Status of Crude and Petroleum Excise Taxes The bill also requires the Treasury to update the list of taxable substances subject to Section 4671 by January 1, 2022. (See table below for the list of taxable chemicals under Section 4661.) Additionally, the bill doubles the penalty under Section 4671 from 5 percent ad valorem to 10 percent ad valorem for importers that do not report to the Internal Revenue Service (IRS) information that is sufficient to assess the taxability of a substance.Įxpands the Reach of Excise Tax: The bill also expands the reach of Section 4671 by decreasing the weight or value required for a chemical to be taxable from 50 percent to 20 percent. The bill also reinstates IRC Section 4671, which imposes a tax on certain chemicals sold or used by an importer at the rate set by Section 4661.ĭoubles Tax and Penalty Rates: The bill also doubles the tax rates listed under Section 4661. Reinstates Superfund Excise Tax on Sale and Import of Chemicals: The bill reinstates IRC Section 4661, which imposes a per-ton tax on the sale of the chemicals listed in the section by a manufacturer, producer, or importer of the chemicals. The changes are effective from Jto December 31, 2031.
The Act also doubles the tax rate on chemicals or chemical products and expands the reach of the tax. The Infrastructure Investment and Jobs Act, which President Biden signed into law on November 15, 2021, reinstates Superfund excise taxes on the sale and import of certain chemicals as part of the law’s revenue raising provisions.
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