On August 4, 2025, the Internal Revenue Service (IRS) published a notice of determinations that modifies the list of taxable substances to include the following 21 substances: polyphenylene sulfide, cellulose acetate (degree of substitution = 1.5-2.0), 4,4′-isopropylidenediphenol-epichlorohydrin copolymer, nylon 6, caprolactam, methyl ethyl ketoxime, iso-butanol, diethylene glycol monomethyl ether, ethylene glycol phenyl ether, methoxytriglycol, propylene glycol methyl ether acetate, propylene glycol methyl ether, propylene glycol n-propyl ether, propylene glycol phenyl ether, di-isobutyl carbinol, di-isobutyl ketone, methyl isobutyl carbinol, cyanuric acid, potassium bicarbonate, potassium carbonate, and sodium chlorite. 90 Fed. Reg. 36520. For each of the substances, an importer, an exporter, or an interested person petitioned the IRS for a determination under Section 4672(a)(2) of the Internal Revenue Code (Code) to add the substance to the list. According to the IRS, for each substance, the petition represented that the taxable chemicals constitute more than 20 percent of the weight of materials used to produce the substance, based on the predominant method of production. After reviewing each petition, the Secretary determined that taxable chemicals constitute more than 20 percent by weight of the materials used to produce the substance, based on the predominant method of production. Therefore, each of the substances is added to the list as required under Section 4672(a)(2) and (4). The effective date for purposes of the tax under Section 4671 of the Code for the taxable substances added to the list is January 1, 2026. For the effective date for purposes of refund claims under Section 4662(e) of the Code for the taxable substances added to the list, the IRS states that stakeholders should see the determination for each substance. The notice “also modifies the list included in Notice 2021-66 by correcting a typographical error in the spelling of the name of the taxable substance sodium nitrilotriacetate monohydrate and prescribing a tax rate for sodium nitrilotriacetate monohydrate.” The tax rate for sodium nitrilotriacetate monohydrate is effective July 1, 2022.
More information on the Superfund excise tax on chemicals is available in our April 4, 2023, memorandum, “IRS Proposes Regulations Regarding Superfund Tax on Chemicals,” our July 13, 2022, memorandum, “Superfund Tax on Chemicals: What You Need to Know to Comply,” and our May 19, 2022, memorandum, “Reinstated Superfund Excise Tax Imposed on Certain Chemical Substances.”
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