Sec. 3. Imposition of tax on carryout bags
1,398 words·~6 min read·
/bill/116/hr/5845/ih/section-3A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
Chapter 31 of the Internal Revenue Code of 1986 is amended by inserting after subchapter C the following new subchapter: Sec. 4056. Imposition of tax. There is hereby imposed on any retail sale a tax on each carryout bag provided to a customer by an applicable entity. The amount of tax imposed by subsection
(a)shall be $0.10 per carryout bag. The applicable entity shall be liable for the tax imposed by this section. For purposes of this section— Subject to subparagraph (B), the term applicable entity means— any restaurant (as defined in section 12001 of the Solid Waste Disposal Act), or any business which— sells food, alcohol, or any other good or product to the public at retail, or elects to comply with the requirements under this section. For purposes of this section, the term applicable entity shall not include any entity described in subparagraph
(A)if the State, or any local government or political subdivision thereof, in which such entity is located has been granted a waiver pursuant to clause (ii). The Secretary shall prescribe rules providing for the waiver of application of this section with respect to any State, or any local government or political subdivision thereof, which has enacted a tax or fee on the provision of carryout bags which is similar to the tax imposed under this section. The term carryout bag means a bag of any material that is provided to a consumer at the point of sale to carry or cover purchases, merchandise, or other items. Such term shall not include any product described in section 12201(a)(2)(B)(ii) of the Solid Waste Disposal Act. The tax imposed by subsection
(a)shall be separately stated on the receipt of sale provided to the customer. The tax imposed under subsection
(a)shall not apply to any carryout bag that is provided to a customer as part of a transaction in which the customer is purchasing any item using benefits received under the supplemental nutrition assistance program established under the Food and Nutrition Act of 2008 ( 7 U.S.C. 2011 et seq.) or the supplemental nutrition program for women, infants, and children authorized under section 17 of the Child Nutrition Act of 1966 ( 42 U.S.C. 1786 ). If any applicable entity fails to collect the tax imposed under subsection
(a)or satisfy the requirements under subsection (e), the Secretary shall provide such entity with written notification regarding the violation of the requirements under such subsections. If any applicable entity, subsequent to receiving a written notification described in paragraph (1), fails to collect the tax imposed under subsection
(a)or satisfy the requirements under subsection (e), such entity shall pay a penalty in addition to the tax imposed under this section. For each violation during a calendar year, the amount of the penalty under subparagraph
(A)shall be— in the case of the first violation, $250, in the case of the second violation, $500, and in the case of the third violation or any subsequent violation, $1,000. In the case of any applicable entity with less than $1,000,000 in total revenue for the year preceding the imposition of any penalty under this paragraph, any such penalty may not be imposed under this paragraph more than once during any 7-day period. Nothing in this section or any regulations promulgated under this section shall preempt, limit, or supersede, or be interpreted to preempt, limit, or supersede— any law or regulation relating to any tax or fee on carryout bags which is imposed by a State or local government entity, or any political subdivision, agency, or instrumentality thereof, or any additional fees imposed by any applicable entity on carryout bags provided to its customers. . Subchapter B of chapter 65 of such Code is amended by adding at the end the following new section: If— tax has been imposed under section 4056 on any carryout bag, an applicable entity provides such bag to a customer in a point of sale transaction, and such entity has kept and can produce records for purposes of this section and section 4056 that include— the total number of carryout bags provided to customers for which the tax was imposed under section 4056(a) and the amounts passed through to customers for such bags pursuant to section 4056(e), and the total number of bags for which a refund was provided to customers pursuant to a carryout bag credit program, the Secretary shall pay (without interest) to such entity an amount equal to the applicable amount for each bag provided by such entity in connection with a point of sale transaction. For purposes of subsection (a), the applicable amount is an amount equal to— in the case of an applicable entity that has established a carryout bag credit program, $0.10, and in the case of an applicable entity that has not established a carryout bag credit program, $0.04. For purposes of this section, the term carryout bag credit program means a program established by an applicable entity which— for each bag provided by the customer to package any items purchased from the applicable entity, such entity refunds such customer $0.05 for each such bag from the total cost of their purchase, separately states the amount of such refund on the receipt of sale provided to the customer, and prominently advertises such program at each entrance and checkout register of the applicable entity. For purposes of this section, the terms applicable entity and carryout bag have the same meanings given such terms under section 4056(d). . Subchapter A of chapter 98 of such Code is amended by adding at the end the following: There is established in the Treasury of the United States a trust fund to be known as the Recycling and Litter Cleanup Trust Fund (referred to in this section as the Trust Fund ), consisting of such amounts as may be appropriated or credited to the Trust Fund as provided in this section or section 9602(b). There is hereby appropriated to the Trust Fund an amount equivalent to the amounts received in the Treasury pursuant to section 4056. Amounts in the Trust Fund shall be available, as provided by appropriation Acts, for— making payments under section 6431, and making grants for— reusable carryout bags, and recycling, reuse, and composting infrastructure and litter cleanup. . Not later than the date which is 18 months after the date of enactment of this Act, the Comptroller General of the United States shall conduct a study on the effectiveness of sections 4056, 6431, and 9512 of the Internal Revenue Code of 1986 (as added by this Act) at reducing the use of carryout bags and encouraging the use of reusable bags. The report shall address— the use of plastic or paper single-use carryout bags during the period preceding the enactment of such sections; the effect of such sections on the citizens and residents of the United States, including— the percentage reduction in the use of plastic or paper single-use carryout bags as a result of the enactment of such sections; the opinion among citizens and residents of the United States regarding the effect of such sections, disaggregated by race and income level; and the amount of substitution between other types of plastic bags for single-use carryout bags; measures that the Comptroller General determines may increase the effectiveness of such sections, including the amount of tax imposed on each carryout bag; and any effects, both positive and negative, on United States businesses as a result of the enactment of such sections, including costs, storage space, and changes in paper bag usage. The Comptroller General shall submit a report of such study to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate. The table of subchapters for chapter 31 of such Code is amended by inserting after the item relating to subchapter C the following new item: Subchapter D. Carryout bags . The table of sections for subchapter B of chapter 65 of such Code is amended by adding at the end the following new item: Sec. 6431. Carryout bag credit program. . 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. Recycling and litter cleanup trust fund. . The amendments made by this section shall take effect on January 1, 2022.
Connectionstraces to 2
Traces to 2 documents
Citation graph
cites case law
Cites 2Cited by 0 across 0 sources