Apparel 
Requirements
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2002
IRS Excise Tax Increased As To |
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May
8 , 2002 A new version of IRS Publication 510 summarizes the increased 2002 excise tax laws that apply to ozone-depleting chemicals (ODCs) and the wide variety of imported products which contain or are manufactured using ODCs. The quarterly tax liability for Environmental Taxes is generally reported on IRS Form 720, and IRS Form 6627 where:
Imported taxable products generally taxed when sold or used by importer The tax is generally imposed on an ODC when it is "first used" or sold by its manufacturer or importer, however, alternatively, the importer may elect to pay the tax on importation using IRS Form 6627. This election may only be revoked with the consent of the IRS and applies to all products held by the importer when the election becomes effective and to all products entered into the U.S. after the election becomes effective. According to the IRS, the tax is based on the weight of the ODCs used in the manufacture of the product. However, the IRS states that if the actual weight cannot be determined and the Imported Products Table does not list an ODC weight for the product, the rate of tax is 1% of the entry value of the product. Also "Floor stock" taxes exist and are imposed on ODC products where the product is held for sale or use in further manufacturing by someone other than an importer or manufacturer after January 1, 2002. (See IRS Publication 510 for more information) IRS Form 6627 also describes the following ODCs as taxable:
Form 6627 is used to calculate:
The following persons must file a Form 6627:
Exempt Products The following are exempt from the ODC tax:
Taxable Imported Products: Appendix B IRS Publication 510, Appendix B contains the Imported Products Table. For most of the products on the Imported Products Table, the applicable HTS number, the type of ODC in the product, and the ODC weight are provided. Thus, importers should review HTS classifications for accuracy as a part of both Customs "reasonable care" requirements, as well as IRS excise tax liability requirements. If in doubt as to a product's correct classification, the advise of an experienced Customs broker or Customs attorney should be sought. Products on the ODC table include: (partial list, see Appendix for complete details)
According to the IRS, a product is included on the Imported Products Table even if it is manufactured with or contains a different ODC from the one specified in the table. The Imported Products Table is divided into three sections:
The IRS also states that an importer or manufacturer of a product may request that the IRS add a product and its ODC weight to the table. In addition, importers and manufacturers may also request that the IRS remove a product from the table or change or specify the ODC weight of a product. If you have any questions about the issues raised in this newsletter, please contact George R. Tuttle, Sr. at (415) 986-8780 or via email at grt@tuttlelaw.com.
Copyright © 2002 by Tuttle Law Offices. All rights reserved. Information has been obtained from sources believed to be reliable. However, because of the possibility of human or mechanical error by our offices or by others, we do not guarantee the accuracy, adequacy, or completeness of any information and are not responsible for any errors, omissions, or for the results obtained from the use of such information.
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