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Bill to Tax Virgin Plastic Used for Single-Use Products Introduced in House

Stacks of binders of regulations

Congressman Tom Suozzi (D-Long Island, Queens) introduced a bill that would impose a fee on the sale of virgin plastic used for single-use products. The tax would start at 10-cents per pound in 2022, increase to 15-cents per pound in 2023, increase to 20-cents per pound in 2024, and then be adjusted for inflation from 2025 onward. The bill, S. 2645, was originally introduced in the Senate by Senator Sheldon Whitehouse (D-RI) on August 5th.

The legislation, titled, “Rewarding Efforts to Decrease Unrecycled Contaminants in Ecosystem Act of 2021,” or the “REDUCE Act of 2021,” would amend the Internal Revenue Code of 1986 to establish an excise tax on virgin plastic resins, which would be paid by manufacturers, producers, and importers (subject to certain limitations). However, businesses would be able to get rebates for non-single use products and plastics used in specified applications, including medical and personal-hygiene products.

“This bill with Senator Whitehouse is a commonsense way to create an economic incentive for businesses to use recycled plastic instead of creating more new plastic waste”, Senator Suozzi stated in a press release

A concern that industry has with the bill is that while the tax is aimed at “single-use” plastics, it taxes resin that is used to manufacture products that are not single-use. The tax “would do nothing to create circular solutions that help keep plastics out of our environment,” wrote Joshua Baca, Vice President of the American Chemical Council’s (ACC) Plastics Division. In a blog about the bill, he added, “[m]any companies would pay the tax, the government would hold the money, and then companies would have to ask for it, an expensive use of labor that defies common sense and imposes lost opportunity costs”.
The bill is currently before the Senate Finance Committee