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 4671—often referred to as “Superfund” excise taxes.
Superfund taxes were last effective in 1995 and were imposed on the sale or use of 50 identified chemicals as well as certain substances manufactured or produced from such chemicals. The Infrastructure Investment and Jobs Act (Pub. L. No. 117-58), enacted Nov. 15, 2021, reinstated the tax at new rates, and modified applicable chemicals, including lowering the taxable threshold for substances containing the covered chemicals.
The IRS’s guidance establishes an initial list of chemicals that will be subject to the Superfund tax, including 101 new chemicals and hazardous substances, as well as the 50 that were on the list when the tax was last effective.
The guidance also provides information regarding the Infrastructure Investment and Jobs Act’s amendment to Section 4672(a)(2)(B), lowering the required percentage of taxable chemicals used to produce the substance from 50% to 20% of the weight (or the value) of the materials used to produce the substance. This amendment could have major impacts to business exposure of Superfund taxes.
The Superfund taxes are effective July 1, 2022. Pertinent businesses should consider examining for any potential exposure to the updated and amended Superfund tax list.
Contact:
Tax professional standards statement
This content supports Grant Thornton LLP’s marketing of professional services and is not written tax advice directed at the particular facts and circumstances of any person. If you are interested in the topics presented herein, we encourage you to contact us or an independent tax professional to discuss their potential application to your particular situation. Nothing herein shall be construed as imposing a limitation on any person from disclosing the tax treatment or tax structure of any matter addressed herein. To the extent this content may be considered to contain written tax advice, any written advice contained in, forwarded with or attached to this content is not intended by Grant Thornton LLP to be used, and cannot be used, by any person for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.
The information contained herein is general in nature and is based on authorities that are subject to change. It is not, and should not be construed as, accounting, legal or tax advice provided by Grant Thornton LLP to the reader. This material may not be applicable to, or suitable for, the reader’s specific circumstances or needs and may require consideration of tax and nontax factors not described herein. Contact Grant Thornton LLP or other tax professionals prior to taking any action based upon this information. Changes in tax laws or other factors could affect, on a prospective or retroactive basis, the information contained herein; Grant Thornton LLP assumes no obligation to inform the reader of any such changes. All references to “Section,” “Sec.,” or “§” refer to the Internal Revenue Code of 1986, as amended.
More tax hot topics

No Results Found. Please search again using different keywords and/or filters.