IRS Reviews Petitions to Add Resin Copolymers to Superfund Tax List

IRS Eyes Expansion of Superfund Tax Net

The IRS is considering petitions that could subject specific resin copolymers to the Superfund excise tax upon import, a move that would impact companies importing these substances. The Superfund tax, governed by Section 4672 of the tax code, applies to imported substances containing a significant amount of taxable chemicals. Specifically, if the IRS determines, in consultation with the EPA and CBP, that taxable chemicals (under Section 4661) constitute more than 20 percent of the weight or value of the materials used to produce a substance, that substance can be added to the list of taxable substances under Section 4672(a). The Infrastructure Investment and Jobs Act (IIJA) of 2021 lowered the threshold for "taxable substances" from 50% to 20%, vastly increasing the number of imported products subject to the tax.

Now, two separate petitions have been filed requesting the addition of specific copolymers to this list.

The Vinyl Acetate-Crotonic Acid Petition

Now, two separate petitions have been filed requesting the addition of specific copolymers to this list. The first petition, filed by AOC Resins and Coatings, seeks to add vinyl acetate-crotonic acid copolymer in a styrene solution ((C4H6O2)x-(C4H6O2)y-(C8H8)s; x=99, y=1, s=124) to the list of taxable substances.

AOC Resins and Coatings contends that taxable chemicals constitute 70.05% of the weight of the materials used to produce this substance. Specifically, the petitioner claims the following taxable inputs are used:

• Ethylene
• Methane
• Benzene

Based on their calculations, AOC Resins and Coatings proposes a tax rate of $7.48 per ton for vinyl acetate-crotonic acid copolymer in a styrene solution. The public docket number for this petition is IRS–2025–0598.

Second Petition: Methyl Methacrylate Copolymer

Following the petition regarding vinyl acetate-crotonic acid copolymer, the IRS has also announced a notice of filing for another substance under 26 U.S.C. § 4672(a), which governs the Superfund excise tax on certain chemical substances. Section 4672(a) allows the IRS to designate substances as "taxable substances" if they contain more than 20% of taxable chemicals by weight or value. This triggers the Superfund tax when these substances are imported or sold.

This second notice concerns a petition to add Methyl Methacrylate-ethyl Methacrylate-methacrylic Acid Copolymer in a Styrene Solution to the list of taxable substances. The provided chemical formula components are ((C 5 H 8 O 2 ) x -(C 6 H 10 O 2 ) y -(C 4 H 6 O 2 ) z -(C 8 H 8 ) s ; x=75.76, y=8.46, z=1, s=168.4).

The public docket number for this petition is IRS–2025–0599. Interested parties must submit written comments or requests for a public hearing on or before March 16, 2026.

Industry Impact: Winners and Losers

The potential expansion of the Superfund tax net, through the possible addition of Vinyl Acetate-Crotonic Acid Copolymer in a Styrene Solution and Methyl Methacrylate-ethyl Methacrylate-methacrylic Acid Copolymer in a Styrene Solution, creates distinct winners and losers within the chemical and importing industries. This change arises under 26 U.S.C. § 4672(a), which defines "Taxable Substances" as any substance listed by the Secretary of the Treasury where "taxable chemicals" (under § 4661) constitute more than 20% of the weight or value of the materials used in production.

• The Losers: Importers of these substances face a direct increase in costs. If either Vinyl Acetate-Crotonic Acid Copolymer or Methyl Methacrylate-ethyl Methacrylate-methacrylic Acid Copolymer is added to the list of taxable substances, importers will owe excise tax under Section 4671 on every ton of the respective substance brought into the United States. This tax is calculated based on the amount of taxable chemicals used in the production of the imported substance. If adequate data is unavailable to determine the exact chemical composition, the tax defaults to 10% of the appraised value of the imported substance, as described in the research dossier.

• The Winners: Domestic manufacturers, such as AOC Resins (the petitioner for Vinyl Acetate-Crotonic Acid Copolymer), stand to benefit from a more level playing field. By subjecting imported substances to the Superfund excise tax, the competitive advantage previously held by importers due to the absence of this tax burden is diminished. This can lead to increased market share and potentially higher profitability for domestic producers. The Superfund regime, as structured, aims to ensure that imported products bear a tax burden equivalent to that of domestic products, where the tax is captured at the earliest possible point in the supply chain.

Practitioners should note the deadline of March 16, 2026, for submitting comments or requests for a public hearing via regulations.gov regarding the petitions for both Vinyl Acetate-Crotonic Acid Copolymer (docket number IRS–2025–0598) and Methyl Methacrylate-ethyl Methacrylate-methacrylic Acid Copolymer (docket number IRS–2025–0599). Your input is crucial in shaping the IRS's decision on these matters.