Restoring Accountability: Proposed Regulations to Reinstate Superfund Chemical Tax and Superfund Imported Substance Tax

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Restoring Accountability: Proposed Regulations to Reinstate Superfund Chemical Tax and Superfund Imported Substance Tax

How Reinstating Taxes Can Secure Funding and Encourage Safer Practices for Hazardous Waste Clean up

The U.S. government created the Superfund program in 1980 as a way to clean up risky waste sites across the United States. Funded by a tax on chemical and petroleum industries, the program was successful in cleaning up thousands of tainted sites. However, lawmakers allowed the tax to expire in 1995 and have not reinstated it since. As a result, the Superfund program has struggled to secure the necessary funding to address new taint sites.

The US Treasury Department and IRS have released proposed regulations (REG-105954-22) in the Federal Register to offer guidance on the reinstated excise taxes for specific chemicals and imported substances starting on July 1, 2022 (known as Superfund chemical taxes). The Federal Register published regulations on March 29, 2023, which will apply to sales or uses from the date they are finalized. These regulations will cover the calendar quarters starting from that date. Taxpayers and affiliates defined in sections 267(b) and 707(b)(1) can use proposed regulations before finalization. As long as they adhere to all the provisions consistently and entirely.

The Superfund chemical tax would impose a fee on the manufacturers or importers of certain chemicals and products. Based on their potential for causing environmental damage or harm to human health. The tax would be based on a formula that takes into account the potential risk of a chemical. The volume produced or imported, and the market price of the chemical.

The Superfund external element tax would impose a fee on external element that pose a risk to health and environment. The tax would be based on the same formula as the Superfund chemical tax.

Both of these taxes would generate significant revenue for the Superfund program, allowing it to more effectively address taint sites across the country. In addition, the taxes would create a benefit for companies to develop safer products and processes, minimizing the potential for taint in the first place.

Critics of these draft rules argue that the taxes would place an undue burden on industry and lead to higher prices for consumers. However, supporters argue that the cost of cleaning up risky waste sites falls disproportionately on local communities and that the companies responsible for creating these sites should be held accountable for the costs of their clean up.

In addition, the taxes would provide an important source of funding for the Superfund program. Which has struggled to secure the necessary funding to address new taint sites and ongoing clean up efforts.

Overall, the reinstatement of the Superfund chemical tax and Superfund outward element tax would be an important step towards ensuring. We should hold companies accountable for the ecological and health impacts of their products and processes. By providing a reliable source of funding the Superfund program, these taxes would help protect the environment for future generations.

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