Motor Fuels Tax Minute, Episode 8

We continue to discuss the Inflation Reduction Act this week. Join our MFT team for an overview of the fuel tax provisions, specifically, the reinstatement of the hazardous Superfund financing fee.

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Detailed Transcription of Weaver’s Motor Fuels Tax Minute, Episode 8

00:00:00

Emilda: Welcome to Weaver’s Motor Fuels Tax Minute, where we talk all things motor fuels. This week, we are continuing to talk about the fuel tax related provision in the Inflation Reduction Act. One provision that seems to be getting less attention is the reinstatement of the hazardous Superfund financing fee.

00:00:19

Leanne: The hazardous Superfund financing fee is a Superfund tax on crude oil and imported petroleum products. It’s found in Section 4611 of the Internal Revenue Code alongside the federal oil spill tax. It previously expired in 1995, so much like the Superfund tax on chemicals, which was reinstated in July of this year, it’s been almost 30 years since that tax was last imposed.

00:00:43

Emilda: Yes, Leanne. The reinstatement of the crude oil and petroleum products Superfund tax takes effect on January 1, 2023. The rate of the tax has been increased from 9.7 cents per barrel when it expired, to 16.4 cents per barrel. This makes the total of the oil spill and Superfund taxes on crude oil and petroleum products 25.4 cents per barrel, a very significant increase from the 9 cents per barrel currently imposed on the oil spill tax.

00:01:19

Leanne: That’s right, Emilda. That is a very significant increase and it’s somewhat surprising that it’s getting less attention. The Superfund tax has been reinstated for a period of ten years, so it will have a new expiration date of December 1, 2032. The oil spill tax is currently set to expire at the end of 2025. Taxpayers who currently remit oil spill tax should begin remitting the hazardous substance Superfund financing fee on January 1 and including it in their semi-monthly federal excise tax deposits. We anticipate the IRS will update both forms 6627 and 720 for the reporting of this tax.

00:01:59

Emilda: That is this week’s motor fuels tax minute. Stay tuned next week when we will be discussing some recent changes to form 637 processing times.