§4662 — Title 26 Internal Revenue Code | U.S. Code

Summary

Imposes a tax on certain chemicals that are listed under section 4661(b) when they are made in the United States or brought into the United States for use, sale, or storage. Key words: "taxable chemical" — a substance on the 4661(b) list made or imported into the U.S.; "United States" — as defined in section 4612(a)(4); "importer" — the person who brings the chemical into the U.S.; "ton" — 2,000 pounds (for gases, the amount that equals 2,000 pounds by molecular weight); fractional tons are taxed proportionally. If a manufacturer, producer, or importer uses a taxable chemical instead of selling it, that person must pay the tax as if it were sold. When two companies swap inventory, the swap is not a sale only if both are registered as manufacturers/producers/importers and the receiver gives the sender its registration number and district. Lists many exceptions and special rules where the tax does not apply. Methane or butane are taxed only when they are used for something other than fuel or making motor/diesel/aviation/jet fuel. Nitric acid, sulfuric acid, ammonia, and methane used to make ammonia are not taxed when used as qualified fertilizer or animal feed ingredients, or when used to make those products; similar rules apply for certain chemicals when used to make or as qualified fuels (qualified fuel chemicals include acetylene, benzene, butylene, butadiene, ethylene, naphthalene, propylene, toluene, and xylene). Sulfuric acid made only as a byproduct at the same site as air pollution control equipment is exempt. Substances made from coal are not taxable. Certain chemicals present only briefly during smelting or refining (and listed metals or their solutions) are not taxed while they are part of the process. Xylene normally excludes separated isomers except for imports/exports. Chromium, cobalt, or nickel recovered from solid waste for recycling in the U.S. are exempt unless required cleanup at the recycling site is unfinished; groundwater cleanup can be treated as complete after a 10-year period if it meets the permit. Organic taxable chemicals in an intermediate hydrocarbon stream are not taxed while in the stream, but removing one is treated as a use and makes the remover the manufacturer. Exports are generally not taxed, and rules allow credits or refunds for taxes paid on exported chemicals under conditions that protect exporters and require proof or waivers. The Treasury Secretary must issue detailed rules to carry out these points. Finally, subsections (a)(3) and (b)(3) of section 7652 do not apply to taxes under section 4661.

Title 26, §4662

Internal Revenue Code — Source: USLM XML via OLRC

(a)For purposes of this subchapter—

(1)Except as provided in subsection (b), the term “taxable chemical” means any substance—

(A)which is listed in the table under section 4661(b), and

(B)which is manufactured or produced in the United States or entered into the United States for consumption, use, or warehousing.

(2)The term “United States” has the meaning given such term by section 4612(a)(4).

(3)The term “importer” means the person entering the taxable chemical for consumption, use, or warehousing.

(4)The term “ton” means 2,000 pounds. In the case of any taxable chemical which is a gas, the term “ton” means the amount of such gas in cubic feet which is the equivalent of 2,000 pounds on a molecular weight basis.

(5)In the case of a fraction of a ton, the tax imposed by section 4661 shall be the same fraction of the amount of such tax imposed on a whole ton.

(b)For purposes of this subchapter—

(1)Under regulations prescribed by the Secretary, methane or butane shall be treated as a taxable chemical only if it is used otherwise than as a fuel or in the manufacture or production of any motor fuel, diesel fuel, aviation fuel, or jet fuel (and, for purposes of section 4661(a), the person so using it shall be treated as the manufacturer thereof).

(2)(A)In the case of nitric acid, sulfuric acid, ammonia, or methane used to produce ammonia which is a qualified fertilizer substance, no tax shall be imposed under section 4661(a).

(B)For purposes of this section, the term “qualified fertilizer substance” means any substance—

(i)used in a qualified fertilizer use by the manufacturer, producer, or importer,

(ii)sold for use by any purchaser in a qualified fertilizer use, or

(iii)sold for resale by any purchaser for use, or resale for ultimate use, in a qualified fertilizer use.

(C)The term “qualified fertilizer use” means any use in the manufacture or production of fertilizer or for direct application as a fertilizer.

(D)For purposes of section 4661(a), if no tax was imposed by such section on the sale or use of any chemical by reason of subparagraph (A), the first person who sells or uses such chemical other than in a sale or use described in subparagraph (A) shall be treated as the manufacturer of such chemical.

(3)In the case of sulfuric acid produced solely as a byproduct of and on the same site as air pollution control equipment, no tax shall be imposed under section 4661.

(4)For purposes of this subchapter, the term “taxable chemical” shall not include any substance to the extent derived from coal.

(5)(A)In the case of any chemical described in subparagraph (D) which is a qualified fuel substance, no tax shall be imposed under section 4661(a).

(B)For purposes of this section, the term “qualified fuel substance” means any substance—

(i)used in a qualified fuel use by the manufacturer, producer, or importer,

(ii)sold for use by any purchaser in a qualified fuel use, or

(iii)sold for resale by any purchaser for use, or resale for ultimate use, in a qualified fuel use.

(C)For purposes of this subsection, the term “qualified fuel use” means—

(i)any use in the manufacture or production of any motor fuel, diesel fuel, aviation fuel, or jet fuel, or

(ii)any use as such a fuel.

(D)For purposes of this subsection, the chemicals described in this subparagraph are acetylene, benzene, butylene, butadiene, ethylene, naphthalene, propylene, toluene, and xylene.

(E)For purposes of section 4661(a), if no tax was imposed by such section on the sale or use of any chemical by reason of subparagraph (A), the first person who sells or uses such chemical other than in a sale or use described in subparagraph (A) shall be treated as the manufacturer of such chemical.

(6)(A)No tax shall be imposed under section 4661(a) on any taxable chemical described in subparagraph (B) by reason of the transitory presence of such chemical during any process of smelting, refining, or otherwise extracting any substance not subject to tax under section 4661(a).

(B)The chemicals described in this subparagraph are—

(i)barium sulfide, cupric sulfate, cupric oxide, cuprous oxide, lead oxide, zinc chloride, and zinc sulfate, and

(ii)any solution or mixture containing any chemical described in clause (i).

(C)Nothing in subparagraph (A) shall be construed to apply to any chemical which is removed from or ceases to be part of any smelting, refining, or other extraction process.

(7)Except in the case of any substance imported into the United States or exported from the United States, the term “xylene” does not include any separated isomer of xylene.

(8)(A)No tax shall be imposed under section 4661(a) on any chromium, cobalt, or nickel which is diverted or recovered in the United States from any solid waste as part of a recycling process (and not as part of the original manufacturing or production process).

(B)Subparagraph (A) shall not apply during any period that required corrective action by the taxpayer at the unit at which the recycling occurs is uncompleted.

(C)For purposes of subparagraph (B), required corrective action shall be treated as uncompleted during the period—

(i)beginning on the date that the corrective action is required by the Administrator or an authorized State pursuant to—

(I)a final permit under section 3005 of the Solid Waste Disposal Act or a final order under section 3004 or 3008 of such Act, or

(II)a final order under section 106 of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, and

(ii)ending on the date the Administrator or such State (as the case may be) certifies to the Secretary that such corrective action has been completed.

(D)In the case of corrective action requiring groundwater treatment, such action shall be treated as completed as of the close of the 10-year period beginning on the date such action is required if such treatment complies with the permit or order applicable under subparagraph (C)(i) throughout such period. The preceding sentence shall cease to apply beginning on the date such treatment ceases to comply with such permit or order.

(E)For purposes of this paragraph, the term “solid waste” has the meaning given such term by section 1004 of the Solid Waste Disposal Act, except that such term shall not include any byproduct, coproduct, or other waste from any process of smelting, refining, or otherwise extracting any metal.

(9)(A)In the case of—

(i)nitric acid,

(ii)sulfuric acid,

(iii)ammonia, or

(iv)methane used to produce ammonia,

(B)For purposes of this section, the term “qualified animal feed substance” means any substance—

(i)used in a qualified animal feed use by the manufacturer, producer, or importer,

(ii)sold for use by any purchaser in a qualified animal feed use, or

(iii)sold for resale by any purchaser for use, or resale for ultimate use, in a qualified animal feed use.

(C)The term “qualified animal feed use” means any use in the manufacture or production of animal feed or animal feed supplements, or of ingredients used in animal feed or animal feed supplements.

(D)For purposes of section 4661(a), if no tax was imposed by such section on the sale or use of any chemical by reason of subparagraph (A), the 1st person who sells or uses such chemical other than in a sale or use described in subparagraph (A) shall be treated as the manufacturer of such chemical.

(10)(A)No tax shall be imposed under section 4661(a) on any organic taxable chemical while such chemical is part of an intermediate hydrocarbon stream containing one or more organic taxable chemicals.

(B)For purposes of this part, if any organic taxable chemical on which no tax was imposed by reason of subparagraph (A) is isolated, extracted, or otherwise removed from, or ceases to be part of, an intermediate hydrocarbon stream—

(i)such isolation, extraction, removal, or cessation shall be treated as use by the person causing such event, and

(ii)such person shall be treated as the manufacturer of such chemical.

(C)Subparagraph (A) shall not apply to any sale of any intermediate hydrocarbon stream unless the registration requirements of clauses (i) and (ii) of subsection (c)(2)(B) are satisfied.

(D)For purposes of this paragraph, the term “organic taxable chemical” means any taxable chemical which is an organic substance.

(c)(1)Except as provided in subsections (b) and (e), if any person manufactures, produces, or imports any taxable chemical and uses such chemical, then such person shall be liable for tax under section 4661 in the same manner as if such chemical were sold by such person.

(2)(A)Except as provided in this paragraph, in any case in which a manufacturer, producer, or importer of a taxable chemical exchanges such chemical as part of an inventory exchange with another person—

(i)such exchange shall not be treated as a sale, and

(ii)such other person shall, for purposes of section 4661, be treated as the manufacturer, producer, or importer of such chemical.

(B)Subparagraph (A) shall not apply to any inventory exchange unless—

(i)both parties are registered with the Secretary as manufacturers, producers, or importers of taxable chemicals, and

(ii)the person receiving the taxable chemical has, at such time as the Secretary may prescribe, notified the manufacturer, producer, or importer of such person’s registration number and the internal revenue district in which such person is registered.

(C)For purposes of this paragraph, the term “inventory exchange” means any exchange in which 2 persons exchange property which is, in the hands of each person, property described in section 1221(a)(1).

(d)(1)Under regulations prescribed by the Secretary, if—

(A)a tax under section 4661 was paid with respect to any taxable chemical, and

(B)such chemical was used by any person in the manufacture or production of any other substance which is a taxable chemical,

(2)Under regulations prescribed by the Secretary, if—

(A)a tax under section 4661 was paid with respect to nitric acid, sulfuric acid, ammonia, or methane used to make ammonia without regard to subsection (b)(2), and

(B)any person uses such substance as a qualified fertilizer substance,

(3)Under regulations prescribed by the Secretary, if—

(A)a tax under section 4661 was paid with respect to any chemical described in subparagraph (D) of subsection (b)(5) without regard to subsection (b)(5), and

(B)any person uses such chemical as a qualified fuel substance,

(4)Under regulations prescribed by the Secretary, if—

(A)a tax under section 4661 was paid with respect to nitric acid, sulfuric acid, ammonia, or methane used to produce ammonia, without regard to subsection (b)(9), and

(B)any person uses such substance as a qualified animal feed substance,

(e)(1)(A)No tax shall be imposed under section 4661 on the sale by the manufacturer or producer of any taxable chemical for export, or for resale by the purchaser to a second purchaser for export.

(B)Rules similar to the rules of section 4221(b) shall apply for purposes of subparagraph (A).

(2)(A)Except as provided in subparagraph (B), if—

(i)tax under section 4661 was paid with respect to any taxable chemical, and

(ii)(I)such chemical was exported by any person, or

(II)such chemical was used as a material in the manufacture or production of a substance which was exported by any person and which, at the time of export, was a taxable substance (as defined in section 4672(a)),

(B)No credit or refund shall be allowed or made under subparagraph (A) unless the person who paid the tax establishes that he—

(i)has repaid or agreed to repay the amount of the tax to the person who exported the taxable chemical or taxable substance (as so defined), or

(ii)has obtained the written consent of such exporter to the allowance of the credit or the making of the refund.

(3)The Secretary shall provide, in regulations, the circumstances under which a credit or refund (without interest) of the tax under section 4661 shall be allowed or made to the person who exported the taxable chemical or taxable substance, where—

(A)the person who paid the tax waives his claim to the amount of such credit or refund, and

(B)the person exporting the taxable chemical or taxable substance provides such information as the Secretary may require in such regulations.

(4)The Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this subsection.

(f)The provisions of subsections (a)(3) and (b)(3) of section 7652 shall not apply to any tax imposed by section 4661.

Notes & Related Subsidiaries

Editorial Notes

References in Text

section 3005, 3004, and 3008 of the Solid Waste Disposal Act, referred to in subsec. (b)(8)(C)(i)(I), and section 1004 of that Act, referred to in subsec. (b)(8)(E), are classified to section 6925, 6924, 6928, and 6903, respectively, of Title 42, The Public Health and Welfare. section 106 of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, referred to in subsec. (b)(8)(C)(i)(II), is classified to section 9606 of Title 42.

Amendments

1999—Subsec. (c)(2)(C). Pub. L. 106–170 substituted “section 1221(a)(1)” for “section 1221(1)”. 1988—Subsec. (b)(10)(A). Pub. L. 100–647, § 2001(a)(2), substituted “one or more” for “a mixture of”. Subsec. (e)(3), (4). Pub. L. 100–647, § 2001(a)(1), added par. (3) and redesignated former par. (3) as (4). 1986—Subsec. (b)(7). Pub. L. 99–499, § 513(c), added par. (7). Subsec. (b)(8). Pub. L. 99–499, § 513(d), added par. (8). Subsec. (b)(9). Pub. L. 99–499, § 513(e)(1), added par. (9). Subsec. (b)(10). Pub. L. 99–499, § 513(g), added par. (10). Subsec. (c). Pub. L. 99–499, § 513(f), amended subsec. (c) generally. Prior to amendment, subsec. (c) read as follows: “Except as provided in subsection (b), if any person manufactures, produces, or imports a taxable chemical and uses such chemical, then such person shall be liable for tax under section 4661 in the same manner as if such chemical were sold by such person.” Subsec. (d)(1). Pub. L. 99–499, § 513(b)(2), substituted “which is a taxable chemical” for “the sale of which by such person would be taxable under such section”, in subpar. (B), and substituted “imposed by such section on the other substance manufactured or produced (or which would have been imposed by such section on such other substance but for subsection (b) or (e) of this section)” for “imposed by such section on the other substance manufactured or produced” in last sentence. Subsec. (d)(4). Pub. L. 99–499, § 513(e)(2), added par. (4). Subsecs. (e), (f). Pub. L. 99–499, § 513(b)(1), added subsec. (e) and redesignated former subsec. (e) as (f). 1984—Subsec. (b)(1). Pub. L. 98–369, § 1019(a)(3), inserted “or in the manufacture or production of any motor fuel, diesel fuel, aviation fuel, or jet fuel”. Subsec. (b)(2)(A). Pub. L. 98–369, § 1019(b)(2)(A), substituted “qualified fertilizer substance” for “qualified substance”. Subsec. (b)(2)(B) to (D). Pub. L. 98–369, § 1019(b)(1), inserted “fertilizer” after “qualified” wherever appearing in subpar. (B), inserted “fertilizer” after “Qualified” in subpar. (C) heading and in text substituted “The term ‘qualified fertilizer use’ means any use in the manufacture or production of fertilizer or for direct application as a fertilizer” for “For purposes of this subsection, the term ‘qualified use’ means any use in the manufacture or production of a fertilizer”, and added subpar. (D). Subsec. (b)(5), (6). Pub. L. 98–369, § 1019(a)(1), added pars. (5) and (6). Subsec. (c). Pub. L. 98–369, § 1019(c), substituted “Except as provided in subsection (b), if” for “If”. Subsec. (d)(2)(B). Pub. L. 98–369, § 1019(b)(2)(B), inserted “fertilizer” after “qualified” and struck out “, or sells such substance for use,” after “such substance”. Subsec. (d)(3). Pub. L. 98–369, § 1019(a)(2), added par. (3).

Statutory Notes and Related Subsidiaries

Effective Date

of 1999 AmendmentAmendment by Pub. L. 106–170 applicable to any instrument held, acquired, or entered into, any transaction entered into, and supplies held or acquired on or after Dec. 17, 1999, see section 532(d) of Pub. L. 106–170, set out as a note under section 170 of this title.

Effective Date

of 1988 AmendmentAmendment by Pub. L. 100–647 effective, except as otherwise provided, as if included in the provision of the Superfund Revenue Act of 1986, Pub. L. 99–499, title V, to which it relates, see section 2001(e) of Pub. L. 100–647, set out as a note under section 56 of this title.

Effective Date

of 1986 AmendmentAmendment by Pub. L. 99–499 effective Jan. 1, 1987, except as otherwise provided, see section 513(h) of Pub. L. 99–499, set out as a note under section 4661 of this title.

Effective Date

of 1984 Amendment Pub. L. 98–369, div. A, title X, § 1019(d), July 18, 1984, 98 Stat. 1024, provided that: “(1) In general.—The

Amendments

made by this section [amending this section] shall take effect as if included in the

Amendments

made by section 211(a) of the Hazardous Substance Response Revenue Act of 1980 [Pub. L. 96–510, which enacted this section]. “(2) Waiver of limitation.—If refund or credit of any overpayment of tax resulting from the application of the

Amendments

made by this section is prevented at any time before the date which for one year after the date of the enactment of this Act [July 18, 1984] by the operation of any law or rule of law (including res judicata), refund or credit of such overpayment (to the extent attributable to the application of such

Amendments

) may, nevertheless, be made or allowed if claim therefor is filed on or before the date which for one year after the date of the enactment of this Act.”

§4662 Definitions and special rules

Summary

Title 26, §4662

Notes & Related Subsidiaries

Editorial Notes

References in Text

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Statutory Notes and Related Subsidiaries

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Citations & Metadata