit the excise tax. 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). As a result, large and small companies alike who produce or import these chemicals or substances are about to be slammed with additional costs. The first quarterly Superfund Tax reporting on Form 720 is due October 31, 2022. The National Law Review is a free to use, no-log in database of legal and business articles. Accordingly, these FAQs may not address any particular taxpayer's specific facts and circumstances, and they may be updated or modified upon further review. Tax is due upon the first use or first sale of a listed chemical in the United States. The Infrastructure Investment and Jobs Act (IIJA) reinstated the excise taxes imposed on certain chemicals and imported chemical substances under Internal Revenue Code sections 4661 through 4672 beginning July 1, 2022. The Superfund chemical taxes will be reported on Form 720, Quarterly Federal Excise Tax Return, and Form 6627, Environmental Taxes. Proc. Initially, the Superfund program called for taxes by manufacturers of crude oil and certain chemicals to fund a trust to pay for environmental cleanup activities. Are semimonthly deposits required? 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%. (added June 24, 2022), Q2. You Meta Believe the GDPR Penalties Are No Joke! 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. 11 In addition to the reinstatement of the taxes, the Infrastructure Bill doubled the prior rate of tax on the 42 listed chemicals. Substances. 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. 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. With over 10 years of experience, Sales Tax Manager Elizabeth Perez Gonzalez specializes in sales and use tax services. The section 4661 tax is imposed as a rate per ton of a taxable chemical. 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. If you require legal or professional advice, kindly contact an attorney or other suitable professional advisor. 2022-26 (Issued 6/28/2022), Exclusive Procedures to Request a Determination under IRC 4672 (a) (2) That a Substance Be Added To/Removed From the List of Taxable Substances under IRC 4672 (a) ( Link) Please Since the Superfund excise tax expired almost three decades ago, the industrial chemical communitys familiarity with their application is attenuated at best. Fast forward to today. Class Action Year in Review: The Rise Of The Self-Tapping Website? For example, the tax arising from the period July 1 - July 15, 2022 must be deposited by July 29, 2022. How to How to Turn Your Tweets Into LinkedIn and Instagram Social What is Document Processing? 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. It is unclear whether and how the statute means to differentiate a substance from an article, and if so, whether the IRS would apply the definition of article under the Toxic Substances Control Act (TSCA). 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. It started with the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) of 19801986. Connecting with our core purpose through a renewed lens. She specializes in pass-through entity and multi-state compliance for family owned businesses in a variety of industries including manufacturing and distribution, retail and real estate. The IRS has provided taxpayers temporary relief from penalties for failure to deposit superfund chemical taxes in the third and fourth calendar quarters of 2022 and the first quarter of 2023 through Notice 2022-15. Superfund Excise Tax - What You Need to Know, This analysis is intended for informational purposes only and is not tax advice. The Superfund Chemical Excise Tax was created in 1980 through the Comprehensive Environment Response, Compensation, and Liability Act. The Infrastructure Investment and Jobs Act signed into law November 15, 2021, reinstated the Superfund Excise Taxes (Superfund Tax) on chemicals and substances. In addition, our guarantee ensures that we will even defend such claims under audit. Cherry Bekaert Advisory LLC and its subsidiary entities are not licensed CPA firms. Ascend Performance Materials is the premium provider of high quality chemicals, fibers and plastics. Navigating the complex terrain of excise taxation and uncovering opportunities, Stay informed on excise tax-related news with ourKPMG TaxNewsFlasharchive. Identification of the chemical manufacturers and importers subject to the Superfund Tax. It is not clear that that the IRS can offer any more relief to taxpayers than has already been given in Notice 2022-15. It states that it was Congress intent that taxable substances only include chemicals that are intended for further chemical conversion. 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, benzene and mercury. Taxable substances include substances where taxable chemicals constitute more than 20 percent of the weight (or more than 20 percent of the value) of the materials used to produce such substance (as determined based on the predominant method of production). Notice 2021-66 suspended the existing procedure inNotice 89-61for an importer or exporter to petition the IRS to add or remove substances from the list, pending the issuance of additional guidance. 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. (added June 24, 2022), Q9. She has worked extensively with clients in the medical, medical technology, manufacturing, retail, and food service industries. Aerojet and its subsidiaries have Petitions Filed To Add Polyoxymethylene And Polyphenylene Sulfide To List Of Chemical Substances Subject To Superfund Excise Tax: On December 28, 2022, the The Superfund chemical excise taxes previously expired on December 31, 1995. 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. 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). 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. Applicants for registration may call 859-320-4091 and select menu option #1. In Notice 2021-66 the IRS published a list of 100 additional substances subject to the Superfund Tax. 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. A14. The initial list of 50 taxable substances is found in IRC 4672(a)(3). FS-2022-31, June 2022. Taxable Substances are items that use taxable chemicals to create a final product. Download list of 42 taxable chemicals and 151 taxable substances. 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. The information contained herein is of a general nature and based on authorities that are subject to change. A diversity, equity and inclusion video series. All rights reserved. This effectively doubled the tax rate of the imported taxable substances as well, and the Infrastructure Bill further Additionally the new legislation also decreased the threshold amount from 50% to 20% of Providence | Elizabeth received her Bachelor of Science degree in Criminal Justice from Florida Gold Coast University. The Superfund chemical taxes will be reported on Form 720, Quarterly Federal Excise Tax Return, and Form The Infrastructure Investment and Jobs Act included the reauthorization of the Superfund law (P.L. According to the IRS, the tax rates for chemicals and substances depend on several factors. Notice 2022-15 provides temporary relief from the failure-to-deposit tax penalty. 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. Taxpayers must meet the guidelines in the Notice to qualify for this relief. Each chemical has a specified rate of tax, imposed on a per-ton basis, which has now been doubled. This is the first person/company at which the taxable chemical lands in the U.S. for the preceding reasons. This will result in six deposits being made per quarter (special rules apply in September). The microbusiness also charges $5 for delivery. 429 (2021)), effective July 1, 2022, with modifications to the applicable rates of tax and other provisions related to those taxes. A substance may be removed from the list of taxable substances if the Secretary determines that taxable chemicals constitute 20 percent or less of the weight and 20 percent or less of the value of the materials used to produce the substance (determined on the basis of the predominant method of production). Specifically, sections 4661(a) and 4662(c)(1) impose an excise tax on the sale or use of a taxable chemical by the manufacturer, producer, or importer of the taxable chemical. The content and links on www.NatLawReview.comare intended for general information purposes only. Pennsylvania Sales and Use Tax for Construction Contractors and Their Customers. The Inflation Reduction Act (Pub.L. Learn how a global manufacturer increased profits by $12M in four months. 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 The Joint Committee on Taxation estimates these excise taxes combined would increase revenues by over $52 billion over a 10-year period. 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. 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. At that time, the application of the tax and the deployment of funds were quite well understood, and the U.S. Internal Revenue Service (IRS) developed a relatively robust series of guidance documents to explain how the tax operated and who was subject to the tax. . There is some ambiguity in the calculation of the tax on substances, but IRS Notice 2021-66 suggests that the default tax calculation will be 10 percent of the assessed import value. Any taxable chemical or substance also qualifies for a Superfund Tax Credit. Sign up to receive the latest BDO news and insights. 429, Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA). Permit & License. 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. The section 4661 tax is imposed as a rate per ton of a taxable chemical. During her free time Elizabeth enjoys going to concerts, traveling, hanging out with her pets, and caring for her succulent plants. A2. Mississippi Gaming Commission Agenda: January 19 Meeting. - 2023 PwC. No such update has been issued to date, however. 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. There are 42 chemicals listed in section 4661(b). The Superfund Chemical Excise Tax was created in 1980 through the Comprehensive Environment Response, Compensation, and Liability Act. All rights reserved. Kti Chemicals Inc is a superfund site located at 1170 Sonora Ct, Sunnyvale, CA 94086. 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. Page Last Reviewed or Updated: 24-Jun-2022, Request for Taxpayer Identification Number (TIN) and Certification, Employers engaged in a trade or business who pay compensation, Electronic Federal Tax Payment System (EFTPS), Fact Sheets for Frequently Asked Questions, Q1. This excise tax, which is imposed on certain chemicals and imported chemical substances, was reinstated effective July 1, 2022, as part of the Infrastructure Investment and Jobs Act of November 2021. The reinstated excise tax on chemicals and substances containing chemicals funds a portion of the Superfund Trust Fund. NLR does not answer legal questions nor will we refer you to an attorney or other professional if you request such information from us. 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. Houston | The money gathered from the taxes was used to fund the clean-up of hazardous waste disposal sites across the United States. In order to pay for FS-2022-31, June 2022. Sightline is a tax platform that makes the entire tax process more collaborative and insightful. It has been almost 30 years since the Superfund excise tax was in effect. Persons wanting to engage in tax-free sales of intermediate hydrocarbon streams containing organic taxable chemicals and/or conduct tax-free inventory exchanges must be registered by the IRS under Activity Letter G. Persons can apply for registration by filing a Form 637, Application for Registration (For Certain Excise Tax Activities), with the IRS.

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