Superfund excise tax expected to add a half cent per pound to resin prices

From “IRS provides guidance for how excise taxes will impact resin pricing” (Plastics News)

The IRS has provided data on federal Superfund excise taxes, which started hitting hit resin buyers’ invoices July 1.

The net result for many plastics processors likely will be higher prices — close to half a cent per pound on some resins — since resin makers and suppliers are likely to pass the cost of the taxes on to their customers.

Resins on the taxable list include polyethylene, polypropylene, homopolymer polystyrene, PVC, polybutadiene, synthetic rubber, phenolics and melamine.

The Infrastructure Investment & Jobs Act, which was passed in November, reinstated those taxes effective July 1. They had expired in 1995.

In addition to the reinstatement of the taxes, the bill doubled the prior tax rate on 42 listed chemicals. This effectively doubled the tax rate of the imported taxable substances as well.

The tax directly applies to feedstocks. Common plastics feedstocks ethylene and propylene are taxed at $9.74 per ton, or 0.487 cents per pound (less than a half cent). The tax rate for related substances is dependent on individual chemical composition. For example, a PP resin, if made of 50 percent propylene, would be taxed at half that rate, or 0.22 cents per pound.

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