Excise tax on plastics

(a)

In general

Chapter 38 of the Internal Revenue Code of 1986 is amended by adding at the end thereof the following new subchapter:

Tax on plastics

Sec. 4691. Imposition of tax.

Sec. 4692. Definitions and special rules.

4691.

Imposition of tax

(a)

General rule

There is hereby imposed—(1)a tax on any taxable virgin plastic resin sold by an applicable entity, and(2)a tax on any imported covered item sold or used by the importer thereof.(b)

Amount of tax

(1)

Taxable virgin plastic resin

(A)

In general

The amount of the tax imposed under subsection (a)(1) shall be determined in accordance with the following table:For any sale during calendar year:The tax is the following amount per pound of taxable virgin plastic resin:202210 cents202315 cents202420 cents2025 or thereafterAdjusted amount.

(B)

Adjusted amount

(i)

In general

For purposes of subparagraph (A), the adjusted amount for any sale during any calendar year beginning after December 31, 2024, shall be equal to the sum of—(I)20 cents, plus(II)an amount equal to—(aa)20 cents, multiplied by(bb)the cost-of-living adjustment determined under section 1(f)(3) for the calendar year, determined by substituting calendar year 2023 for calendar year 2016 in subparagraph (A)(ii) thereof. (ii)

Rounding

If any amount determined under clause (i) is not a multiple of 1 cent, such amount shall be rounded to the nearest multiple of 1 cent.(2)

Imported covered items

(A)

In general

Except as provided in subparagraph (B), the amount of the tax imposed under paragraph (2) of subsection (a) on any imported covered item shall be the amount of tax which would have been imposed by paragraph (1) of such subsection with respect to the amount of any taxable virgin plastic resin contained in such item if such resin had been sold in the United States by an applicable entity on the date of the sale of such item.(B)

Rate where importer does not furnish information to Secretary

If the importer does not furnish to the Secretary (at such time and in such manner as the Secretary shall prescribe) sufficient information to determine under subparagraph (A) the amount of the tax imposed by subsection (a)(2) on any imported covered item, the amount of the tax imposed on such item shall be 10 percent of the appraised value of such item as of the time such item was entered into the United States for consumption, use, or warehousing.(C)

Authority to prescribe alternate rate

The Secretary may prescribe for each imported covered item a tax which, if prescribed, shall apply in lieu of the tax specified in subparagraph (B) with respect to such item. The tax prescribed by the Secretary shall be equal to the amount of tax which would be imposed by subsection (a) with respect to the imported covered item if such item were produced using the predominant method of production of such item.(c)

Applicable entity

(1)

In general

For purposes of this section, the term applicable entity means any manufacturer, producer, or importer of taxable virgin plastic resin which, during the calendar year in which the sale of such resin occurs, manufactures, produces, or imports more than 10 tons of taxable virgin plastic resin.(2)

Aggregation rule

For purposes of this subsection, all persons treated as a single employer under subsection (a) or (b) of section 52, or subsection (m) or (o) of section 414, shall be treated as a single manufacturer, producer, or importer.(d)

Exportation

Pursuant to regulations prescribed by the Secretary, no tax shall be imposed under this section upon the sale of any taxable virgin plastic resin for export, and in due course so exported.

4692.

Definitions and special rules

(a)

Definitions

For purposes of this subchapter—(1)

Covered item

(A)

In general

The term covered item means a single-use product which contains taxable virgin plastic resin, including packaging, food service products, beverage containers, and bags.(B)

Exclusion

The term covered item shall not include—(i)a medical product that the Secretary of Health and Human Services determines needs to be made of virgin plastic for public health or the health of the user,(ii)a container for—(I)a drug regulated under the Federal Food, Drug, and Cosmetic Act,(II)infant formula, or(III)a meal replacement liquid,(iii)a personal or feminine hygiene product that could be unsafe or unsanitary to recycle,(iv)a sexual health product, or(v)packaging—(I)for a product described in clauses (i) through (iv), or(II)used for the shipment of hazardous materials that is prohibited from being composed of used materials under section 178.509 or 178.522 of title 49, Code of Federal Regulations (as in effect on the date of enactment of this subchapter). (C)

Other terms

(i)

Bag

The term bag means a container made of flexible material with an opening at the top, used for carrying items.(ii)

Beverage container

The term beverage container means a prepackaged beverage container the volume of which is not greater than 3 liters.(iii)

Food service product

The term food service product means an item intended to deliver a food product, including a utensil, straw, drink cup, drink lid, food package, food container, plate, bowl, meat tray, or food wrap.(iv)

Packaging

The term packaging means a package, container, packing materials, or other material used for the containment, protection, handling, delivery, and presentation of goods.(v)

Single-use product

The term single-use product means a product which is—(I)routinely disposed of after a single use or after its contents have been used or unpackaged, and typically not refilled, and(II)not durable, washable, or routinely used for its original purpose multiple times before disposal.(2)

Imported covered item

The term imported covered item means any covered item entered into the United States for consumption, use, or warehousing.(3)

Taxable virgin plastic resin

(A)

In general

The term taxable virgin plastic resin means any resin—(i)which is derived from petroleum or gas (including ethylene, propylene, polyethylene, polypropylene, polystyrene, and polyvinyl chloride), and(ii)which is manufactured or produced in the United States or entered into the United States for consumption, use, or warehousing.(B)

Exclusion of post-consumer recycled resin

The term taxable virgin plastic resin shall not include any resin which has been reprocessed from recovered material so it can be used for its original purpose or for other purposes in place of resin described in clause (i) of subparagraph (A).(4)

United States

The term United States has the meaning given such term by section 4612(a)(4).(5)

Importer

The term importer means the person entering the taxable virgin plastic resin or covered item for consumption, use, or warehousing.(b)

Fraction of a pound

In the case of a fraction of a pound, the tax imposed by section 4691 shall be the same fraction of the amount of such tax imposed on a whole pound.(c)

Use treated as sale

If any applicable entity manufactures, produces, or imports any taxable virgin plastic resin and uses such resin, then such person shall be liable for tax under section 4691 in the same manner as if such resin were sold by such entity.(d)

Refund or credit for certain uses

Under regulations prescribed by the Secretary, if—(1)a tax under section 4691(a)(1) was paid with respect to any taxable virgin plastic resin, and(2)such resin was used by any person in the manufacture or production within the United States of any product which is not a covered item,

then an amount equal to the tax so paid shall be allowed as a credit or refund (without interest) to such person in the same manner as if it were an overpayment of tax imposed by such section.

(e)

Disposition of revenues from Puerto Rico and the Virgin Islands

The provisions of subsections (a)(3) and (b)(3) of section 7652 shall not apply to any tax imposed by section 4691.(f)

Regulations

The Secretary shall prescribe such regulations as may be necessary to carry out the provisions of this subchapter.

(b)

Plastic Waste Reduction Fund

Subchapter A of chapter 98 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:

9512.

Plastic Waste Reduction Fund

(a)

Establishment and funding

There is hereby established in the Treasury of the United States a trust fund to be referred to as the Plastic Waste Reduction Fund, consisting of such amounts as may be appropriated or credited to such trust fund as provided for in this section and section 9602(b).(b)

Transfers to the Plastic Waste Reduction Fund

There are hereby appropriated to the Plastic Waste Reduction Fund amounts equivalent to the taxes received in the Treasury under section 4691 (minus any refunds or credits pursuant to section 4692(d)).(c)

Expenditures from the Plastic Waste Reduction Fund

Amounts in the Plastic Waste Reduction Fund shall be available, as provided by appropriation Acts, for making expenditures—(1)to carry out reduction and recycling activities, including making improvements to recycling infrastructure,(2)to carry out plastic waste and marine debris reduction, detection, monitoring, and cleanup activities of— (A)the grant programs established under section 302 of the Save Our Seas 2.0 Act (33 U.S.C. 4282),(B)the Marine Debris Program established by section 3 of the Marine Debris Act (33 U.S.C. 1952), (C)the Marine Debris Foundation established by section 111 of the Save Our Seas 2.0 Act (33 U.S.C. 4211), and(D)other Federal programs carrying out such activities, and(3)to address environmental justice and pollution impacts from plastic production.

(c)

Clerical amendments

(1)The table of subchapters for chapter 38 of the Internal Revenue Code of 1986 is amended by adding at the end the following new item:

Subchapter E—Tax on Plastics

(2)The table of sections for subchapter A of chapter 98 of such Code is amended by adding at the end the following new item:

Sec. 9512. Plastic Waste Reduction Fund.

(d)

Effective date

The amendments made by this section shall take effect on January 1, 2022.