March 28, 2023

Volume XIII, Number 87


March 27, 2023

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IRS Issues FAQs on Superfund Excise Tax on Certain Chemical Substances

The Internal Revenue Service announced on June 24, 2022, that it has posted frequently asked questions (FAQ) on the Superfund chemical excise tax. The FAQs detail what the Superfund chemical excise tax is, how the tax is computed, and who may be liable for the tax. The Superfund chemical taxes will be reported on Form 720, Quarterly Federal Excise Tax Return, and Form 6627, Environmental Taxes. The excise taxes were reinstated beginning on July 1, 2022, under the Infrastructure Investment and Jobs Act. The IRS notes that there are two separate Superfund chemical excise taxes: a tax on the sale or use of “taxable chemicals” and a tax on the sale or use of imported “taxable substances.” Specifically, the reinstated taxes impose an excise tax on the sale or use of a taxable chemical by the manufacturer, producer, or importer of the taxable chemical. They also impose an excise tax on the sale or use of a taxable substance by the importer of the taxable substance. The IRS states that the FAQs provide general information. According to the IRS, at the time of publication of these FAQs, 151 substances are listed as taxable substances. The IRS states “[t]hat number will likely change as substances are added to or removed from the list of taxable substances.” The FAQs added June 24, 2022, include:

Q1.      What are the Superfund chemical excise taxes?

Q2.      When do the Superfund chemical excise taxes go into effect?

Q3.      What is a taxable chemical?

Q4.      What is a taxable substance?

Q5.      How are substances added to or removed from the list of taxable substances?

Q6.      How do I calculate the section 4661 tax?

Q7.      I am an importer of taxable substances. How do I calculate the section 4671 tax?

Q8.      What happens if an importer does not calculate the section 4671 tax?

Q9.      Will the IRS prescribe tax rates for taxable substances?

Q10.    Who is responsible for reporting and paying Superfund chemical excise taxes?

Q11.    How are the Superfund chemical excise taxes reported?

Q12.    When is the first return due?

Q13.    Are semimonthly deposits required?

Q14.    Under what circumstances is registration required?

Q15.    Is there a way to check the status of an application for Activity Letter G registration?

More information on the Superfund excise tax on certain chemical substances is available in our May 19, 2022, memorandum.

©2023 Bergeson & Campbell, P.C.National Law Review, Volume XII, Number 175

About this Author

Lynn Bergeson, Campbell PC, Toxic Substances Control Act Attorney, federal insecticide lawyer, industrial biotechnology legal counsel, Food Drug Administration law
Managing Partner

Lynn L. Bergeson has earned an international reputation for her deep and expansive understanding of the Toxic Substances Control Act (TSCA), the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), European Union Registration, Evaluation, Authorization and Restriction of Chemicals (REACH), and especially how these regulatory programs pertain to nanotechnology, industrial biotechnology, synthetic biology, and other emerging transformative technologies. Her knowledge of and involvement in the policy process allows her to develop client-focused strategies whether...

Carla Hutto, Bergeson Campbell PC environmental law regulatory analyst,Toxic Substances Control Act law attorney
Regulatory Analyst

Since 1996, Carla Hutton has monitored, researched, and written about regulatory and legislative issues that may potentially affect Bergeson & Campbell, P.C. (B&C®) clients. She is responsible for creating a number of monthly and quarterly regulatory updates for B&C's clients, as well as other documents, such as chemical-specific global assessments of regulatory developments and trends. She authors memoranda for B&C clients on regulatory and legislative developments, providing information that is focused, timely and applicable to client...