Superfund Chemical Excise Tax: Revived after Quarter Century
The Infrastructure Investment and Jobs Act signed by President Biden on November 15, 2021 reinstated the so-called Superfund Chemical Excise Tax (“SCET”) on Taxable Chemicals and Taxable Substances. The SCET is in effect for the period July 1, 2022 through December 31, 2031.
Taxable Chemicals
- The SCET is imposed on any manufacturer, producer, or importer of Taxable Chemicals in the United States at rates ranging from $0.48 to $9.74 per ton.
- The list of Taxable Chemicals and corresponding SCET rates can be found under IRC Section 4661(b). There are 42 chemicals on this list.
Taxable Substances
- The SCET is imposed on any importer selling or using Taxable Substances in the United States.
- The list of Taxable Substances includes the original list of 50 chemicals found under IRC Section 4672(a)(3) and an additional 101 chemicals published by the IRS. The IRS has authority to update the list of Taxable Substances in the future.
Taxpayers must make semi-monthly deposits of the SCET with the IRS and report SCET to the IRS on a quarterly basis using Form 6627, Environmental Taxes, which is attached to Form 720, Quarterly Federal Excise Tax Return.
Taxpayers may be able to claim a refund or credit for SCETs paid within their supply chain. In addition, taxpayers may be able to claim a refund or exemption of SCETs in cases where Taxable Chemicals or Taxable Substances are exported. Other SCET exemptions exist for taxpayers using Taxable Chemicals or Taxable Substances for certain purposes (e.g., qualified fertilizer, qualified animal feed, etc.).
Thank you to Mike Smith, who contributed to this post.
Allyson works for businesses of all sizes, maintaining a primary focus on business tax and consulting. She provides her clients with creative resolutions for technical tax issues and clearly interprets proposed and existing business tax law. Moreover, her thorough experience with trusts and estates allows her to deftly guide clients through the complicated legislation and the intricate processes involved in compliance, maximization of returns, and sustaining business and family wealth. She first gained knowledge and experience working for several years in a national firm, in a small firm environment, and in solo practice. She was also a partner in a regional legacy firm for 15 years prior to joining CLA. Her extensive tax experience bolsters CLA's talented staff and cultivates client relationships and makes her an invaluable member of the professional and civic communities.
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