n-21-66.pdf

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Superfund; Initial List of Taxable Substances; Registration; Procedural Rules; Request
for Comments; Suspension of Notice 89-61

Notice 2021-66

SECTION 1. PURPOSE
This notice relates to section 80201 of the Infrastructure Investment and Jobs Act
(IIJA), Public Law 117-58, 135 Stat. 429 (November 15, 2021), which reinstates,
effective July 1, 2022, the excise taxes imposed on certain chemical substances by
sections 4661 and 4671 of the Internal Revenue Code (Code) (collectively, Superfund
chemical taxes) and modifies the applicable rates of tax and other provisions related to
those taxes. (Unless otherwise stated, all section references in this notice are to the
Code.)
Pursuant to section 80201(c)(3) of the IIJA, this notice provides the initial list of
taxable substances under section 4672(a) required to be published by the Secretary of
the Treasury or her delegate (Secretary) no later than January 1, 2022. This notice also
addresses the registration requirements imposed by section 4662(b)(10)(C) and
(c)(2)(B) to exempt certain sales and uses of taxable chemicals from tax, and provides
the procedural rules that apply to taxpayers subject to the reinstated Superfund
chemical taxes. In addition, pending further guidance, this notice suspends Notice 89-
61, 1989-1 C.B. 717, as modified by Notice 95-39, 1995-1 C.B. 312, which prescribed
the former process for certain persons to request that certain substances be added to or
removed from the list of taxable substances under section 4672(a)(3) as previously in
effect. Finally, this notice requests comments on whether any issues related to the
reinstated Superfund chemical taxes require clarification or additional guidance.

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SECTION 2. BACKGROUND
The Comprehensive Environmental Response, Compensation, and Liability Act
of 1980 (CERCLA), Public Law 96-510, 94 Stat. 2767 (1980), informally referred to as
“Superfund,” was enacted, in part, to create a hazardous substance cleanup program.
Section 221 of CERCLA established the “Hazardous Substance Response Trust Fund,”
which was funded, in part, by the section 4661(a) tax on sales of taxable chemicals
(enacted by section 211 of CERCLA) and the section 4671(a) tax on sales or uses of
imported taxable substances that use one or more taxable chemicals in their
manufacture or production (enacted by section 515 of the Superfund Amendments and
Reauthorization Act of 1986, Public Law 99-499, 100 Stat. 1613 (1986)). The
Superfund chemical taxes as previously in effect expired on December 31, 1995.
Effective July 1, 2022, section 80201 of the IIJA reinstates the Superfund
chemical taxes with several modifications, including to the applicable rates of tax. In
addition, section 80201(c)(1) of the IIJA modifies the method under section
4672(a)(2)(B) for determining whether a substance is a taxable substance by lowering
the required percentage of taxable chemicals used to produce the substance from 50
percent to 20 percent of the weight (or the value) of the materials used to produce such
substance.
SECTION 3. LAW
Section 4661(a) imposes a tax on any taxable chemical sold by the
manufacturer, producer, or importer.
Section 4661(b) provides a list of taxable chemicals and the amount of tax
imposed by section 4661(a) on those chemicals.

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Section 4662 provides definitions and special rules applicable to the section
4661(a) tax.
Section 4662(b)(10)(C) and (c)(2)(B) requires parties to sales of certain
intermediate hydrocarbon streams and inventory exchanges to be registered by the IRS
in order to qualify for the exceptions in section 4662(b)(10)(A) and (c)(2)(A).
Section 4671(a) imposes a tax on any taxable substance sold or used by the
importer.
Section 4671(b) provides that the amount of tax imposed by section 4671(a) with
respect to any taxable substance is equal to the amount of tax that would have been
imposed by section 4661 on the taxable chemicals used as materials in the
manufacture of the taxable substance if such taxable chemicals had been sold in the
United States for use in the manufacture or production of the taxable substance.
Section 4672 provides definitions and special rules applicable to the section
4671(a) tax.

Section 4672(a)(1) generally provides that the term “taxable substance” means
any substance which, at the time of sale or use by the importer, is listed as a taxable
substance. Section 4672(a)(3) provides a list of taxable substances.
Section 4672(a)(2), as modified by section 80201(c)(1) of the IIJA, generally
provides that a substance shall be listed under section 4672(a)(1) if (A) the substance is
contained in the list in section 4672(a)(3), or (B) the Secretary determines, in
consultation with the Administrator of the Environmental Protection Agency and the
Commissioner of U.S. Customs and Border Protection, that taxable chemicals constitute
more than 20 percent of the weight (or more than 20 percent of the value) of the

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materials used to produce such substance (determined on the basis of the predominant
method of production). Section 4672(a)(2) further provides that an importer or exporter
of any substance may request a determination on whether that substance should be
added to or removed from the list of taxable substances.
Notice 89-61 provides rules for filing a petition to request a modification of the list
of taxable substances under section 4672(a).
SECTION 4. INITIAL LIST OF TAXABLE SUBSTANCES UNDER SECTION 4672(a)

Section 80201(c)(2) of the IIJA creates a presumption that any substance that
was determined to be a taxable substance under section 4672(a)(2) prior to November
15, 2021 (the date of enactment of the IIJA), continues to be treated as a taxable
substance for purposes of section 4672(a)(2). As noted above, section 80201(c)(3) of
the IIJA requires the Secretary to publish an initial list of taxable substances under
section 4672(a) by January 1, 2022.
Based on the presumption in section 80201(c)(2) of the IIJA and other
considerations, such as the reduction of the weight and value thresholds in section
4672(a)(2)(B) from 50 percent to 20 percent made by section 80201(c)(1) of the IIJA
and determinations regarding taxable substances previously made pursuant to the
process described in Notice 89-61, the Department of the Treasury (Treasury
Department) and the Internal Revenue Service (IRS) have determined that the initial list
of taxable substances required to be published by section 80201(c)(3) of the IIJA
includes only the taxable substances listed in section 4672(a)(3) and the following
substances:
1,4 butanediol

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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
allyl chloride
alpha-methylstyrene
aniline
benzaldehyde
benzoic acid
bisphenol-A
butanol
butyl acrylate
butyl benzyl phthalate
chlorinated polyethylene
cyclododecanol
decabromodiphenyl oxide
di-2 ethyl hexyl phthalate

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di-n-hexyl adipate
diethanolamine
diglycidyl ether of bisphenol-A
diisopropanolamine
dimethyl terephthalate
dimethyl-2, 6-naphthalene dicarboxylate
diphenyl oxide
diphenylamine
epichlorohydrin
ethyl acetate
ethyl acrylate
ethyl chloride
ethylene dibromide
ethylenebistetrabromophthalimide
formic acid
glycerine
hexabromocyclododecane
hexamethylenediamine
isobutyl acetate
isopropyl acetate
linear alpha olefins
methyl acrylate
methyl chloroform

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methyl isobutyl ketone
methyl methacrylate
monochlorobenzene
monoethanolamine
monoisopropanolamine
normal butyl acetate
normal propyl acetate
nylon 6/6
ortho-dichlorobenzene
ortho-nitrochlorobenzene
paraformaldehyde
para-dichlorobenzene
para-nitrochlorobenzene
para-nitrophenol
pentaerythritol
perchloroethylene
phenol
phosphorous pentasulfide
phosphorous trichloride
poly 1,4 butyleneterephthalate
poly (69/31 ethylene/cyclohexylenedimethylene terephthalate)
poly (96.5/3.5 ethylene/cyclohexylenedimethylene terephthalate)
poly (98.5/1.5 ethylene/cyclohexylenedimethylene terephthalate)

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poly(ethyleneoxy)glycerol
poly(propylene)glycol
poly(propylene/ethylene)glycol
poly(propyleneoxy)glycerol
poly(propyleneoxy)sucrose
poly(propyleneoxy/ethyleneoxy)benzenediamine
poly(propyleneoxy/ethyleneoxy)diamine
poly(propyleneoxy/ethyleneoxy)glycerol
poly(propyleneoxy/ethyleneoxy)sucrose
polyalphaolefins
polybutene
polybutylene
polybutylene/ethylene
polycarbonate
polyethylene terephthalate pellets
propanol
sodium nitriolotriacetate monohydrate
synthetic linear fatty alcohols
synthetic linear fatty alcohol ethoxylates
terephthalic acid
tetrabromobisphenol-A
tetrachlorophthalic anhydride
tetrahydrofuran

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texanol benzyl phthalate
toluene diisocyanate
toluenediamine
trichloroethylene
triethanolamine
triisopropanolamine
trimethylolpropane
vinyl acetate
SECTION 5. PETITIONS TO MODIFY THE LIST OF TAXABLE SUBSTANCES

Notice 89-61, issued when the Superfund chemical taxes were previously in
effect, prescribes the process under section 4672(a)(2) by which importers or exporters
may request a determination that the list of taxable substances be modified by either
adding or removing a substance. The Treasury Department and the IRS intend to
update Notice 89-61 to reflect the changes made to section 4672(a)(2) by the IIJA, and
to make other changes that may be necessary. Accordingly, Notice 89-61 is suspended
pending the issuance of additional guidance. See IRM 32.2.2.8.1, para. 9 (Aug. 11,
2004) (providing that previously published guidance can be suspended in rare situations
“to show that previously published guidance will not be applied pending some future
action, such as the issuance of new or amended regulations”).
SECTION 6. REGISTRATION FOR CERTAIN EXCEPTIONS

Section 4662(b)(10)(A) provides that no tax is imposed on any organic taxable
chemical while the chemical is part of an intermediate hydrocarbon stream containing
one or more organic taxable chemicals. Section 4662(b)(10)(C) provides that the

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exception in section 4662(b)(10)(A) does not apply to the sale of any intermediate
hydrocarbon stream unless the registration requirements of section 4662(c)(2)(B) are
satisfied.
Section 4662(c)(2)(A) provides that no tax is imposed on inventory exchanges of
taxable chemicals. Section 4662(c)(2)(B) provides that the exception in section
4662(c)(2)(A) does not apply to any inventory exchange unless the registration
requirements of section 4662(c)(2)(B) are satisfied.
The registration requirements of section 4662(c)(2)(B) are not satisfied unless
(i) both parties are registered by the IRS as manufacturers, producers, or importers of
taxable chemicals; and (ii) the person receiving the taxable chemical has notified the
manufacturer, producer, or importer of such person’s registration number.
Application for section 4662(b)(10)(C) intermediate hydrocarbon stream
registration and section 4662(c)(2)(B) inventory exchange registration must be made on
Form 637, Application for Registration (For Certain Excise Tax Activities), under Activity
Letter “G” (persons making inventory exchanges of taxable chemicals under section
4662(c)(2) or persons selling or buying intermediate hydrocarbon streams under section
4662(b)(10)) in accordance with the instructions for that form. The IRS is revising
Form 637 to add Activity Letter G. Until the revised Form 637 is released, applicants
may use the current Form 637 by writing in Activity Letter G and providing the following
information: (i) a list of the taxable chemicals the applicant exchanges and/or the
intermediate hydrocarbon streams the applicant sells or buys; and (ii) a description of
the applicant’s processing plants, the products produced, the handling and storage
facilities, and the processes involving hydrocarbon streams, as applicable.

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SECTION 7. APPLICABLE PROCEDURAL RULES
The Superfund chemical taxes are part of Subtitle D, chapter 38 of the Code.
Accordingly, the procedural rules in 26 C.F.R. part 40 regarding filing, deposits, etc.,
apply to persons subject to the reinstated Superfund chemical taxes. Such persons
must report the reinstated Superfund chemical taxes on Form 6627, Environmental
Taxes, which is attached to Form 720, Quarterly Federal Excise Tax Return.
SECTION 8. REQUEST FOR COMMENTS
The Treasury Department and the IRS request comments on whether any issues
related to the reinstated Superfund chemical taxes require clarification or additional
guidance. Comments should be submitted in writing by January 28, 2022, and should
include a reference to Notice 2021-66. Comments may be submitted electronically via
the Federal Rulemaking Portal at www.regulations.gov (type IRS-2021-0018 or Notice
2021-66 in the search field on the regulations.gov homepage to find this notice and
submit comments). Alternatively, comments may be mailed to: Internal Revenue
Service, Attn: CC:PA:LPD:PR (Notice 2021-66), Room 5203, P.O. Box 7604, Ben
Franklin Station, Washington D.C. 20044. All commenters are strongly encouraged to
submit public comments electronically. The IRS expects to have limited personnel
available to process public comments that are submitted on paper through mail. Until
further notice, any comments submitted on paper will be considered to the extent
practicable. The Treasury Department and the IRS will publish for public availability any

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comment submitted electronically, and, to the extent practicable, on paper, to its public
docket.
SECTION 9. EFFECT ON OTHER DOCUMENTS
Notice 89-61 is suspended.
SECTION 10. PAPERWORK REDUCTION ACT
Section 6 of this notice sets forth a collection of information to be provided to the
IRS with Form 637. This collection of information will be reflected in the submission to
the Office of Management and Budget (OMB) for review in accordance with the
Paperwork Reduction Act (44 U.S.C. 3507(c)) that is associated with Form 637 (OMB
control number 1545-1835). This submission will be updated in the ordinary course. An
agency may not conduct or sponsor, and a person is not required to respond to, a
collection of information unless the collection of information displays a valid OMB
control number.
SECTION 11. DRAFTING INFORMATION
The principal authors of this notice are Stephanie Bland, Amanda Dunlap, and
Natalie Payne of the Office of Associate Chief Counsel (Passthroughs & Special
Industries). For questions regarding the registration process, contact Diane M. Williams
at (856) 792-9362. For all other questions regarding this notice, contact Ms. Payne at
(202) 317-6855.