Technological watch
ACC Testifies at Public Hearing on Implementation of Superfund Excise Taxes on Chemicals
WASHINGTON (October 25, 2023) — The American Chemistry Council (ACC) issued the following statement after an Internal Revenue Service (IRS) and Department of the Treasury public hearing on proposed regulations relating to excise taxes on certain chemicals and certain taxable substances. ACC Senior Director Robert Flagg and select member companies testified at the hearing. Earlier this year, ACC filed comments in response to the Notice of Proposed Rulemaking (NPRM).
“Chemistry companies are among the largest investors in research and development and are advancing products, processes, and technologies to address climate change, enhance air and water quality, and progress toward a more sustainable, circular economy. While ACC opposes the reinstatement of the Superfund Tax on Chemicals (SCT), we appreciate the opportunity to provide feedback on the NPRM and outline specific changes that are needed.
“As noted in our past advocacy on this issue, the reinstated SCT will affect chemical supply chains and markets and could lead to higher costs for consumers. Compounding the problem, these taxes were reinstated without modifications that would reflect advancements and efficiencies in chemical manufacturing processes that have occurred since the sunset of the SCT in the 1990s.
“Recycling of chemicals is a good example. This process is more common and feasible than 25 years ago. While the NPRM acknowledges that Congress intended for the SCT to apply only once to a given quantity of a taxable chemical, it states that recyclers are considered manufacturers of the taxable chemical, thereby triggering the tax. The final rule should clarify that the definition of ‘recycling’ excludes scenarios where a taxable chemical is reused in a continuous or recurring process, not recycled into a new product.
“ACC has additional concerns with the proposal, including provisions that conflict with the statutory language or create burdensome, confusing, and costly requirements for taxpayers, including downstream purchasers. In some cases, the NPRM conflicts with the historical position of the IRS. We urge Treasury and the IRS to consider our concerns and suggestions and promptly issue the final rules.”
“Chemistry companies are among the largest investors in research and development and are advancing products, processes, and technologies to address climate change, enhance air and water quality, and progress toward a more sustainable, circular economy. While ACC opposes the reinstatement of the Superfund Tax on Chemicals (SCT), we appreciate the opportunity to provide feedback on the NPRM and outline specific changes that are needed.
“As noted in our past advocacy on this issue, the reinstated SCT will affect chemical supply chains and markets and could lead to higher costs for consumers. Compounding the problem, these taxes were reinstated without modifications that would reflect advancements and efficiencies in chemical manufacturing processes that have occurred since the sunset of the SCT in the 1990s.
“Recycling of chemicals is a good example. This process is more common and feasible than 25 years ago. While the NPRM acknowledges that Congress intended for the SCT to apply only once to a given quantity of a taxable chemical, it states that recyclers are considered manufacturers of the taxable chemical, thereby triggering the tax. The final rule should clarify that the definition of ‘recycling’ excludes scenarios where a taxable chemical is reused in a continuous or recurring process, not recycled into a new product.
“ACC has additional concerns with the proposal, including provisions that conflict with the statutory language or create burdensome, confusing, and costly requirements for taxpayers, including downstream purchasers. In some cases, the NPRM conflicts with the historical position of the IRS. We urge Treasury and the IRS to consider our concerns and suggestions and promptly issue the final rules.”
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