Sign up for tax alert emails    GTNU homepage    Tax newsroom    Email document    Print document    Download document

January 6, 2022

US IRS lists substances subject to reinstated Superfund excise tax, offers procedural guidance and suspends Notice 89-61

In Notice 2021-66 (released 14 December 2021), the Internal Revenue Service (IRS) provided guidance on Superfund excise taxes, which are reinstated as of 1 July 2022, under the Infrastructure Investment and Jobs Act (IIJA).

Notice 2021-66 does the following:

  • Updates the list of taxable substances under Internal Revenue CodeSection 4672(a), which had expired on 31 December 1995

  • Suspends Notice 89-61, which specified the procedure for requesting the addition or removal of specific chemicals from the list of taxable substances

  • Instructs taxpayers how to furnish sufficient information to the Treasury Secretary (Secretary) to determine the rate of tax applicable to an imported taxable substance

  • Explains IRS Form 637 registration requirements to claim certain exemptions and procedural rules regarding tax forms and deposits

The Notice also requests comments from taxpayers by 28 January 2022, on issues that require clarification or additional guidance. 

Taxable substances

The IIJA instructed the Treasury Department to review and update the list of taxable substances for importers under Section 4672 by 1 January 2022. Notice 2021-66 meets this requirement. In addition to the 50 taxable substances initially listed in Section 4672(a)(3), the Notice published an additional 101 substances that will be taxable if imported into the United States (US) (or credited if exported out of the US).

When updating the list of taxable substances in Notice 2021-66, the IRS applied the IIJA’s 20% threshold for qualifying as a taxable substance (replacing the previous threshold of 50%). Despite this expanded list (attached to this Alert), the importer or exporter of any substance has the burden of requesting a substance’s inclusion or removal from the list. The Secretary then has 180 days to respond.

Tax rate

As specified in Notice 89-61, the 1995 Instructions for Form 6627 included specific rates, per ton, of each taxable substance. To calculate these rates, the IRS and the EPA applied complex formulas that evaluated the molecular weight of each taxable chemical used to produce one ton of a taxable substance. Because the IIJA doubled the tax rate on the initial 42 taxable substances listed in Section 4661, these formulas need to be recalculated to determine the appropriate tax rate per ton for a given taxable substance. Notice 2021-66, however, is silent on the previously determined applicable tax rate per ton for each of the prior taxable substances, suggesting that the default tax calculation will be 10% of the assessed import value.

Section 4672(b)(2) places the burden on the importer to furnish sufficient information to the Secretary to determine whether the imported substance contains more than 20% of a taxable base chemical and if so, what tax rate should be applied to the imported taxable substance. Absent furnishing that information to the Secretary, importers of taxable substances compute the tax at 10% of the substance’s appraised value at the time the substance entered into the US for consumption, use or warehousing (generally the Customs entry value) in accordance with amended Section 4671(b)(2).

Petitions to modify list of taxable substances

Treasury and the IRS intend to update Notice 89-61 to reflect the changes made to Section 4672(a)(2) by the IIJA and any additional guidance that may be issued on procedures for petitioning to add or delete a substance from the list of taxable substances.

Registration for certain exceptions

The IRS is revising Form 637, Application for Registration (For Certain Excise Tax Activities), to add Activity Letter G, which must be used by persons either (1) making inventory exchanges of taxable chemicals under Section 4662(c)(2) or (2) selling or buying intermediate hydrocarbon streams under Section 4662(b)(10). 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: (1) a list of the taxable chemicals the applicant exchanges and/or the intermediate hydrocarbon streams the applicant sells or buys; and (2) a description of the applicant’s processing plants, the products produced, the handling and storage facilities, and the processes involving hydrocarbon streams, as appropriate.

Reporting requirements

Notice 2021-66 confirms that the Superfund taxes will be reported on Form 6627, Environmental Taxes, which is attached to Form 720, Quarterly Federal Excise Tax Return.


Companies that manufacture or produce the listed base chemicals and metals (either directly or as a byproduct of other processes) should begin identifying what sources of information are available (within ERP, purchasing or other systems) to determine the amount of taxable chemicals. For example, many taxpayers purchase or source feedstocks containing multiple chemicals that only become taxable when processed through a reactor or other conversion process that separates the base chemical from the feedstock, compound, gas, petroleum or aggregate.

Companies that import chemical substances should consider analyzing their import data against the lists of taxable substances to determine exposure and compliance obligations. Use of the US Customs Automated Commercial Environment (ACE) database can provide importers with valuable information needed to make these determinations.

Companies that purchase any of the base chemicals or the taxable substances, or products containing either, even if from US sources, should consider analyzing the potential impacts of the tax being incorporated into the price of products and consider how to mitigate, where possible, overall tax exposure. In particular, consideration should be given to non-taxable sales or uses, in particular the exportation of taxable chemicals or taxable substances, even if the party using or exporting the product was not the original taxpayer.

Due to the impending effective date of 1 July 2022, companies should immediately determine impacts to their specific manufacturing and sourcing of the taxable chemicals and substances, consider submitting comments to the IRS in response to Notice 2021-66, and outline specific compliance planning steps to meet the new tax requirements.


For additional information with respect to this Alert, please contact the following:

Ernst & Young LLP (United States), Excise Tax 

Ernst & Young LLP (United States), Global Trade 


Superfund list of substances



  1. All “Section” references are to the Internal Revenue Code of 1986, and the regulations promulgated thereunder.

The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.


Copyright © 2024, Ernst & Young LLP.


All rights reserved. No part of this document may be reproduced, retransmitted or otherwise redistributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, or using any information storage and retrieval system, without written permission from Ernst & Young LLP.


Any U.S. tax advice contained herein was not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.


"EY" refers to the global organisation, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.


Privacy  |  Cookies  |  BCR  |  Legal  |  Global Code of Conduct Opt out of all email from EY Global Limited.


Cookie Settings

This site uses cookies to provide you with a personalized browsing experience and allows us to understand more about you. More information on the cookies we use can be found here. By clicking 'Yes, I accept' you agree and consent to our use of cookies. More information on what these cookies are and how we use them, including how you can manage them, is outlined in our Privacy Notice. Please note that your decision to decline the use of cookies is limited to this site only, and not in relation to other EY sites or Please refer to the privacy notice/policy on these sites for more information.

Yes, I accept         Find out more