[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 2645 Introduced in Senate (IS)]
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117th CONGRESS
1st Session
S. 2645
To amend the Internal Revenue Code of 1986 to establish an excise tax
on plastics.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
August 5, 2021
Mr. Whitehouse introduced the following bill; which was read twice and
referred to the Committee on Finance
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to establish an excise tax
on plastics.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Rewarding Efforts to Decrease
Unrecycled Contaminants in Ecosystems Act of 2021'' or the ``REDUCE Act
of 2021''.
SEC. 2. 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:
``Subchapter E--Tax on Plastics
``Sec. 4691. Imposition of tax.
``Sec. 4692. Definitions and special rules.
``SEC. 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:
------------------------------------------------------------------------
The tax is the
following amount
``For any sale during calendar year: per pound of
taxable virgin
plastic resin:
------------------------------------------------------------------------
2022................................................. 10 cents
2023................................................. 15 cents
2024................................................. 20 cents
2025 or thereafter................................... Adjusted 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.
``SEC. 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:
``SEC. 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.
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