Understanding the Superfund Chemical Excise Taxes: A Comprehensive FAQ Guide

IRS Reinstates Superfund Chemical Excise Tax: What You Need to Know

In a move to fund hazardous-substance cleanup programs, the IRS has reinstated the Superfund Chemical Excise Tax as part of the Infrastructure Investment and Jobs Act. This tax, set to expire in December 2031, is expected to collect over $14 billion in taxes.

The Superfund Chemical Excise Tax applies to manufacturers, producers, or importers who sell or use taxable chemicals or substances in the U.S. The tax rates vary depending on the chemical composition and usage, with rates doubling from previous levels.

Exporters are not subject to these taxes, and exemptions are available for certain chemicals used in fertilizer, animal feed, and fuel. Companies must report and pay these taxes semi-monthly, with penalties waived until the end of 2023.

To comply with these regulations, companies need to assess their manufacturing processes, collect transactional data, and establish systems for tax calculation and remittance. Automated solutions like ONESOURCE Determination can help companies accurately calculate and pay the Superfund Chemical Excise Tax on time.

With the reinstatement of the Superfund Chemical Excise Tax, companies must be prepared to navigate these new regulations to avoid penalties and ensure compliance with the law.