Reinstatement of the Chemical Production Superfund Excise Tax

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The tax was originally enacted in 1980 and imposed until 1995.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

$9.74

Benzene

9.74

Butane

9.74

Butylene

9.74

Butadiene

9.74

Ethylene

9.74

Methane

6.88

Naphthalene

9.74

Propylene

9.74

Toluene

9.74

Xylene

9.74

Ammonia

5.28

Antimony

8.90

Antimony trioxide

7.50

Arsenic

8.90

Arsenic trioxide

6.82

Barium sulfide

4.60

Bromine

8.90

Cadmium

8.90

Chlorine

5.40

Chromium

8.90

Chromite

3.04

Potassium dichromate

3.38

Sodium dichromate

3.74

Cobalt

8.90

Cupric sulfate

3.74

Cupric oxide

7.18

Cuprous oxide

7.94

Hydrochloric acid

0.58

Hydrogen fluoride

8.46

Lead oxide

8.28

Mercury

8.90

Nickel

8.90

Phosphorus

8.90

Stannous chloride

5.70

Stannic chloride

4.24

Zinc chloride

4.44

Zinc sulfate

3.80

Potassium hydroxide

0.44

Sodium hydroxide

0.56

Sulfuric acid

0.52

Nitric acid

0.48

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
Principal
Ryan
630.515.0477
mark.nachbar@ryan.com

Nathan Hutchings
Manager
Ryan
913.338.2005
nathan.hutchings@ryan.com

The material presented in this communication is intended to provide general information only and should solely be seen as broad guidance and not directed to the particular facts or circumstances of any individual who may read this publication. No liability is accepted for acts or omissions taken in reliance upon the content of this piece. Before taking (or not taking) any action, readers should seek professional advice specific to their situation from Ryan, LLC or other tax professionals. For additional information about this topic, please contact us at info@ryan.com.