Atlanta | The Superfund tax is assessed on the manufacturer or importer of these chemicals. Financial Institutions Require More Oversight of Cybersecurity Risk Bill Would Allow Shareholders To Phone It In. Permit & License. For taxable substances, the importer of the taxable substance is responsible for reporting and paying the section 4671 tax to the IRS. Find out what KPMG can do for your business. (added June 24, 2022), Q7. Forty-two chemicals and 151 hazardous substances are taxable; however, each is taxed differently. 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. | 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. That authority Inferences, however, can be made from the absence of any mention in the law. Proc. Charlotte | This effectively doubled the tax rate of the imported taxable substances as well, and the Infrastructure Bill further Tune in to find out more. An alternative liability is a 10% tariff of the import value. If you are not responsible for paying and reporting the excise tax to the IRS but purchase any of the listed chemicals or substances from your suppliers, review the potential economic impact of the reinstated excise tax on your company. Section 4671(a) imposes an excise tax on the sale or use of a taxable substance by the importer of the taxable substance. Sign up to receive the latest BDO news and insights. After a more than 26 year hiatus, on July 1, 2022, the Superfund chemical excise tax (the Superfund Chemical Tax) will again become effective. What is a taxable chemical? With over 10 years of experience, Sales Tax Manager Elizabeth Perez Gonzalez specializes in sales and use tax services. Follow these steps to assess applicability and prepare for compliance: The sooner these steps are completed, the more seamless this new reporting and filing will be. The IRS determined this threshold in consultation with the Environmental Protection Agency and U.S. Customs and Border Protection. 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. For taxable chemicals, the manufacturer, producer, or importer of the taxable chemical is responsible for reporting and paying the section 4661 tax to the IRS. (added June 24, 2022), Treasury Inspector General for Tax Administration, IRS issues Superfund Chemical Excise Taxes FAQs. 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. Manufacturers, producers, or importers that sell or use any of these chemicals must pay a tax of $0.22 to $4.87 per ton, depending on the chemical. The Superfund chemical taxes should be reported on Form 720, Quarterly Federal Excise Tax Return, and Form 6627, Environmental Taxes. A Frequently Asked Questions (FAQ) page about the Superfund Excise Tax is available from the Internal Revenue Service: FAQ: IRS Issues Superfund Chemical Excise Taxes. The taxes are reported quarterly on the IRS Form 720, which is part of the Quarterly Federal Excise Tax Return. 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. As we mentioned above, this tax is only for companies importing chemicals or hazardous substances on the list and filing an IRS Form 720. Specifically, taxable substances include the 50 substances on the initial list of taxable substances in Section 4672(a)(3) and 101 taxable substances added by the IRS in December 2021, throughIRS Notice 2021-66. Yes. Some or all of the services described herein may not be permissible for KPMG audit clients and their affiliates or related entities. The Infrastructure Investment and Jobs Act signed into law November 15, 2021, reinstated the Superfund Excise Taxes (Superfund Tax) on chemicals and substances. Managing Director, Excise Tax Practice National Leader, State and Local Tax Partner, Sales & Use Tax National Leader, Business Restructuring & Turnaround Services, Management Advisory & Performance Improvement, Total Tax Transparency & ESG Tax Strategy, Financial Institutions & Specialty Finance. Are you capturing all of them? Gas tax holiday: impact of changes in motor fuel tax rates, Tax automation: the ultimate guide to tax process efficiency, Reporting See section 4671(b)(1). 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. Cherry Bekaert Advisory LLC and its subsidiary entities are not licensed CPA firms. Download list of 42 taxable chemicals and 151 taxable substances. Kti Chemicals Inc is a superfund site located at 1170 Sonora Ct, Sunnyvale, CA 94086. Currently, there are 42 taxable chemicals, each with a specified tax rate imposed on a per-ton basis, and 151 taxable substances for which the tax rate is dependent on the substances unique chemical composition. Duration: 00:12:55. This current iteration is set to expire on December 31, 2031. While the final taxable substance list and exact rates have yet to be finalized, costs will be calculated by weight or value of the contained taxable chemical. 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 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. | Privacy Policy The Inflation Reduction Act (IRA) enacted on August 16, 2022, created a new corporate alternative minimum tax (AMT) for taxable years beginning after December 31, 2022. Taxable Substances are items that use taxable chemicals to create a final product. These FAQs are being issued to provide general information to taxpayers and tax professionals as expeditiously as possible. Our use of the terms our Firm and we and us and terms of similar import, denote the alternative practice structure of Cherry Bekaert LLP and Cherry Bekaert Advisory LLC. Another Lesson for Higher Education Institutions about the Importance Justice Department Secures Resolution in Sexual Harassment Lawsuit United States Department of Justice (DOJ). Originally, Superfund cleanups were funded through corporate and excise taxes, commonly referred to as Superfund taxes, focused on the petroleum and chemical industries. Is there a way to check the status of an application for Activity Letter G registration? Any later updates or modifications to these FAQs will be dated to enable taxpayers to confirm the date on which any changes to the FAQs were made. The Inflation Reduction Act (Pub.L. 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. Sightline is a tax platform that makes the entire tax process more collaborative and insightful. 117-169), which was signed into law on August 16, 2022, reinstated the Petroleum Superfund Tax at a rate of 16.4 cents per barrel. However, the first deposit of Superfund Tax is due as early as July 29, 2022. 2022-19: Relief for S Corporation Owners, Financial Secrecy Under Attack in the United States: Final Regulations Issued for Beneficial Ownership Information Reporting, Cybersecurity Maturity Model Certification, Business Intelligence and Data Analytics Services, Digital Strategy & Transformation Services, Government Contractor Consulting Services, SBA 8(a) Business Development Program Consulting Services, Information Technology Audit & Consulting, Cybersecurity Maturity Model Certification (CMMC), Outsourced Sales Tax Compliance and Managed Services, IRS issues Superfund Chemical Excise Tax Rates, IRS issues Superfund Chemical Excise Taxes FAQs, reinstated the Superfund Excise Taxes (Superfund Tax) on chemicals and substances. Section 4661(b) lists the almost three and a half dozen chemicals that this Permit & License. As is the case with many excise taxes, the cost to businesses is expected to be passed down the supply chain, and ultimately to the end consumer in the form of increased prices and fees. | Careers Because of potential exemptions for butane and methane used as a fuel, taxpayers further down the supply chain need to be aware of the procedural issues aecting such chemicals. For tax advice, consult your tax adviser. Funds collected will be added to the Hazardous Substance Superfund Trust. During her free time Elizabeth enjoys going to concerts, traveling, hanging out with her pets, and caring for her succulent plants. (added June 24, 2022), Q13. By continuing to use this site, you are giving consent to cookies being used. Explore available tools within IT systems/databases to collect data needed to comply with reporting requirements. For example, the tax arising from the period July 1 - July 15, 2022 must be deposited by July 29, 2022. When do the Superfund chemical excise taxes go into effect? 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. Houston | See section 4672(a)(1). The Joint Taxpayers must make semimonthly deposits of the Superfund chemical excise taxes. The applicable tax ranges from $.48 to $9.47 per ton. Manufacturers, producers, or importers that sell or use any of these chemicals must pay a tax of $0.22 to $4.87 per ton, depending on the chemical. It has been almost 30 years since the Superfund excise tax was in effect. IRC section 4661(b) lists 42 chemicals that are once again subject to the Superfund Excise Tax effective July 1, 2022. 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. Cherry Bekaert is the brand name under which Cherry Bekaert LLP and Cherry Bekaert Advisory LLC provide professional services. Additional substances may be added if the weight or value of the substances is greater than 20% of the contained taxable chemical. According to the IRS, 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. I am an importer of taxable substances. Charter is different from tax teams because we dont just focus on compliance we also find the credits your company qualifies to receive. Learn how tax plays a key role in your business while the stakes continue to be high in regards to managing potential changes to US and global tax policy. Various exemptions exist for taxable chemicals. (added June 24, 2022), Q5. Aerojet and its subsidiaries have This would be for the periodJuly 1-September 30, 2022. 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. Once again subject to the hazardous substance Superfund Trust issued to provide General information to and... Substances may be added if the weight or value of the Quarterly Federal Excise tax Return of! A ) ( 1 ) the entire tax process More collaborative and insightful reporting and the. 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