Government Regulation
July 18, 2022
More On Carpenter/Recticel
CMA opens phase 2 investigation
Occasional information, Brussels, 18/07/2022 — 09:58 CET, 18.07.2022
As of this morning, the UK Competition and Markets Authority (the “CMA”) has published its decision that the remedy undertakings offered by Carpenter cannot be accepted by the CMA under the Enterprise Act 2002 and that it will refer the case to Phase 2 (the CMA’s publication can be found here.
This means that the CMA will investigate in more detail what impact the intended transaction will have on competition, and what remedy undertakings could be committed to by the parties in order to allow for clearance of the transaction.
Recticel is currently analyzing the impact of the CMA’s decision together with Carpenter and will provide an update about any further development in due time.
https://www.recticel.com/cma-opens-phase-2-investigation.html
June 27, 2022
IRS Issues Excise Tax Rates
IRS issues Superfund chemical excise tax rates
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IR-2022-132, June 24, 2022
WASHINGTON — The Internal Revenue Service announced today that it has prescribed tax rates for 121 taxable substances that are subject to the Superfund chemical excise tax imposed by section 4671(a) of the Internal Revenue Code (Code).
Taxable substances are those substances listed in either section 4672(a)(3) of the Code or Notice 2021-66. Substances may be added or removed from the list of taxable substances at a later date.
The rates will be included in the instructions to Form 6627, Environmental Taxes, and under Recent Developments for Form 6627, Environmental Taxes.
Taxable Substance | Tax Rate per Ton |
---|---|
1,3-butylene glycol | $ 7.28 |
1,4 butanediol | $ 4.68 |
1,5,9-cyclododecatriene | $ 9.74 |
2-ethyl hexanol | $ 7.16 |
2-ethylhexyl acrylate | $ 7.34 |
acetone | $ 20.06 |
acetylene black | $ 10.52 |
acrylic acid resins | $ 5.65 |
methacrylic acid resins | $ 14.94 |
acrylonitrile | $ 9.38 |
adipic acid | $ 6.13 |
adiponitrile | $ 8.57 |
allyl chloride | $ 10.38 |
alpha-methylstyrene | $ 9.93 |
ammonium nitrate | $ 1.49 |
aniline | $ 9.40 |
benzaldehyde | $ 8.47 |
benzoic acid | $ 7.31 |
bisphenol-A | $ 10.23 |
butanol | $ 6.31 |
butyl acrylate | $ 6.84 |
butyl benzyl phthalate | $ 12.15 |
carbon tetrachloride | $ 10.62 |
chlorinated polyethylene | $ 10.25 |
chloroform | $ 10.51 |
chromic acid | $ 4.37 |
cumene | $ 9.74 |
cyclododecanol | $ 9.05 |
cyclohexane | $ 10.02 |
decabromodiphenyl oxide | $ 17.99 |
di-2 ethyl hexyl phthalate | $ 7.37 |
diethanolamine | $ 6.01 |
diglycidyl ether of bisphenol-A | $ 13.86 |
diisopropanolamine | $ 12.76 |
dimethyl terephthalate | $ 5.91 |
dimethyl-2, 6-naphthalene dicarboxylate | $ 6.81 |
di-n-hexyl adipate | $ 8.23 |
diphenyl oxide | $ 13.73 |
diphenylamine | $ 10.28 |
epichlorohydrin | $ 12.89 |
ethyl acrylate | $ 4.09 |
ethyl alcohol for nonbeverage use | $ 5.94 |
ethyl chloride | $ 4.52 |
ethyl methyl ketone | $ 7.60 |
ethyl benzene | $ 9.74 |
ethylene dibromide | $ 9.03 |
ethylene dichloride | $ 6.62 |
ethylene glycol | $ 4.38 |
ethylene oxide | $ 6.23 |
ferrochrome ov 3 pct. carbon | $ 4.83 |
ferrochromium nov 3 pct | $ 4.83 |
hexabromocyclododecane | $ 9.11 |
hexamethylenediamine | $ 8.93 |
isobutyl acetate | $ 4.47 |
Isophthalic acid | $ 6.23 |
isopropyl acetate | $ 4.54 |
Isopropyl alcohol | $ 6.82 |
linear alpha olefins | $ 9.74 |
maleic anhydride | $ 5.75 |
melamine | $ 4.28 |
methyl acrylate | $ 5.39 |
methyl chloroform | $ 6.37 |
methyl isobutyl ketone | $ 23.65 |
methyl methacrylate | $ 14.75 |
methylene chloride | $ 10.33 |
monochlorobenzene | $ 10.12 |
monoethanolamine | $ 5.96 |
monoisopropanolamine | $ 11.74 |
nickel oxide | $ 7.03 |
normal butyl acetate | $ 4.47 |
normal propyl acetate | $ 3.73 |
nylon 6/6 | $ 8.67 |
ortho-dichlorobenzene | $ 10.35 |
ortho-nitrochlorobenzene | $ 7.49 |
para-dichlorobenzene | $ 10.35 |
para-nitrochlorobenzene | $ 7.49 |
para-nitrophenol | $ 8.59 |
pentaerythritol | $ 3.86 |
perchloroethylene | $ 10.89 |
phenol | $ 12.47 |
phenolic resins | $ 9.86 |
phosphorous pentasulfide | $ 2.49 |
phosphorous trichloride | $ 6.21 |
phthalic anhydride | $ 7.01 |
poly 1,4 butyleneterephthalate | $ 7.21 |
poly(propylene)glycol | $ 10.38 |
poly(propylene/ethylene)glycol | $ 8.84 |
poly(propyleneoxy)sucrose | $ 2.04 |
poly(propyleneoxy/ethyleneoxy)sucrose | $ 2.57 |
polyalphaolefins | $ 11.37 |
polybutadiene | $ 9.74 |
polybutene | $ 9.74 |
polybutylene | $ 9.74 |
polybutylene/ethylene | $ 9.74 |
polycarbonate | $ 10.84 |
polyethylene resins, total | $ 9.74 |
polyethylene terephthalate pellets | $ 6.82 |
polypropylene | $ 9.74 |
polypropylene resins | $ 9.74 |
polystyrene homopolymer resins | $ 9.93 |
polyvinylchloride resins | $ 7.46 |
propanol | $ 5.47 |
propylene glycol | $ 10.38 |
propylene oxide | $ 13.60 |
styrene | $ 9.93 |
styrene-butadiene, latex | $ 9.84 |
synthetic linear fatty alcohol ethoxylates | $ 7.12 |
synthetic linear fatty alcohols | $ 9.29 |
terephthalic acid | $ 6.23 |
tetrabromobisphenol-A | $ 14.79 |
tetrachlorophthalic anhydride | $ 8.95 |
tetrahydrofuran | $ 5.78 |
toluene diisocyanate | $ 10.85 |
toluenediamine | $ 9.18 |
trichloroethylene | $ 10.79 |
triethanolamine | $ 6.04 |
triisopropanolamine | $ 12.84 |
trimethylolpropane | $ 4.63 |
urea | $ 3.01 |
vinyl acetate | $ 3.83 |
vinyl chloride | $ 7.46 |
https://www.irs.gov/newsroom/irs-issues-superfund-chemical-excise-tax-rates
June 27, 2022
IRS Issues Excise Tax Rates
IRS issues Superfund chemical excise tax rates
- Topics in the News
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- Multimedia Center
- Tax Relief in Disaster Situations
- Tax Reform
- Taxpayer First Act
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IR-2022-132, June 24, 2022
WASHINGTON — The Internal Revenue Service announced today that it has prescribed tax rates for 121 taxable substances that are subject to the Superfund chemical excise tax imposed by section 4671(a) of the Internal Revenue Code (Code).
Taxable substances are those substances listed in either section 4672(a)(3) of the Code or Notice 2021-66. Substances may be added or removed from the list of taxable substances at a later date.
The rates will be included in the instructions to Form 6627, Environmental Taxes, and under Recent Developments for Form 6627, Environmental Taxes.
Taxable Substance | Tax Rate per Ton |
---|---|
1,3-butylene glycol | $ 7.28 |
1,4 butanediol | $ 4.68 |
1,5,9-cyclododecatriene | $ 9.74 |
2-ethyl hexanol | $ 7.16 |
2-ethylhexyl acrylate | $ 7.34 |
acetone | $ 20.06 |
acetylene black | $ 10.52 |
acrylic acid resins | $ 5.65 |
methacrylic acid resins | $ 14.94 |
acrylonitrile | $ 9.38 |
adipic acid | $ 6.13 |
adiponitrile | $ 8.57 |
allyl chloride | $ 10.38 |
alpha-methylstyrene | $ 9.93 |
ammonium nitrate | $ 1.49 |
aniline | $ 9.40 |
benzaldehyde | $ 8.47 |
benzoic acid | $ 7.31 |
bisphenol-A | $ 10.23 |
butanol | $ 6.31 |
butyl acrylate | $ 6.84 |
butyl benzyl phthalate | $ 12.15 |
carbon tetrachloride | $ 10.62 |
chlorinated polyethylene | $ 10.25 |
chloroform | $ 10.51 |
chromic acid | $ 4.37 |
cumene | $ 9.74 |
cyclododecanol | $ 9.05 |
cyclohexane | $ 10.02 |
decabromodiphenyl oxide | $ 17.99 |
di-2 ethyl hexyl phthalate | $ 7.37 |
diethanolamine | $ 6.01 |
diglycidyl ether of bisphenol-A | $ 13.86 |
diisopropanolamine | $ 12.76 |
dimethyl terephthalate | $ 5.91 |
dimethyl-2, 6-naphthalene dicarboxylate | $ 6.81 |
di-n-hexyl adipate | $ 8.23 |
diphenyl oxide | $ 13.73 |
diphenylamine | $ 10.28 |
epichlorohydrin | $ 12.89 |
ethyl acrylate | $ 4.09 |
ethyl alcohol for nonbeverage use | $ 5.94 |
ethyl chloride | $ 4.52 |
ethyl methyl ketone | $ 7.60 |
ethyl benzene | $ 9.74 |
ethylene dibromide | $ 9.03 |
ethylene dichloride | $ 6.62 |
ethylene glycol | $ 4.38 |
ethylene oxide | $ 6.23 |
ferrochrome ov 3 pct. carbon | $ 4.83 |
ferrochromium nov 3 pct | $ 4.83 |
hexabromocyclododecane | $ 9.11 |
hexamethylenediamine | $ 8.93 |
isobutyl acetate | $ 4.47 |
Isophthalic acid | $ 6.23 |
isopropyl acetate | $ 4.54 |
Isopropyl alcohol | $ 6.82 |
linear alpha olefins | $ 9.74 |
maleic anhydride | $ 5.75 |
melamine | $ 4.28 |
methyl acrylate | $ 5.39 |
methyl chloroform | $ 6.37 |
methyl isobutyl ketone | $ 23.65 |
methyl methacrylate | $ 14.75 |
methylene chloride | $ 10.33 |
monochlorobenzene | $ 10.12 |
monoethanolamine | $ 5.96 |
monoisopropanolamine | $ 11.74 |
nickel oxide | $ 7.03 |
normal butyl acetate | $ 4.47 |
normal propyl acetate | $ 3.73 |
nylon 6/6 | $ 8.67 |
ortho-dichlorobenzene | $ 10.35 |
ortho-nitrochlorobenzene | $ 7.49 |
para-dichlorobenzene | $ 10.35 |
para-nitrochlorobenzene | $ 7.49 |
para-nitrophenol | $ 8.59 |
pentaerythritol | $ 3.86 |
perchloroethylene | $ 10.89 |
phenol | $ 12.47 |
phenolic resins | $ 9.86 |
phosphorous pentasulfide | $ 2.49 |
phosphorous trichloride | $ 6.21 |
phthalic anhydride | $ 7.01 |
poly 1,4 butyleneterephthalate | $ 7.21 |
poly(propylene)glycol | $ 10.38 |
poly(propylene/ethylene)glycol | $ 8.84 |
poly(propyleneoxy)sucrose | $ 2.04 |
poly(propyleneoxy/ethyleneoxy)sucrose | $ 2.57 |
polyalphaolefins | $ 11.37 |
polybutadiene | $ 9.74 |
polybutene | $ 9.74 |
polybutylene | $ 9.74 |
polybutylene/ethylene | $ 9.74 |
polycarbonate | $ 10.84 |
polyethylene resins, total | $ 9.74 |
polyethylene terephthalate pellets | $ 6.82 |
polypropylene | $ 9.74 |
polypropylene resins | $ 9.74 |
polystyrene homopolymer resins | $ 9.93 |
polyvinylchloride resins | $ 7.46 |
propanol | $ 5.47 |
propylene glycol | $ 10.38 |
propylene oxide | $ 13.60 |
styrene | $ 9.93 |
styrene-butadiene, latex | $ 9.84 |
synthetic linear fatty alcohol ethoxylates | $ 7.12 |
synthetic linear fatty alcohols | $ 9.29 |
terephthalic acid | $ 6.23 |
tetrabromobisphenol-A | $ 14.79 |
tetrachlorophthalic anhydride | $ 8.95 |
tetrahydrofuran | $ 5.78 |
toluene diisocyanate | $ 10.85 |
toluenediamine | $ 9.18 |
trichloroethylene | $ 10.79 |
triethanolamine | $ 6.04 |
triisopropanolamine | $ 12.84 |
trimethylolpropane | $ 4.63 |
urea | $ 3.01 |
vinyl acetate | $ 3.83 |
vinyl chloride | $ 7.46 |
https://www.irs.gov/newsroom/irs-issues-superfund-chemical-excise-tax-rates
June 2, 2022
Superfund Tax Overview
Chem firms brace for new US Superfund taxes
Author: Al Greenwood
2022/04/28
HOUSTON (ICIS)–Chemical companies are bracing themselves for the return of two Superfund taxes, one of which covers 42 chemicals made or imported in the US and another covering an even wider range of substances imported into the country.
- US will revive two Superfund taxes on 1 July 2022.
- One tax applies to 42 chemicals sold or used by producers or importers.
- Another tax could apply to many more substances that are imported.
The US is reviving the taxes as part of the $1trn Infrastructure Investment and Jobs Act that President Joe Biden signed into law in November.
The proceeds raised by the taxes will help replenish the government’s Superfund programme, which pays for clean-up at waste sites.
TAXABLE CHEMICALS
The tax levied on the 42 chemicals apply to some of the most common building blocks used in the industry.
These taxes are levied on a short-ton basis for the following 42 chemicals sold in the US by manufacturers or importers:
Taxable Chemical | Alias | $/Short Ton | Cent/lb |
Acetylene | 9.74 | 0.487 | |
Ammonia | 5.28 | 0.264 | |
Antimony Trioxide | 7.40 | 0.370 | |
Arsenic Trioxide | 6.82 | 0.341 | |
Barium sulphide | 4.60 | 0.230 | |
Benzene | 9.74 | 0.487 | |
Bromine | 8.90 | 0.445 | |
Butadiene | BD | 9.74 | 0.487 |
Butane | 9.74 | 0.487 | |
Butylene | 9.74 | 0.487 | |
Chlorine | 5.40 | 0.270 | |
Chromite | 3.04 | 0.152 | |
Cupric oxide | 7.18 | 0.359 | |
Cupric sulphate | 3.74 | 0.187 | |
Cuprous oxide | 7.94 | 0.397 | |
Ethylene | 9.74 | 0.487 | |
Hydrochloric acid | HCl | 0.58 | 0.029 |
Hydrogen fluoride | hydrofluoric acid (HF) | 8.46 | 0.423 |
Lead oxide | 8.28 | 0.414 | |
Methane | 6.88 | 0.344 | |
Naphthalene | 9.74 | 0.487 | |
Nitric acid | 0.48 | 0.024 | |
Phosphorus | 8.90 | 0.445 | |
Potassium dichromate | 3.38 | 0.169 | |
Potassium hydroxide | Caustic potash | 0.44 | 0.022 |
Propylene | 9.74 | 0.487 | |
Sodium dichromate | 3.74 | 0.187 | |
Sodium hydroxide | Caustic soda | 0.56 | 0.028 |
Stannic chloride | 4.24 | 0.212 | |
Stannous chloride | 5.70 | 0.285 | |
Sulphuric acid | 0.52 | 0.026 | |
Toluene | 9.74 | 0.487 | |
Xylene | 9.74 | 0.487 | |
Zinc chloride | 4.44 | 0.222 | |
Zinc sulphate | 3.80 | 0.190 | |
Antimony | 8.90 | 0.445 | |
Arsenic | 8.90 | 0.445 | |
Cadmium | 8.90 | 0.445 | |
Chromium | 8.90 | 0.445 | |
Cobalt | 8.90 | 0.445 | |
Mercury | 8.90 | 0.445 | |
Nickel | 8.90 | 0.445 |
Source: Deloitte
Paraxylene (PX), an isomer of xylene, would be subject to the tax once it is imported into the country, said Jeffery Wright, US oil, gas & chemicals tax leader for Deloitte, a consultancy. For xylene, the tax becomes due upon the first sale or the first use.
The tax does include some exceptions.
Exporters can apply for a refund, according to Deloitte. Companies that use the chemicals to make fuel, fertilizer or animal feed are also exempt.
Based on those exceptions, hydrofluoric acid or propylene used in the alkylation units of refineries could be exempt, since those chemicals would be used to make gasoline. Butane could avoid the tax if it is blended in gasoline.
Ammonia used to make nitrogen fertilizers could also avoid the tax.
Methane could escape taxes if it is burned as a fuel in power plants or used to make hydrogen for feedstock in refineries.
However, if the methane is used to make methanol for downstream chemical production, it could be taxed.
The tax also exempts coal derivatives and sulphuric acid that is a by-product of air-pollution control.
TAXABLE SUBSTANCES
The second tax covers substances sold or used by importers, according to Mayer Brown, a law firm.
The tax will cover imports that contain at least 20% of the 42 taxable chemicals. The tax rate would depend on the percent of the taxable chemicals contained by the substance.
For example, a short ton of a taxable substance that contains 20% propylene would be subject to an excise tax rate that is 20% of that for propylene. Since the propylene tax rate is $9.74/ton, the rate for the taxable substance would be $1.95/ton.
It is up to the importer to determine the rate for a taxable substance and maintain the records that would back their findings. If the company comes short, the IRS will impose a 10% tax based on the substance’s value when it enters the country.
So far, there are 151 taxable substances that could meet this 20% threshold, according to lists from the Internal Revenue Service (IRS).
One of these lists was published when the Superfund tax was last in effect in the 1990s, Wright said. Another list was from historic notices that also date from the 1990s. At the time, the substances in the two lists contained at least 50% of the taxable chemicals.
It is presumed that they still contain at least 20%, Wright said.
The table below shows some of the taxable substances in the lists that are followed by ICIS.
Chemical | Alias |
1,4 butanediol | BDO |
acetic acid | |
acetone | |
acrylic and methacrylic acid resins | |
acrylonitrile | ACN |
adipic acid | |
adiponitrile | ADN |
bisphenol-A | BPA |
butanol | normal butanol or NBA |
butyl acetate | butac |
butyl acrylate | butyl-a |
cumene | |
cyclohexane | CX |
dimethyl terephthalate | DMT |
epichlorohydrin | EPC |
ethyl acetate | etac |
ethyl acrylate | ethyl-A |
ethyl alcohol for non-beverage use | ethanol |
ethylbenzene | EB |
ethylene dichloride | EDC |
ethylene glycol | EG |
ethylene oxide | EO |
formaldehyde | |
glycerine | |
isopropyl alcohol | isopropanol (IPA) |
linear alpha olefins | LAOs or normal alpha olefins (NAOs) |
maleic anhydride | MA |
melamine | |
methanol | |
methyl acrylate | metyl-A |
methyl ethyl ketone | MEK |
methyl isobutyl ketone | MIBK |
methyl methacrylate | MMA |
nylon 6/6 | |
phenol | |
phenolic resins | |
phthalic anhydride | PA |
polyalphaolefins | PAOs |
polycarbonate | PC |
polyethylene resins, total | PE |
polyethylene terephthalate pellets | PET |
polypropylene | PP |
polypropylene resins | PP |
polystyrene homopolymer resins | PS |
polystyrene resins and copolymers | PS |
polyvinylchloride resins | PVCC |
propanol | n-propanol |
propylene glycol | PG |
propylene oxide | PO |
styrene | |
styrene-butadiene, latex | |
styrene-butadiene, snpf | |
synthetic linear fatty alcohol ethoxylates | |
synthetic linear fatty alcohols | |
synthetic rubber, not containing fillers | |
terephthalic acid | purified terephthalic acid (PTA) |
toluene diisocyanate | TDI |
urea | |
vinyl acetate | VAM |
vinyl chloride | VCM |
vinyl resins | PVC |
vinyl resins, nspf | PVC |
Source: Deloitte
Some of these taxes will be problematic. The US has just one plant that makes melamine. It has no domestic production for methyl ethyl ketone (MEK) and relies solely on imports.
The list could be modified to add taxable substances that meet the 20% threshold or remove them that no longer meet the threshold, said Shawn O’Brien a partner at Mayer Brown. Advances or changes in production methods could cause some of the substances to contain less than 20% of the taxable chemicals.
For example, some of these chemicals can be made with renewable feedstock, such as butanediol (BDO), polyethylene (PE) and monoethylene glycol (MEG). Others could be made from feedstock derived from chemically recycled plastics.
PASSING THE BUCK
If companies choose to pass through the taxes, it will likely appear as line items, O’Brien said. He could see the tax being passed down to end consumers.
In total, the amount could be substantial.
The Superfund taxes could raise $452m in 2022 and $1.17bn in 2023, according to the congressional Joint Committee on Taxation. By the time the tax ends on 31 December 2031, the proceeds could reach $14.5bn.
Wright said that companies could evaluate existing contracts with suppliers and customers to see if they can pass along the taxes. Ultimately, each company will have to determine the pros and cons of absorbing the taxes versus passing them along.
To make things clearer for companies, the American Chemistry Council (ACC), a trade group, has asked that the IRS publish tax rates for the taxable substances.
It also asked the IRS to include the harmonised tariff schedule (HTS) numbers and the chemical abstract service numbers of the taxable substances.
The HTS numbers are used by countries around the world to determine which products are subject to a specific tariff. Such numbers allow governments to impose the tariffs in a consistent and clear way.
The list of 151 taxable substances could certainly use some more clarity. It lists polypropylene and polypropylene resins as separate items. HTS numbers could reveal whether the tax applies to two different grades of polypropylene or if the IRS simply listed the same product twice.
The ACC noted that the 20% threshold could cause a lot of chemicals to fall under the definition of a taxable substance. The ACC would like the government to publish rules under which companies could request the removal of chemicals from the list of taxable substances.
The following table shows the full list of the 151 taxable substances that, if imported, would be subject to the Superfund tax.
Chemical | Alias |
1,4 butanediol | BDO |
1,3-butylene glycol | |
1,5,9- cyclododecatriene | |
2-ethyl hexanol | |
2-ethylhexyl acrylate | |
2,2,4-trimethyl- 1,3-pentanediol diisobutyrate | |
2,2,4-trimethyl- 1,3-pentanediol monoisobutyrate | |
acetic acid | |
acetylene black | |
adipic acid | |
adiponitrile | ADN |
allyl chloride | |
alpha- methylstyrene | |
aniline | |
benzaldehyde | |
benzoic acid | |
bisphenol-A | BPA |
butanol | normal butanol or NBA |
butyl acrylate | butyl-a |
butyl benzyl phthalate | |
chlorinated polyethylene | |
cyclododecanol | |
decabromodiphenyl oxide | |
di-2 ethyl hexyl phthalate | |
di-n-hexyl adipate | |
diethanolamine | DEA |
diglycidyl ether of bisphenol-A | |
diisopropano- lamine | |
dimethyl terephthalate | DMT |
dimethyl-2, 6-naphthalene dicarboxylate | |
diphenyl oxide | |
diphenylamine | |
epichlorohydrin | EPC |
ethyl acetate | etac |
ethyl acrylate | ethyl-A |
ethyl chloride | |
ethylene dibromide | |
ethylenebistetra- bromo- phthalimide | |
formic acid | |
glycerine | |
hexabromocyclod odecane | |
hexamethylenedia mine | |
isobutyl acetate | |
isopropyl acetate | |
linear alpha olefins | LAOs or normal alpha olefins (NAOs) |
methyl acrylate | metyl-A |
methyl chloroform | |
methyl isobutyl ketone | MIBK |
methyl methacrylate | MMA |
monochloro- benzene | |
monoethanolamine | MEA |
monoisopro- panolamine | |
normal butyl acetate | butac |
normal propyl acetate | |
nylon 6/6 | |
ortho- dichlorobenzene | |
ortho-nitrochloro- benzene | |
paraformaldehyde | |
para- dichlorobenzene | |
para-nitrochloro- benzene | |
para-nitrophenol | |
pentaerythritol | |
perchloroethylene | |
phenol | |
phosphorous pentasulfide | |
phosphorous trichloride | |
poly 1,4 butylenetere-phthalate | |
poly (69/31 ethylene/ cyclohexylene- dimethylene terephthalate) | |
poly (96.5/3.5 ethylene/ cyclohexylene-dimethylene terephthalate) | |
poly (98.5/1.5 ethylene/ cyclohexylene-dimethylene terephthalate) | |
poly(ethyleneoxy) glycerol | |
poly(propylene) glycol | |
poly(propylene/ ethylene) glycol | |
poly(propyleneoxy) glycerol | |
poly(propyleneoxy)s ucrose | |
poly(propyleneoxy/ ethyleneoxy) benzenediamine | |
poly(propyleneoxy/ ethyleneoxy)diamine | |
poly(propyleneoxy/ ethyleneoxy)glycerol | |
poly(propyleneoxy/ ethyleneoxy)sucrose | |
polyalphaolefins | PAOs |
polybutene | |
polybutylene | |
polybutylene/ ethylene | |
polycarbonate | PC |
polyethylene terephthalate pellets | PET |
propanol | n-propanol |
sodium nitriolotriacetate monohydrate | |
synthetic linear fatty alcohols | |
synthetic linear fatty alcohol ethoxylates | |
terephthalic acid | purified terephthalic acid (PTA) |
tetrabromo- bisphenol-A | |
tetrachloro-phthalic anhydride | |
tetrahydrofuran | |
texanol benzyl phthalate | |
toluene diisocyanate | TDI |
toluenediamine | |
trichloroethylene | |
triethanolamine | TEA |
triisopropanolamine | |
trimethylolpropane | |
vinyl acetate | VAM |
acetone | |
acrylic and methacrylic acid resins | |
acrylonitrile | ACN |
ammonium nitrate | |
carbon tetrachloride | |
chloroform | |
chromic acid | |
cumene | |
cyclohexane | CX |
ethyl alcohol for nonbeverage use | ethanol |
ethylbenzene | EB |
ethylene dichloride | EDC |
ethylene glycol | EG |
ethylene oxide | EO |
ethyl methyl ketone | MEK |
ferrochrome ov 3 pct. carbon | |
ferrochromium nov 3 pct | |
ferronickel | |
formaldehyde | |
hydrogen peroxide | |
isophtalic acid | |
isopropyl alcohol | isopropanol (IPA) |
maleic anhydride | MA |
melamine | |
methanol | |
methylene chloride | |
nickel oxide | |
nickel powders | |
nickel waste and scrap | |
phenolic resins | |
phthalic anyhydride | PA |
polybutadiene | |
polypropylene resins | PP |
polystyrene homopolymer resins | PS |
polyethylene resins, total | PE |
polypropylene | PP |
polystyrene resins and copolymers | PS |
polyvinylchloride resins | PVCC |
propylene glycol | PG |
propylene oxide | PO |
styrene | |
styrene-butadiene, latex | |
styrene-butadiene, snpf | |
synthetic rubber, not containing fillers | |
unwrought nickel | |
urea | |
vinyl chloride | VCM |
vinyl resins | PVC |
vinyl resins, nspf | PVC |
wrought nickel rods and wire |
Source: Deloitte
Thumbnail shows dollars. Image by Shutterstock
By Al Greenwood
June 2, 2022
Superfund Tax Overview
Chem firms brace for new US Superfund taxes
Author: Al Greenwood
2022/04/28
HOUSTON (ICIS)–Chemical companies are bracing themselves for the return of two Superfund taxes, one of which covers 42 chemicals made or imported in the US and another covering an even wider range of substances imported into the country.
- US will revive two Superfund taxes on 1 July 2022.
- One tax applies to 42 chemicals sold or used by producers or importers.
- Another tax could apply to many more substances that are imported.
The US is reviving the taxes as part of the $1trn Infrastructure Investment and Jobs Act that President Joe Biden signed into law in November.
The proceeds raised by the taxes will help replenish the government’s Superfund programme, which pays for clean-up at waste sites.
TAXABLE CHEMICALS
The tax levied on the 42 chemicals apply to some of the most common building blocks used in the industry.
These taxes are levied on a short-ton basis for the following 42 chemicals sold in the US by manufacturers or importers:
Taxable Chemical | Alias | $/Short Ton | Cent/lb |
Acetylene | 9.74 | 0.487 | |
Ammonia | 5.28 | 0.264 | |
Antimony Trioxide | 7.40 | 0.370 | |
Arsenic Trioxide | 6.82 | 0.341 | |
Barium sulphide | 4.60 | 0.230 | |
Benzene | 9.74 | 0.487 | |
Bromine | 8.90 | 0.445 | |
Butadiene | BD | 9.74 | 0.487 |
Butane | 9.74 | 0.487 | |
Butylene | 9.74 | 0.487 | |
Chlorine | 5.40 | 0.270 | |
Chromite | 3.04 | 0.152 | |
Cupric oxide | 7.18 | 0.359 | |
Cupric sulphate | 3.74 | 0.187 | |
Cuprous oxide | 7.94 | 0.397 | |
Ethylene | 9.74 | 0.487 | |
Hydrochloric acid | HCl | 0.58 | 0.029 |
Hydrogen fluoride | hydrofluoric acid (HF) | 8.46 | 0.423 |
Lead oxide | 8.28 | 0.414 | |
Methane | 6.88 | 0.344 | |
Naphthalene | 9.74 | 0.487 | |
Nitric acid | 0.48 | 0.024 | |
Phosphorus | 8.90 | 0.445 | |
Potassium dichromate | 3.38 | 0.169 | |
Potassium hydroxide | Caustic potash | 0.44 | 0.022 |
Propylene | 9.74 | 0.487 | |
Sodium dichromate | 3.74 | 0.187 | |
Sodium hydroxide | Caustic soda | 0.56 | 0.028 |
Stannic chloride | 4.24 | 0.212 | |
Stannous chloride | 5.70 | 0.285 | |
Sulphuric acid | 0.52 | 0.026 | |
Toluene | 9.74 | 0.487 | |
Xylene | 9.74 | 0.487 | |
Zinc chloride | 4.44 | 0.222 | |
Zinc sulphate | 3.80 | 0.190 | |
Antimony | 8.90 | 0.445 | |
Arsenic | 8.90 | 0.445 | |
Cadmium | 8.90 | 0.445 | |
Chromium | 8.90 | 0.445 | |
Cobalt | 8.90 | 0.445 | |
Mercury | 8.90 | 0.445 | |
Nickel | 8.90 | 0.445 |
Source: Deloitte
Paraxylene (PX), an isomer of xylene, would be subject to the tax once it is imported into the country, said Jeffery Wright, US oil, gas & chemicals tax leader for Deloitte, a consultancy. For xylene, the tax becomes due upon the first sale or the first use.
The tax does include some exceptions.
Exporters can apply for a refund, according to Deloitte. Companies that use the chemicals to make fuel, fertilizer or animal feed are also exempt.
Based on those exceptions, hydrofluoric acid or propylene used in the alkylation units of refineries could be exempt, since those chemicals would be used to make gasoline. Butane could avoid the tax if it is blended in gasoline.
Ammonia used to make nitrogen fertilizers could also avoid the tax.
Methane could escape taxes if it is burned as a fuel in power plants or used to make hydrogen for feedstock in refineries.
However, if the methane is used to make methanol for downstream chemical production, it could be taxed.
The tax also exempts coal derivatives and sulphuric acid that is a by-product of air-pollution control.
TAXABLE SUBSTANCES
The second tax covers substances sold or used by importers, according to Mayer Brown, a law firm.
The tax will cover imports that contain at least 20% of the 42 taxable chemicals. The tax rate would depend on the percent of the taxable chemicals contained by the substance.
For example, a short ton of a taxable substance that contains 20% propylene would be subject to an excise tax rate that is 20% of that for propylene. Since the propylene tax rate is $9.74/ton, the rate for the taxable substance would be $1.95/ton.
It is up to the importer to determine the rate for a taxable substance and maintain the records that would back their findings. If the company comes short, the IRS will impose a 10% tax based on the substance’s value when it enters the country.
So far, there are 151 taxable substances that could meet this 20% threshold, according to lists from the Internal Revenue Service (IRS).
One of these lists was published when the Superfund tax was last in effect in the 1990s, Wright said. Another list was from historic notices that also date from the 1990s. At the time, the substances in the two lists contained at least 50% of the taxable chemicals.
It is presumed that they still contain at least 20%, Wright said.
The table below shows some of the taxable substances in the lists that are followed by ICIS.
Chemical | Alias |
1,4 butanediol | BDO |
acetic acid | |
acetone | |
acrylic and methacrylic acid resins | |
acrylonitrile | ACN |
adipic acid | |
adiponitrile | ADN |
bisphenol-A | BPA |
butanol | normal butanol or NBA |
butyl acetate | butac |
butyl acrylate | butyl-a |
cumene | |
cyclohexane | CX |
dimethyl terephthalate | DMT |
epichlorohydrin | EPC |
ethyl acetate | etac |
ethyl acrylate | ethyl-A |
ethyl alcohol for non-beverage use | ethanol |
ethylbenzene | EB |
ethylene dichloride | EDC |
ethylene glycol | EG |
ethylene oxide | EO |
formaldehyde | |
glycerine | |
isopropyl alcohol | isopropanol (IPA) |
linear alpha olefins | LAOs or normal alpha olefins (NAOs) |
maleic anhydride | MA |
melamine | |
methanol | |
methyl acrylate | metyl-A |
methyl ethyl ketone | MEK |
methyl isobutyl ketone | MIBK |
methyl methacrylate | MMA |
nylon 6/6 | |
phenol | |
phenolic resins | |
phthalic anhydride | PA |
polyalphaolefins | PAOs |
polycarbonate | PC |
polyethylene resins, total | PE |
polyethylene terephthalate pellets | PET |
polypropylene | PP |
polypropylene resins | PP |
polystyrene homopolymer resins | PS |
polystyrene resins and copolymers | PS |
polyvinylchloride resins | PVCC |
propanol | n-propanol |
propylene glycol | PG |
propylene oxide | PO |
styrene | |
styrene-butadiene, latex | |
styrene-butadiene, snpf | |
synthetic linear fatty alcohol ethoxylates | |
synthetic linear fatty alcohols | |
synthetic rubber, not containing fillers | |
terephthalic acid | purified terephthalic acid (PTA) |
toluene diisocyanate | TDI |
urea | |
vinyl acetate | VAM |
vinyl chloride | VCM |
vinyl resins | PVC |
vinyl resins, nspf | PVC |
Source: Deloitte
Some of these taxes will be problematic. The US has just one plant that makes melamine. It has no domestic production for methyl ethyl ketone (MEK) and relies solely on imports.
The list could be modified to add taxable substances that meet the 20% threshold or remove them that no longer meet the threshold, said Shawn O’Brien a partner at Mayer Brown. Advances or changes in production methods could cause some of the substances to contain less than 20% of the taxable chemicals.
For example, some of these chemicals can be made with renewable feedstock, such as butanediol (BDO), polyethylene (PE) and monoethylene glycol (MEG). Others could be made from feedstock derived from chemically recycled plastics.
PASSING THE BUCK
If companies choose to pass through the taxes, it will likely appear as line items, O’Brien said. He could see the tax being passed down to end consumers.
In total, the amount could be substantial.
The Superfund taxes could raise $452m in 2022 and $1.17bn in 2023, according to the congressional Joint Committee on Taxation. By the time the tax ends on 31 December 2031, the proceeds could reach $14.5bn.
Wright said that companies could evaluate existing contracts with suppliers and customers to see if they can pass along the taxes. Ultimately, each company will have to determine the pros and cons of absorbing the taxes versus passing them along.
To make things clearer for companies, the American Chemistry Council (ACC), a trade group, has asked that the IRS publish tax rates for the taxable substances.
It also asked the IRS to include the harmonised tariff schedule (HTS) numbers and the chemical abstract service numbers of the taxable substances.
The HTS numbers are used by countries around the world to determine which products are subject to a specific tariff. Such numbers allow governments to impose the tariffs in a consistent and clear way.
The list of 151 taxable substances could certainly use some more clarity. It lists polypropylene and polypropylene resins as separate items. HTS numbers could reveal whether the tax applies to two different grades of polypropylene or if the IRS simply listed the same product twice.
The ACC noted that the 20% threshold could cause a lot of chemicals to fall under the definition of a taxable substance. The ACC would like the government to publish rules under which companies could request the removal of chemicals from the list of taxable substances.
The following table shows the full list of the 151 taxable substances that, if imported, would be subject to the Superfund tax.
Chemical | Alias |
1,4 butanediol | BDO |
1,3-butylene glycol | |
1,5,9- cyclododecatriene | |
2-ethyl hexanol | |
2-ethylhexyl acrylate | |
2,2,4-trimethyl- 1,3-pentanediol diisobutyrate | |
2,2,4-trimethyl- 1,3-pentanediol monoisobutyrate | |
acetic acid | |
acetylene black | |
adipic acid | |
adiponitrile | ADN |
allyl chloride | |
alpha- methylstyrene | |
aniline | |
benzaldehyde | |
benzoic acid | |
bisphenol-A | BPA |
butanol | normal butanol or NBA |
butyl acrylate | butyl-a |
butyl benzyl phthalate | |
chlorinated polyethylene | |
cyclododecanol | |
decabromodiphenyl oxide | |
di-2 ethyl hexyl phthalate | |
di-n-hexyl adipate | |
diethanolamine | DEA |
diglycidyl ether of bisphenol-A | |
diisopropano- lamine | |
dimethyl terephthalate | DMT |
dimethyl-2, 6-naphthalene dicarboxylate | |
diphenyl oxide | |
diphenylamine | |
epichlorohydrin | EPC |
ethyl acetate | etac |
ethyl acrylate | ethyl-A |
ethyl chloride | |
ethylene dibromide | |
ethylenebistetra- bromo- phthalimide | |
formic acid | |
glycerine | |
hexabromocyclod odecane | |
hexamethylenedia mine | |
isobutyl acetate | |
isopropyl acetate | |
linear alpha olefins | LAOs or normal alpha olefins (NAOs) |
methyl acrylate | metyl-A |
methyl chloroform | |
methyl isobutyl ketone | MIBK |
methyl methacrylate | MMA |
monochloro- benzene | |
monoethanolamine | MEA |
monoisopro- panolamine | |
normal butyl acetate | butac |
normal propyl acetate | |
nylon 6/6 | |
ortho- dichlorobenzene | |
ortho-nitrochloro- benzene | |
paraformaldehyde | |
para- dichlorobenzene | |
para-nitrochloro- benzene | |
para-nitrophenol | |
pentaerythritol | |
perchloroethylene | |
phenol | |
phosphorous pentasulfide | |
phosphorous trichloride | |
poly 1,4 butylenetere-phthalate | |
poly (69/31 ethylene/ cyclohexylene- dimethylene terephthalate) | |
poly (96.5/3.5 ethylene/ cyclohexylene-dimethylene terephthalate) | |
poly (98.5/1.5 ethylene/ cyclohexylene-dimethylene terephthalate) | |
poly(ethyleneoxy) glycerol | |
poly(propylene) glycol | |
poly(propylene/ ethylene) glycol | |
poly(propyleneoxy) glycerol | |
poly(propyleneoxy)s ucrose | |
poly(propyleneoxy/ ethyleneoxy) benzenediamine | |
poly(propyleneoxy/ ethyleneoxy)diamine | |
poly(propyleneoxy/ ethyleneoxy)glycerol | |
poly(propyleneoxy/ ethyleneoxy)sucrose | |
polyalphaolefins | PAOs |
polybutene | |
polybutylene | |
polybutylene/ ethylene | |
polycarbonate | PC |
polyethylene terephthalate pellets | PET |
propanol | n-propanol |
sodium nitriolotriacetate monohydrate | |
synthetic linear fatty alcohols | |
synthetic linear fatty alcohol ethoxylates | |
terephthalic acid | purified terephthalic acid (PTA) |
tetrabromo- bisphenol-A | |
tetrachloro-phthalic anhydride | |
tetrahydrofuran | |
texanol benzyl phthalate | |
toluene diisocyanate | TDI |
toluenediamine | |
trichloroethylene | |
triethanolamine | TEA |
triisopropanolamine | |
trimethylolpropane | |
vinyl acetate | VAM |
acetone | |
acrylic and methacrylic acid resins | |
acrylonitrile | ACN |
ammonium nitrate | |
carbon tetrachloride | |
chloroform | |
chromic acid | |
cumene | |
cyclohexane | CX |
ethyl alcohol for nonbeverage use | ethanol |
ethylbenzene | EB |
ethylene dichloride | EDC |
ethylene glycol | EG |
ethylene oxide | EO |
ethyl methyl ketone | MEK |
ferrochrome ov 3 pct. carbon | |
ferrochromium nov 3 pct | |
ferronickel | |
formaldehyde | |
hydrogen peroxide | |
isophtalic acid | |
isopropyl alcohol | isopropanol (IPA) |
maleic anhydride | MA |
melamine | |
methanol | |
methylene chloride | |
nickel oxide | |
nickel powders | |
nickel waste and scrap | |
phenolic resins | |
phthalic anyhydride | PA |
polybutadiene | |
polypropylene resins | PP |
polystyrene homopolymer resins | PS |
polyethylene resins, total | PE |
polypropylene | PP |
polystyrene resins and copolymers | PS |
polyvinylchloride resins | PVCC |
propylene glycol | PG |
propylene oxide | PO |
styrene | |
styrene-butadiene, latex | |
styrene-butadiene, snpf | |
synthetic rubber, not containing fillers | |
unwrought nickel | |
urea | |
vinyl chloride | VCM |
vinyl resins | PVC |
vinyl resins, nspf | PVC |
wrought nickel rods and wire |
Source: Deloitte
Thumbnail shows dollars. Image by Shutterstock
By Al Greenwood