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January 24, 2023

Petition Filed to Add Polyphenylene Sulfide to List of Chemical Substances Subject to Superfund Excise Tax

Lynn L. Bergeson Carla N. Hutton

The Internal Revenue Service (IRS) announced on December 30, 2022, that it received a petition requesting the addition of polyphenylene sulfide to the list of taxable substances under Section 4672(a) of the Internal Revenue Code. 87 Fed. Reg. 80579. The petitioner is Celanese Ltd., an exporter of polyphenylene sulfide. According to the petition, “polyphenylene sulfide is a high-performance thermoplastic, has high heat and chemical resistance, and is used in applications such as filters, appliance, machine and automobile parts, replacing steel in some cases.” Polyphenylene sulfide is manufactured by the polymerization of 1,4-dichlorobenzene (p-DCB), a taxable substance, with sodium hydrosulfide and sodium hydroxide. Sodium hydrosulfide is made from sodium hydroxide and hydrogen sulfide. Taxable chemicals constitute 90.0 percent by weight of the materials used to produce this substance. Comments and requests for a public hearing are due February 28, 2023. More information on the Superfund excise tax on chemicals is available in our July 13, 2022, memorandum, “Superfund Tax on Chemicals: What You Need to Know to Comply” and our May 19, 2022, memorandum, “Reinstated Superfund Excise Tax Imposed on Certain Chemical Substances.”