The Superfund Tax is a lot like the movie Top Gun. Both originated in the 1980's before going dormant for a while. Both had lasting impacts on life in the US. And both came back in 2022.
Included in the 1980 Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) and re-authorized in the SARA amendments of 1986, “Superfund” would become the nickname for the law it is a part of.
A “Superfund site” is a location contaminated with hazardous substances that the government plans to restore. Including new Superfund sites added in 2022, there are about 1,330 “uncontrolled hazardous waste sites” on the National Priorities List (NPL)—a list of sites prioritized for longer-term action due to contamination with hazardous substances.
Superfund cleanup efforts involve activities like removal of toxic soil, sampling and testing of air and water, and transportation of abandoned chemicals for proper disposal. Site workers that perform these duties must be trained extensively and outfitted with adequate personal protective equipment for the hazardous atmospheres and substances they face.
In short, Superfund cleanups cost a lot of money.
Superfund: The Plan to Pay for It
When Congress created it in 1980, the “Superfund” was a plan to cover the costs of cleaning up these “uncontrolled hazardous waste sites.” The fund's full name was the Hazardous Substance Response Trust Fund.
The “fund” in Superfund refers to money raised via two taxes: One tax on the sale of specific “taxable chemicals” and another tax on the sale or use of imported “taxable substances.”
“You’ve lost that loving feeling…”
The Superfund Tax expired at the end of 1995, when Congress allowed it to lapse.
Top Gun left theaters in 1986, was released on home video, and left a lasting impact on US culture. Bomber jackets and aviator sunglasses became cool, and Navy recruitment got a modest boost.
Superfund had lasting impacts, too. While the tax itself was defunct after 1995, cleanup and remediation work continued. Funds to pay for it came from the budget that Congress appropriated to EPA each year.
In 2021, in the Infrastructure Investment and Jobs Act, Congress directed the IRS to resume the practice of collecting a tax on the sale of certain chemicals. The Superfund Tax was officially re-enacted as of July 1, 2022.
Superfund Tax: Updated for 2022
Top Gun: Maverick shares a title and star with the 1986 original, but it’s not an exact replica. We meet a new crop of hot-shot fighter pilots, for example, and Maverick is older and wiser.
The Superfund Tax is not the same as it was back then, either. The applicable tax rates have changed, for example, and there are expanded criteria for determining if an imported substance is taxable.
Taxable chemicals under Superfund include benzene, butadiene, ethylene, methane, propylene, toluene, chromium, hydrochloric acid, hydrogen fluoride, sulfuric acid, sodium hydroxide, nitric acid, and dozens of others [26 U.S.C. 4661(b)(i) and (ii)].
An imported substance is a "taxable substance" if, at the time of sale or use by the importer, taxable chemicals constitute more than 20 percent (by weight or value) of the materials used to produce the substance, or if the substance is listed [26 USC 4672(a)(2)].
A Frequently Asked Questions (FAQ) page about the Superfund Excise Tax is available from the Internal Revenue Service: FAQ: IRS Issues Superfund Chemical Excise Taxes
What About Results?
We don't have official figures on the value of taxes deposited since the "new" Superfund Tax took effect on July 1, 2022. What we know from EPA's annual enforcement report is this: The agency secured $575 million in financial commitments to fund cleanup projects and recover prior cleanup costs under CERCLA/Superfund in FY 2022.
Top Gun: Maverick (2022), meanwhile, cost a reported $170 million to produce. It pulled in $718 million in US box office receipts and grossed about $1.5 billion worldwide.
Recent Petitions to Add Polyoxymethylene and Polyphenylene Sulfide To IRS Taxable Substances List
In 2022, IRS received petitions to add polyoxymethylene and polyphenylene sulfide to the list of taxable hazardous substances.
Questions About CERCLA/Superfund Compliance?
Uncover your facility's responsibilities for reporting, recordkeeping, and contingency planning under EPA programs like CERCLA/Superfund, EPCRA/Right-to-Know, the Clean Air and Clean Waters Acts, TSCA, and more when Lion presents the Complete Environmental Regulations Webinar on February 2–3, 2023.
For help with compliance, browse EH&S consulting solutions to put Lion's decades of regulatory expertise to work for you. We can help you to determine applicability of specific rules or identify your responsibilities under laws like CERCLA/Superfund and many others.