Last month, the IRS published Notice 2021-66, issued in response to the Infrastructure Investment and Jobs Act’s (Jobs Act) reinstatement of the previously expired “Superfund Tax”—an excise tax imposed on manufacturers, producers, and importers of certain chemicals (i.e., “taxable chemicals”) found in fuels and numerous other industrial products. Understanding whether, and how, the Superfund Tax affects businesses’ tax liabilities will be critical when the tax becomes effective later this year. But given the lack of current IRS guidance and the fact that the Superfund Tax was last in effect over 25 years ago, affected taxpayers will likely face sizable challenges and uncertainties moving forward.
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When the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) was originally enacted in 1980, the excise tax was used, in part, to fund the Superfund cleanup trust for contaminated sites based on certain sales or uses of taxable chemicals. That taxing authority expired at the end of 1995. Now, however, the Jobs Act reinstates the tax effective July 1, 2022, with an initial expiration date of Dec. 31, 2031. The new Superfund Tax is expected to infuse $14.5 billion into the Superfund program over the next decade.