This article provides an overview of the Environmental Tax on Petroleum and Imported Products, Chemicals (other than ODCs), Imported Chemical Substances, ODCs, and Floor Stocks Tax on ODCs as outlined in the form 6627. It explains who must file, the taxes on each thing, specific instructions, and elections that can be made.
What is Form 6627?
Form 6627 is an IRS form used to calculate environmental taxes and the floor stocks tax on ODCs (Ozone-Depleting Chemicals) for domestic and imported petroleum, chemicals, imported chemical substances, and ODCs included in imported products. Depending on the taxpayer, the form may be used to calculate taxes on crude oil when received at a U.S. refinery, on chemical substances imported into the U.S., or on chemical substances or imported products containing ODCs. Depending on the tax situation, the form can include steps to calculate taxes based on the price per barrel, per pound, or per 1% of the value of the substance or product.
IRS Form 6627 – Who Needs to Fill It Out?
The tax on petroleum is imposed on domestic crude oil when it is received at a U.S. refinery, on imported crude oil received at a U.S. refinery, and on imported petroleum products when they are entered into the United States. This tax is to be handled by the operator of the refinery, the user or exporter of crude oil, and the person entering the petroleum product into the country. For chemicals (other than ODCs) the manufacturer, producer, or importer of chemicals who sells or uses those chemicals must fill out the form. For imported chemical substances, the importer of substances who sells or uses those substances must fill it out. For ODCs, the manufacturer or importer of ODCs who sells or uses those ODCs, the importer of taxable products who sells or uses those products, and the person other than the manufacturer or importer of ODCs who holds ODCs for sale or use in manufacturing must fill out the form.
Step-by-Step: Form 6627 Instructions For Filling Out the Document
In Form 6627, complete Parts I – V to figure the environmental taxes imposed on petroleum, chemicals, imported chemical substances, ODCs, and imported products that used ODCs as materials. The operator of the refinery receiving the crude oil, the user or exporter of the crude, and the importer of the petroleum products are all liable to pay the tax. The manufacturer, producer or importer of the chemicals selling or using them is liable to pay the tax. When filing Form 720 with Form 6627, you will need to supply documentation of the previous tax imposed on the imported crude oil. Different taxes and tax rates apply to the varied chemicals, and you may need to calculate the tax rate and conversion factor. When calculating the tax on imported products containing ODCs, you can choose to make the importer election, meaning the tax will apply to the product on the date of entry. Carefully review the obligations laid out in Form 6627 as outlined in Pub. 510 and the Instructions for Form 720.
Below, we present a table that will help you understand how to fill out Form 6627.
|Form Name||Information Required||Details|
|Form 6627||Step-by-Step Instructions for Form 6627||Step-by-step instructions for completing Form 6627 to figure environmental taxes imposed on various substances and products, including petroleum and chemicals.|
Do You Need to File Form 6627 Each Year?
Yes, Form 6627 must be filed each year in order to accurately calculate the environmental tax on petroleum and imported petroleum products, chemicals, imported chemical substances, ozone depleting chemicals (ODCs), and imported products that used ODCs as materials in their manufacture or production. The form must be submitted with Form 720, Quarterly Federal Excise Tax Return, and it is divided into five parts, each of which requires different information. Depending on the situation this information may include weights, amounts used, tax rates, and election of mixtures. The person liable for the tax depends on the type – users or exporters of crude oil, chemical producers or importers, and a variety of other people based on the specific tax. Knowing what to file and where to file it is important in order to remain compliant with excise tax laws.
Download the official IRS Form 6627 PDF
On the official IRS website, you will find a link to download Form 6627. However, to make it easier for you, we are providing the link in our article, which comes directly from the official irs.gov website! Click to download: Form 6627