WASHINGTON (April 28, 2025) – Many industry groups and taxpayer advocacy organizations are bringing renewed attention to how misguided tax policy is jeopardizing American jobs and domestic manufacturing and are urging policymakers’ swift passage of the Chemical Tax Repeal Act through budget reconciliation. This legislation would repeal the excise taxes imposed on 42 chemicals, critical minerals and metallic elements by the Infrastructure Investment and Jobs Act of 2021.
Earlier this year, the Chemical Tax Repeal Act reintroduced in the Senate (S.615) by Senators Ted Cruz (R-TX), John Barrasso (R-WY), John Kennedy (R-LA), Mike Lee (R-UT), and John Cornyn (R-TX) and in the House (H.R. 640) by Representatives Beth Van Duyne (R-TX), Mike Carey (R-OH), Carol Miller (R-WV) and Darin LaHood (R-IL). A new estimate by the Joint Committee on Taxation indicates that the repeal of this tax beginning January 1, 2026 would have a cost of $4.86 billion through 2035, a significant reduction to the Committee’s original estimate.
A recent ACC analysis shows that a repeal of the Superfund tax could increase chemical industry output by more than $300 million annually. The taxes are affecting chemical supply chains and markets and continue to increase costs for consumers and businesses. An IRS hearing affirmed their impacts on industries including fertilizer, farming, energy production, and manufacturing.
The tax burden is primarily falling on ethylene, propylene, benzene, chlorine, and xylene. These chemicals are building blocks for chemistries used in light vehicles, building and construction, business equipment, water delivery and purification, and more. Many of the affected items help advance priorities such as national defense, energy independence, modern healthcare, technology development, and innovation.
It is time for Congress to repeal these taxes through budget reconciliation – a key step in creating a stronger, more affordable America.
