Bergeson & Campbell, P.C. (B&C®) is a Washington, D.C. law firm providing chemical and chemical product stakeholders unparalleled experience, judgment, and excellence in matters relating to TSCA, and other global chemical management programs.

By Lynn L. Bergeson and Carla N. Hutton
 
The Internal Revenue Service (IRS) announced on December 30, 2022, that it received a petition requesting the addition of polyphenylene sulfide to the list of taxable substances under Section 4672(a) of the Internal Revenue Code. 87 Fed. Reg. 80579. The petitioner is Celanese Ltd., an exporter of polyphenylene sulfide. According to the petition, “polyphenylene sulfide is a high-performance thermoplastic, has high heat and chemical resistance, and is used in applications such as filters, appliance, machine and automobile parts, replacing steel in some cases.” Polyphenylene sulfide is manufactured by the polymerization of 1,4-dichlorobenzene (p-DCB), a taxable substance, with sodium hydrosulfide and sodium hydroxide. Sodium hydrosulfide is made from sodium hydroxide and hydrogen sulfide. Taxable chemicals constitute 90.0 percent by weight of the materials used to produce this substance. Comments and requests for a public hearing are due February 28, 2023. More information on the Superfund excise tax on chemicals is available in 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.”


 

By Lynn L. Bergeson and Carla N. Hutton
 
The Internal Revenue Service (IRS) announced on December 28, 2022, that it received a petition requesting the addition of polyoxymethylene to the list of taxable substances under Section 4672(a) of the Internal Revenue Code. 87 Fed. Reg. 79938. The petitioner is Celanese Ltd., an exporter of polyoxymethylene. According to the petition, “polyoxymethylene is an engineering thermoplastic used in precision parts requiring high stiffness, low friction, and excellent dimensional stability. It is widely used in the automotive and consumer electronics industry as well as many other high-performance uses.” Polyoxymethylene is made from methane and is manufactured through the polymerization of formaldehyde, and taxable chemicals constitute 50.0 percent by weight of the materials used to produce it. Comments and requests for a public hearing are due February 27, 2023. More information on the Superfund excise tax on chemicals is available in 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.”


 

By Lynn L. Bergeson and Carla N. Hutton

The Internal Revenue Service announced on June 24, 2022, that it has posted frequently asked questions (FAQ) on the Superfund chemical excise tax. The FAQs detail what the Superfund chemical excise tax is, how the tax is computed, and who may be liable for the tax. The Superfund chemical taxes will be reported on Form 720, Quarterly Federal Excise Tax Return, and Form 6627, Environmental Taxes. The excise taxes were reinstated beginning on July 1, 2022, under the Infrastructure Investment and Jobs Act. The IRS notes that there are two separate Superfund chemical excise taxes: a tax on the sale or use of “taxable chemicals” and a tax on the sale or use of imported “taxable substances.” Specifically, the reinstated taxes impose an excise tax on the sale or use of a taxable chemical by the manufacturer, producer, or importer of the taxable chemical. They also impose an excise tax on the sale or use of a taxable substance by the importer of the taxable substance. The IRS states that the FAQs provide general information. According to the IRS, at the time of publication of these FAQs, 151 substances are listed as taxable substances. The IRS states “[t]hat number will likely change as substances are added to or removed from the list of taxable substances.” The FAQs added June 24, 2022, include:

Q1.      What are the Superfund chemical excise taxes?

Q2.      When do the Superfund chemical excise taxes go into effect?

Q3.      What is a taxable chemical?

Q4.      What is a taxable substance?

Q5.      How are substances added to or removed from the list of taxable substances?

Q6.      How do I calculate the section 4661 tax?

Q7.      I am an importer of taxable substances. How do I calculate the section 4671 tax?

Q8.      What happens if an importer does not calculate the section 4671 tax?

Q9.      Will the IRS prescribe tax rates for taxable substances?

Q10.    Who is responsible for reporting and paying Superfund chemical excise taxes?

Q11.    How are the Superfund chemical excise taxes reported?

Q12.    When is the first return due?

Q13.    Are semimonthly deposits required?

Q14.    Under what circumstances is registration required?

Q15.    Is there a way to check the status of an application for Activity Letter G registration?

More information on the Superfund excise tax on certain chemical substances is available in our May 19, 2022, memorandum.

Tags: IRS, Superfund, tax

 

By Lynn L. Bergeson and Margaret R. Graham

On July 24, 2018, the U.S. Environmental Protection Agency (EPA) announced it was extending the comment periods for all ten problem formulation documents and the systematic review approach document in Toxic Substances Control Act (TSCA) risk evaluations that were published on June 11, 2018, by 21 days;  comments on these documents are now due by August 16, 2018.  EPA states that although the comment period will end in 21 days (August 16, 2018), “EPA will try to consider any additional comments received after this date.  However, incorporation of late comments may not be included in the documents for peer review.  There will be an additional comment period following the publication of each of the draft risk evaluations.”

Links to the problem formulation dockets are available in our blog item “EPA Releases Problem Formulations Documents on First Ten Chemicals; Systematic Review Approach Document; and Asbestos SNUR” and a more detailed analysis is available in our memorandum “EPA Takes ‘Three Important Steps’ Intended to Ensure Chemical Safety.”


 

By Lynn L. Bergeson and Margaret R. Graham

On June 1, 2018, the U.S. Environmental Protection Agency (EPA) released the much anticipated first ten problem formulation documents; its systematic review approach document; and a significant new use rule (SNUR) proposal enabling it to prevent new uses of asbestos for public comment.  Links and short summaries are provided below.

EPA states that the problem formulation documents refine the conditions of use, exposures, and hazards presented in the scope of the risk evaluations for the first ten chemicals to be evaluated under the Toxic Substances Control Act (TSCA) and present refined conceptual models and analysis plans that describe how EPA expects to evaluate the risks and that they are an important interim step prior to completing and publishing the final risk evaluations by December 2019.  Comments on the problem formulation documents will be due 45 days after these documents are published in the Federal Register.  The problem formulation documents are:

  1. Asbestos
  2. 1-Bromopropane (1-BP);
  3. Carbon Tetrachloride;
  4. 1,4-Dioxane;
  5. Cyclic Aliphatic Bromide Cluster (HBCD Cluster);
  6. Methylene Chloride;
  7. N-Methylpyrrolidone (NMP);
  8. Perchloroethylene;
  9. Pigment Violet 29; and
  10. Trichloroethylene (TCE).

EPA states the systematic review approach document will guide its selection and review of studies in addition to providing the public with continued transparency regarding how the Agency plans to evaluate scientific information.  Comments will be due 45 days after publication in the Federal Register.  Also included on the systematic review web page is EPA’s Response to Public Comments Related to the Supplemental Files Supporting the TSCA Scope Documents for the First Ten Risk Evaluations.  

For asbestos, EPA is proposing an asbestos SNUR for certain uses of asbestos (including asbestos-containing goods) that would require manufacturers and importers to receive EPA approval before starting or resuming manufacturing, and importing or processing of asbestos.  EPA states that this review process, the first such action on asbestos ever proposed, would provide EPA with the opportunity to evaluate the intended use of asbestos and, when necessary, take action to prohibit or limit the use.  Comments will be due 60 days after publication in the Federal Register.

More information on the first ten chemical evaluations is available on our blog.  A more detailed analysis will be available next week on our regulatory developments webpage.


 

By Lynn L. Bergeson, Christopher R. Bryant, and Margaret R. Graham

U.S. Senate Minority Leader Charles E. Schumer (D-NY) on March 20, 2018, announced that, after his intervention, representatives from the U.S. Occupational Safety and Health Administration (OSHA), the U.S. Environmental Protection Agency (EPA), and the Department of Homeland Security (DHS) are working to create new protocols for communicating and training with local governments and first responders.  OSHA, EPA and DHS will convene the Chemical Facility Security and Safety Working Group (Working Group), which will coordinate strategies, activities, policies, and communication to address concerns that there should be an immediate and more thorough improvement of OSHA’s coordination and communication systems to local municipalities and their respective stakeholders.  Specifically, the Working Group is moving forward with a new partnership between the agencies regarding the coordination of communication between state and local governments when there is a serious violation cited.  The protocol will address the lack of communication with local first responders, safety and training agreements, and coordination on information sharing about all the relevant agencies when a local company is cited for serious violations -- like the reported mishandling of Verla International’s (Verla) use of flammable liquids.  

The new protocol is intended to ensure that emergency response agencies are notified when a facility receives a serious health or environmental violation, so that they can proactively prevent accidents and prepare to respond when accidents and fires occur.  Specifically, the Working Group is tasked with:

  • Developing appropriate means for sharing information with first responders to enhance their ability to safely and effectively plan for and respond to incidents in their jurisdiction;
  • Developing tools, training, and resources to strengthen State Emergency Response Commissions and Local Emergency Planning Committees;
  • Coordinating with agencies beyond DHS, EPA, and OSHA by working with the U.S. Department of Justice, the U.S. Department of Transportation, and, in this instance, the U.S. Food and Drug Administration, as appropriate, to address incidents involving hazardous materials and the effects these incidents have on workers and communities;
  • Coordinating information sharing across the interagency community and with state, local, tribal, territorial, and private sector partners; and
  • Leveraging limited resources across all levels of government by conducting and facilitating cross-training to raise awareness of other programs.

In April 2017, OSHA cited Verla’s cosmetic factory in New Windsor, New York for improper storage of flammable liquids that resulted in several serious violations, and in November 2017 there was an explosion and fire at the factory where one worker was killed and 40 people, including seven firefighters, were injured -- a tragedy that may have been avoided had the first responders been notified of the violations and known better how to handle the situation.  Senator’s Schumer’s concerns about the lack of communication and notification stem from these events.  He states the new protocols “will provide technical expertise and tighter coordination with federal and regional first responder operations to try to make sure the lack of communication and awareness of preexisting issues faced by first responders back in November is a thing of the past.”


 

By Lynn L. Bergeson

As required by the amended Toxic Substances Control Act (TSCA), on June 22, 2017, one year after passage of the Frank R. Lautenberg Chemical Safety for the 21st Century Act, the U.S. Environmental Protection Agency (EPA) has issued the three framework rules in final.  EPA also released draft guidance to assist in developing and submitting draft risk evaluations.  The final rules are:

  1. Procedures for Chemical Risk Evaluation;
  2. Procedures for Prioritization of Chemicals for Risk Evaluation; and
  3. TSCA Inventory Notification (Active-Inactive) Requirements

EPA also released scoping documents of the risk evaluations and supplemental resources on the first ten chemicals under amended TSCA, as it stipulated in its annual report on risk evaluations.  Links to the scoping documents for these ten chemicals, as well as strategies for conducting literature searches, are below:

  1. 1, 4-Dioxane;
  2. Methylene Chloride;
  3. 1-Bromopropane;
  4. N-Methylpyrolidone (NMP);
  5. Asbestos;
  6. Pigment Violet 29;
  7. Carbon Tetrachloride;
  8. Trichloroethylene;
  9. Cyclic Aliphatic Bromide Cluster (HBCD); and
  10. Tetrachloroethylene (perchloroethylene).

Administrator Scott Pruitt signed them and they were released to the general public shortly thereafter.  They are expected to be effective 60 days after publication in the Federal Register.  Bergeson & Campbell, P.C. (B&C®) will provide feedback on the final rules in upcoming memoranda on each final rule, as well as a memorandum on the draft guidance on developing risk evaluations.  Please look for these memoranda on our website under “Regulatory Developments.”