What You Need to Know About the 2022 Chemical Excise Tax

What You Need to Know About the 2022 Chemical Excise Tax

Foundry, General Manufacturing

chemical excise tax

What You Need to Know About the 2022 Chemical Excise Tax

And How It Affects the Manufacturing Industries

 

The Internal Revenue Service (IRS) has re-instated a previous chemical tax after a hiatus for over 25 years. This ‘new’ chemical tax has amendments including updated tax rates on chemicals and chemical substances. The taxable items are broken up as “taxable chemicals” and “taxable substances”.

When does the Chemical Excise Tax go into effect?

As of July 1st, 2022 the Chemical Excise Tax is in full effect. The first return is due by October 31st, 2022 for the calendar quarter that ends on September 30th, 2022.

What is the tax rate?

The tax rate varies based on the type of chemical or substance. The rates range from as low as $0.44 per ton up to $9.74 per ton.

Which chemicals are included in the Chemical Excise Tax?

The IRS has compiled a list of “taxable chemicals” and “taxable chemical substances” that are to be taxed, which is subject to change. The “taxable substances” is considered as a substance that is comprised of more than 20% of one of the taxable chemicals, by weight or volume.

Scroll to the bottom for full list of chemicals and substances.

Who is responsible for paying the tax?

As stated by the IRS, “the manufacturer, producer, or importer of the taxable chemical is responsible for reporting and paying the section 4661 tax to the IRS. For taxable substances, the importer of the taxable substance is responsible for reporting and paying the section 4671 tax to the IRS.”

The taxes are to be reporting quarterly and payments be semimonthly. Those responsible for paying these chemical taxes must report them on IRS Form 720 and Form 6627.

How does this affect manufacturing industries?

Many chemicals in the excise tax are commonly used in many products throughout various industries, including foundry and parts cleaning applications. As this tax takes effect, price increases are likely from the manufacturers and importers of these products.

This tax affects such a wide range of chemicals that most industries will be affected. If you have any processes that use chemicals, you’ll be affected. Most of the affect as a use within your applications will come as prices increase long term from manufacturers and importers. Below are some specific items/processes that will be affected.

Foundry Industry

Some key items affected by this chemical tax will be sand binders, flux, adhesives, release agents, alloys, chromite sand, and more.

Parts Cleaning

Parts cleaning involves the use of various chemicals to aid in the cleaning of contaminants. Some of these chemicals may include the taxable items, driving a future increase in price on these items.

Have questions on how this affects you?

Contact our team and discuss potential proactive measures to prepare for this ‘new’ tax.

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List of “taxable chemicals”:

  • Acetylene
  • Benzene
  • Butane
  • Butylene
  • Butadiene
  • Ethylene
  • Methane
  • Naphthalene
  • Propylene
  • Toluene
  • Xylene
  • Ammonia
  • Antimony
  • Antimony trioxide
  • Arsenic
  • Arsenic trioxide
  • Barium sulfide
  • Bromine
  • Cadmium
  • Chlorine
  • Chromium
  • Chromite
  • Potassium dichromate
  • Sodium dichromate
  • Cobalt
  • Cupric sulfate
  • Cupric oxide
  • Cuprous oxide
  • Hydrochloric acid
  • Hydrogen fluoride
  • Lead oxide
  • Mercury
  • Nickel
  • Phosphorus
  • Stannous chloride
  • Stannic chloride
  • Zinc chloride
  • Zinc sulfate
  • Potassium hydroxide
  • Sodium hydroxide
  • Sulfuric acid
  • Nitric acid

List of “taxable substances”:

  • 1,4 butanediol
  • 1,3-butylene glycol
  • 1,5,9-cyclododecatriene
  • 2-ethyl hexanol
  • 2-ethylhexyl acrylate
  • 2,2,4-trimethyl-1,3-pentanediol diisobutyrate
  • 2,2,4-trimethyl-1,3-pentanediol monoisobutyrate
  • acetic acid
  • acetylene black
  • adipic acid
  • adiponitrile
  • allyl chloride
  • alpha-methylstyrene
  • aniline
  • benzaldehyde
  • benzoic acid
  • bisphenol-A
  • butanol
  • butyl acrylate
  • butyl benzyl phthalate
  • chlorinated polyethylene
  • cyclododecanol
  • decabromodiphenyl oxide
  • di-2 ethyl hexyl phthalate
  • di-n-hexyl adipate
  • diethanolamine
  • diglycidyl ether of bisphenol-A
  • diisopropanolamine
  • dimethyl terephthalate
  • dimethyl-2, 6-naphthalene dicarboxylate
  • diphenyl oxide
  • diphenylamine
  • epichlorohydrin
  • ethyl acetate
  • ethyl acrylate
  • ethyl chloride
  • ethylene dibromide
  • ethylenebistetrabromophthalimide
  • formic acid
  • glycerine
  • hexabromocyclododecane
  • hexamethylenediamine
  • isobutyl acetate
  • isopropyl acetate
  • linear alpha olefins
  • methyl acrylate
  • methyl chloroform
  • methyl isobutyl ketone
  • methyl methacrylate
  • monochlorobenzene
  • monoethanolamine
  • monoisopropanolamine
  • normal butyl acetate
  • normal propyl acetate
  • nylon 6/6
  • ortho-dichlorobenzene
  • ortho-nitrochlorobenzene
  • paraformaldehyde
  • para-dichlorobenzene
  • para-nitrochlorobenzene
  • para-nitrophenol
  • pentaerythritol
  • perchloroethylene
  • phenol
  • phosphorous pentasulfide
  • phosphorous trichloride
  • poly 1,4 butyleneterephthalate
  • poly (69/31 ethylene/cyclohexylenedimethylene terephthalate)
  • poly (96.5/3.5 ethylene/cyclohexylenedimethylene terephthalate)
  • poly (98.5/1.5 ethylene/cyclohexylenedimethylene terephthalate)
  • poly(ethyleneoxy)glycerol
  • poly(propylene)glycol
  • poly(propylene/ethylene)glycol
  • poly(propyleneoxy)glycerol
  • poly(propyleneoxy)sucrose
  • poly(propyleneoxy/ethyleneoxy)benzenediamine
  • poly(propyleneoxy/ethyleneoxy)diamine
  • poly(propyleneoxy/ethyleneoxy)glycerol
  • poly(propyleneoxy/ethyleneoxy)sucrose
  • polyalphaolefins
  • polybutene
  • polybutylene
  • polybutylene/ethylene
  • polycarbonate
  • polyethylene terephthalate pellets
  • propanol
  • sodium nitriolotriacetate monohydrate
  • synthetic linear fatty alcohols
  • synthetic linear fatty alcohol ethoxylates
  • terephthalic acid
  • tetrabromobisphenol-A
  • tetrachlorophthalic anhydride
  • tetrahydrofuran
  • texanol benzyl phthalate
  • toluene diisocyanate
  • toluenediamine
  • trichloroethylene
  • triethanolamine
  • triisopropanolamine
  • trimethylolpropane
  • vinyl acetate

Are Robotics Right For Your Application?

Are Robotics Right For Your Application?

General Manufacturing

robotics in manufacturing

Are Robotics Right For Your Application?

A look at robotics and automation in the manufacturing industry

Automation and robotic use in manufacturing processes is a trend that continues to grow in use and popularity. Automated manufacturing leads to maximum efficiency and safety, offering a competitive advantage in the market. Robotic and automated operations accomplish repetitive tasks at a faster rate, eliminate the margins of human error, and allow for workers to focus their time and efforts on more important steps in the manufacturing process.

Basic Functions of Robotics

Robotics can be used in many different applications within a manufacturing facility including abrasive blasting, material handling, complex tasks, or product packing. The most common application of automated robots within manufacturing is for processes that require high-volume, speed, repetition and accuracy that a worker can’t provide.

Processing Features

Robots offer special processing options to ensure precision and quality in your manufacturing process.

Vision Camera System

3-D Parts Scanning System

robotic blasting equipment
robotic metal finishing system

Benefits of Robotic Manufacturing

Utilization of robots in the manufacturing process provides a number of benefits.

  • Improved Product Quality
  • Reduces EHS concerns
  • Quicker Production Rates
  • Lowers Worker Risk for Dangerous Tasks
  • Increased Production Output
  • Shorter Lead Times
  • Minimal Error = Reduced Waste & Increased Yield
  • Limited Down Time
  • Ability to Redeploy for Other Applications
wet blasting equipment
robotic water deburring

The Rise of Cobots

Collaborative robots, or cobots, are quickly entering the manufacturing space. Cobots allow for tedious manual tasks to be done by a robot while working in the same space with humans without the risk factor of traditional robotics. This allows for a more collaborative environment as well as reduced floor space. Cobots eliminate the need for a caged off area for the robot to function and opens up extra space for humans to work around the cobot.

cobots in manufacturing

Let’s address some common objections to robotics.

Robots are expensive.

Yes. Robotics and automation are going to cost more upfront when you look solely at the equipment cost. Keep in mind, robotics are a long-term investment. They will continue to run for years, producing parts and making profit for your facility. The increased production will provide more opportunity for your business to do more jobs.

There are also indirect savings when robotics are implemented. Robotics reduce the margin of error which eliminates the need for extra labor, hours, waste and scrap created on a job.

Most robots will provide ROI in as little as two years.

 

Robots eliminate manufacturing jobs.

Robots aren’t solely used for worker replacement. Robots are versatile and are often implemented as an assisting source for workers who have intricate tasks. Robots will be utilized to lift, hold and move heavy pieces through a process while skilled workers execute intricate tasks.

While robots do replace the need for a worker to accomplish the repetitive tasks, they create a need for other positions such as programmers, engineers and maintenance to keep production rates at high levels.

How would robots fit within your process?

Robotic manufacturing is cost effective and can be designed for any size company. Engineers can look at your facility, production workflow and bottlenecks, to develop and implement the most cost-effective and productive automation processes.

Robots can be designed to work in confined spaces, accomplish tasks for multiple applications,  strategically mounted to take up little floorspace, or be contained within a small finishing cell, allowing for safe walkways throughout your facility. Freeing up floor space to allow for future production and safe walkways throughout your facility.

 

Typical Applications:

  • Automated or Robotic Blasting Machines (Air or Wet Blasting)
  • Mass Finishing Systems
  • Deburring
  • Grinding, Buffing, and Polishing
  • Parts Cleaning Systems
  • Foundry Sand Molding Equipment
  • Material Handling
robotic deburring
robotic finishing cell

This leads us back to the question, are robotics right for you?

Automation and robotics can be implemented in large or small capacities to benefit any sized facility. Robotics and automation continue to be an integral part of manufacturing in facilities of all sizes, producing more manufactured parts at lower costs to compete with offshore companies. Our team of technically trained representatives can look at your facility, workflow, and processes to develop an efficient and the more cost-effective automation solution.

Video: An automated buffing system utilizing a robotic arm to move parts in and out of the finishing cell.

Find out how robotics and automation can improve your manufacturing facility

Talk to our team of technically trained representatives and schedule a site visit to see how automation and robotics can fit into your facility and increase your production rates.

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