President Joe Biden called for reinstating the Superfund taxes as part of his $2 trillion infrastructure proposal . White House Reviewing Proposed Regulations on Reinstated Superfund You Dont Need a Machine to Predict What the FTC Might Do About Is It Compensable? Section 704.3. An official website of the United States Government. The National Law Review - National Law Forum LLC 3 Grant Square #141 Hinsdale, IL 60521 Telephone (708) 357-3317 ortollfree(877)357-3317. Do Issuers Fail To File Form Ds Because They Fear Trolls? | All Locations, Cherry Bekaert is the brand name under which Cherry Bekaert LLP and Cherry Bekaert Advisory LLC, independently owned entities, provide professional services in an alternative practice structure in accordance with applicable professional standards. This would make the first tax deposit covering thefirst half of July 2022due byJuly 29, 2022. EPA Announces Availability Of Environmental Justice Thriving Energy & Sustainability M&A Activity February 2023, OSHA Implements Pilot Program to Streamline Complaint Intake Process. How does a company report the Superfund Chemical Excise Tax? and accounting software suite that offers real-time 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. Prior to 1996, the rates of tax on those chemicals ranged from $0.22 per ton to $4.87 per ton. Form 6627 must be led alongside Form 720 on a quarterly basis. Yes. 3684 (Aug. 2, 2021). Customer Reviews: Five-Star Enforcement and the Expanding Regulations. Reminder: High-Earning Exempt Professionals Must Be Paid a "True Gold Dome Report Legislative Day 24 (2023). 4661. What is a taxable chemical? The Reinstated Superfund Excise Taxes. July 1, 2022. As explained in today's IRS release: See Section 4671(b)(2). Tax Senior Manager Cherry Bekaert Advisory LLC and its subsidiary entities are not licensed CPA firms. Section 80201 of the bill would revive long-expired Superfund excise taxes at twice their previous level. The Superfund excise taxes are part of Subtitle D, Chapter 38 of the Tax Code. L. No. See 40.0-1(c) and 40.6302(c)-1 of the Excise Tax Procedural Regulations. Additionally, prior versions of these FAQs will be maintained on IRS.gov to ensure that taxpayers, who may have relied on a prior version, can locate that version if they later need to do so. media, Press Accordingly, these FAQs may not address any particular taxpayer's specific facts and circumstances, and they may be updated or modified upon further review. This message will not be visible when page is activated. Deloitte Tax Some companies did not yet exist when the previous excise tax applied and have no experience with the old tax and thus no internal processes for determining their liability for the Superfund excise tax. The excise tax collection expired in 1995 but resumed on July 1, 2022. Many in the industrial chemical community are unfamiliar with the Superfund excise tax legacy, and the IRS is seemingly unprepared for the learning curve challenge the reactivation of the tax has created. The New York City Council Sets its Sights on Non-Profit Housing DOJ Announces New Voluntary Self-Disclosure Policy for U.S. Attorney Supreme Court: Salary, Not Daily Pay, Required for FLSA Overtime Time Is Money: A Quick Wage-Hour Tip on the Tip Credit, EDPB issues its Opinion on the EU-U.S. Data Privacy Framework, Hunton Andrews Kurths Privacy and Cybersecurity. DTTL and each of its member firms are legally separate and independent entities. Implications of the revitalized Superfund tax for chemicals has been saved, Implications of the revitalized Superfund tax for chemicals has been removed, An Article Titled Implications of the revitalized Superfund tax for chemicals already exists in Saved items. Your online resource to get answers to your product and In response to pointed public comment, on April 15, 2022, the IRS released an advance version ofNotice 2022-15, providing relief for thethirdandfourth calendar quarters of 2022, and the first calendar quarter of2023, regarding the failure to deposit penalties imposed bySection 6656of the Tax Code, as those penalties relate to the Superfund excise taxes. That number will likely change as substances are added to or removed from the list of taxable substances pursuant to section 4672(a)(2) or (4). The $1.2 trillion infrastructure bill making its way through the Senate contains a $14.55 billion tax hike on American chemical and mineral producers. The choice of a lawyer or other professional is an important decision and should not be based solely upon advertisements. 429. 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. L. 99-499, approved Oct. 17, 1986. Self-assess the rate based on 10% of the appraisal value of the imported substances.*. Additionally, Form 6627, Environmental Taxes, was previously used to report the Superfund Excise Taxes when the taxes were last in effect, and this form will be used again to report the taxes owed. In Notice 2021-66 (released December 14, 2021), the IRS provided guidance on Superfund excise taxes, which are reinstated as of July 1, 2022, under the Infrastructure Investment and Jobs Act (IIJA) (see Tax Alert 2021-2059).. Notice 2021-66 does the following: Updates the list of taxable substances under IRC Section 4672(a), which had expired on December 31, 1995 This assessment should include a review of the transaction life cycle, master data setup, cost computation and recognition, and general entry posting. discount pricing. Chemical manufacturers and importers The specified. automatically and accurately calculating the amount of excise tax owed. There are several potential issues related to taxpayer liabilities, refund considerations, and other recordkeeping requirements to consider with regards to the Superfund Excise Taxes. The Infrastructure Investment and Jobs Act, which President Biden signed into law on November 15, 2021, reinstates Superfund excise taxes on the sale and import of certain chemicals as part of the law's revenue raising provisions. Tax Senior Manager The money gathered from the taxes was used to fund the clean-up of hazardous waste disposal sites across the United States. Companies are likely to be caught off guard by this reinstated tax. Tampa | 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. It's codified in IRC Sections 4671 and 4672, both of which were added by the Superfund Amendments and Reauthorization Act of 1986. The rate of excise tax per ton is based on the amount of each chemical included in the substance. How Modern Manufacturing Plants Can Protect Against Ransomware, FTC Will Host May 23, 2023, Workshop on Recyclable Claims and the Appellate Court Affirmed An Order Denying A Beneficiarys Request For An Overview of Why Class Action Privacy Lawsuits May Have Just Gotten Gold Dome Report Legislative Day 26 (2023). South Florida | Are there any available exemptions for the Superfund Chemical Excise Taxes? Systems and processes will also need to be established in order to properly calculate and remit taxes that are due, as well as apply for refunds or exemptions. Key considerations for dealings with the reinstated Superfund Tax include: For producers, importers, exporters, and customers of businesses making and distributing identified chemicals and substances, action is needed quickly. Tax Managing Director Licenses for Exports to Are You Ready for the UPC? The rates will be included in the instructions to Form 6627, Environmental Taxes, and under Recent Developments for Form 6627, Environmental Taxes. They were reinstated by section 80201(c)(3) of the Infrastructure Investment and Jobs Act (Public Law 117-58, 135 Stat. Corporate Assisting with filing refund claims and reporting requirements around exemption certificates. A12. Procedures to request an IRS determination to add or remove a substance from the list of taxable substances under Internal Revenue Code Section 4672(a) are in Revenue Procedure 2022-26PDF. accounting firms, For Tax is due upon the first use or first sale of a listed chemical in the United States. IRC section 4672 additionally directed importers and exporters to request a determination from the IRS as to whether a specific unlisted chemical substance should be included in the list of taxable substances. In fact, companies that export products comprised of taxable chemicals or substances are entitled to a refund if they paid prior to manufacturing. on a wide range of chemicals and substances. Proposed Nursing Home Disclosure Requirements Target Private Equity Regulation in the Post-FTX Environment: SECs Proposed Enhanced Can a Child Decide Whom They Want to Live With in Michigan? Desperate Times, Desperate Measuring Cups FTC Brings Enforcement Trending in Telehealth: February 20 26, 2023, IRS Sets Deadline For Using 401(K) Plan Forfeitures, How Generative AI Generates Legal Issues in the Games Industry, DOJ Announces New Nationwide Voluntary Self-Disclosure 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. On November 15, 2021, President Biden signed into law theInfrastructure Investment and Jobs Act (IIJA), Public Law 117-58, 135 Stat. The first quarterly Superfund Tax reporting on Form 720 is due October 31, 2022. Excise taxes are reported on a quarterly basis on IRS Form 720, Quarterly Federal Excise Tax. The Superfund chemical excise taxes are reported on Form 6627, Environmental Taxes, which is attached to Form 720, Quarterly Federal Excise Tax Return. . The tax would apply after December 31, 2021, until January 1, 2032. If you would ike to contact us via email please click here. (b) Amount of Tax The amount of tax imposed by subsection (a) shall be determined in accordance with the following table: (c) Termination No tax shall be imposed by this section after December 31, 2031. Notice 2021-66. The National Law Review is a free to use, no-log in database of legal and business articles. accounts, Payment, The Infrastructure Investment and Jobs Act lowered this threshold to 20%. What is the purpose of the Superfund Chemical Excise Taxes? However, importers with estimated tax totals of more than $2,500 per year are required to start making bi-weekly deposits to the Superfund Tax as early as July 29, 2022. Taxpayers should be proactive and carefully analyze and consider the potential tax liabilities, tax reporting requirements, and systems impacts as a result. Please see www.deloitte.com/about to learn more about our global network of member firms. . 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. More for Chicago | The notice also addresses registration requirements to exempt certain sales and uses of taxable chemicals from tax. 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 . Even companies that have been on the market for decades may not have many employees who were around when the previous excise tax applied. Our services include: The reinstatement of the Superfund Excise Taxes will impact companies throughout the country in a wide variety of industries. Biobased chemicals and biofuels have taken root thanks to both popular appeal and political support. See section 4671(b)(1). The latest reiteration of the excise tax will be comprised of two separate taxes on (1) chemical sales and (2) chemical importers. ONESOURCE Determination gives companies the ability to quickly comply with Superfund Excise and Hazardous Substance taxes by automatically and accurately calculating the amount of excise tax owed. DeloitteTax Yes. After more than 25 years, two excise taxes on chemicals and imported hazardous substances were reinstated in the Infrastructure Investment and Jobs Act (Pub. When the Superfund tax was last applied back in 1995, a taxable substance was required to have 50% of a chemical. This Week in 340B: February 21 27, 2023. WASHINGTON The Internal Revenue Service announced today that it has prescribed tax rates for 121 taxable substances that are subject to the Superfund chemical excise tax imposed by section 4671(a) of the Internal Revenue Code (Code). Likely to be caught off guard by this Reinstated tax also addresses registration requirements Exempt... 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