II 

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. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Rewarding Efforts to 

5 Decrease Unrecycled Contaminants in Ecosystems Act of 

6 2021’’ or the ‘‘REDUCE Act of 2021’’. 

7 SEC. 2. EXCISE TAX ON PLASTICS. 

8 (a) IN GENERAL.—Chapter 38 of the Internal Rev9 enue Code of 1986 is amended by adding at the end there10 of the following new subchapter: 


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1 ‘‘Subchapter E—Tax on Plastics 

‘‘Sec. 4691. Imposition of tax. 

‘‘Sec. 4692. Definitions and special rules. 

2 ‘‘SEC. 4691. IMPOSITION OF TAX. 

3 ‘‘(a) GENERAL RULE.—There is hereby imposed— 

4 ‘‘(1) a tax on any taxable virgin plastic resin 

5 sold by an applicable entity, and 

6 ‘‘(2) a tax on any imported covered item sold 

7 or used by the importer thereof. 

8 ‘‘(b) AMOUNT OF TAX.— 

9 ‘‘(1) TAXABLE VIRGIN PLASTIC RESIN.— 

10 ‘‘(A) IN GENERAL.—The amount of the 

11 tax imposed under subsection (a)(1) shall be de12 termined in accordance with the following table: 

‘‘For any sale during calendar year: 

The tax is the following amount per 

pound of taxable 

virgin plastic 

resin: 

2022 ...................................................................................... 10 cents

2023 ...................................................................................... 15 cents

2024 ...................................................................................... 20 cents

2025 or thereafter ................................................................ Adjusted amount. 

13 ‘‘(B) ADJUSTED AMOUNT.— 

14 ‘‘(i) IN GENERAL.—For purposes of 

15 subparagraph (A), the adjusted amount for 

16 any sale during any calendar year begin17 ning after December 31, 2024, shall be 

18 equal to the sum of— 


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1 ‘‘(I) 20 cents, plus 

2 ‘‘(II) an amount equal to— 

3 ‘‘(aa) 20 cents, multiplied by 

4 ‘‘(bb) the cost-of-living ad5 justment determined under sec6 tion 1(f)(3) for the calendar year, 

7 determined by substituting ‘cal8 endar year 2023’ for ‘calendar 

9 year 2016’ in subparagraph 

10 (A)(ii) thereof. 

11 ‘‘(ii) ROUNDING.—If any amount de12 termined under clause (i) is not a multiple 

13 of 1 cent, such amount shall be rounded to 

14 the nearest multiple of 1 cent. 

15 ‘‘(2) IMPORTED COVERED ITEMS.— 

16 ‘‘(A) IN GENERAL.—Except as provided in 

17 subparagraph (B), the amount of the tax im18 posed under paragraph (2) of subsection (a) on 

19 any imported covered item shall be the amount 

20 of tax which would have been imposed by para21 graph (1) of such subsection with respect to the 

22 amount of any taxable virgin plastic resin con23 tained in such item if such resin had been sold 

24 in the United States by an applicable entity on 

25 the date of the sale of such item. 


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1 ‘‘(B) RATE WHERE IMPORTER DOES NOT

2 FURNISH INFORMATION TO SECRETARY.—If the 

3 importer does not furnish to the Secretary (at 

4 such time and in such manner as the Secretary 

5 shall prescribe) sufficient information to deter6 mine under subparagraph (A) the amount of 

7 the tax imposed by subsection (a)(2) on any im8 ported covered item, the amount of the tax im9 posed on such item shall be 10 percent of the 

10 appraised value of such item as of the time 

11 such item was entered into the United States 

12 for consumption, use, or warehousing. 

13 ‘‘(C) AUTHORITY TO PRESCRIBE ALTER14 NATE RATE.—The Secretary may prescribe for 

15 each imported covered item a tax which, if pre16 scribed, shall apply in lieu of the tax specified 

17 in subparagraph (B) with respect to such item. 

18 The tax prescribed by the Secretary shall be 

19 equal to the amount of tax which would be im20 posed by subsection (a) with respect to the im21 ported covered item if such item were produced 

22 using the predominant method of production of 

23 such item. 

24 ‘‘(c) APPLICABLE ENTITY.— 


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1 ‘‘(1) IN GENERAL.—For purposes of this sec2 tion, the term ‘applicable entity’ means any manu3 facturer, producer, or importer of taxable virgin 

4 plastic resin which, during the calendar year in 

5 which the sale of such resin occurs, manufactures, 

6 produces, or imports more than 10 tons of taxable 

7 virgin plastic resin. 

8 ‘‘(2) AGGREGATION RULE.—For purposes of 

9 this subsection, all persons treated as a single em10 ployer under subsection (a) or (b) of section 52, or 

11 subsection (m) or (o) of section 414, shall be treated 

12 as a single manufacturer, producer, or importer. 

13 ‘‘(d) EXPORTATION.—Pursuant to regulations pre14 scribed by the Secretary, no tax shall be imposed under 

15 this section upon the sale of any taxable virgin plastic 

16 resin for export, and in due course so exported. 

17 ‘‘SEC. 4692. DEFINITIONS AND SPECIAL RULES. 

18 ‘‘(a) DEFINITIONS.—For purposes of this sub19 chapter— 

20 ‘‘(1) COVERED ITEM.— 

21 ‘‘(A) IN GENERAL.—The term ‘covered 

22 item’ means a single-use product which contains 

23 taxable virgin plastic resin, including packaging, 

24 food service products, beverage containers, and 

25 bags. 


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1 ‘‘(B) EXCLUSION.—The term ‘covered 

2 item’ shall not include— 

3 ‘‘(i) a medical product that the Sec4 retary of Health and Human Services de5 termines needs to be made of virgin plastic 

6 for public health or the health of the user, 

7 ‘‘(ii) a container for— 

8 ‘‘(I) a drug regulated under the 

9 Federal Food, Drug, and Cosmetic 

10 Act, 

11 ‘‘(II) infant formula, or 

12 ‘‘(III) a meal replacement liquid, 

13 ‘‘(iii) a personal or feminine hygiene 

14 product that could be unsafe or unsanitary 

15 to recycle, 

16 ‘‘(iv) a sexual health product, or 

17 ‘‘(v) packaging— 

18 ‘‘(I) for a product described in 

19 clauses (i) through (iv), or 

20 ‘‘(II) used for the shipment of 

21 hazardous materials that is prohibited 

22 from being composed of used mate23 rials under section 178.509 or 

24 178.522 of title 49, Code of Federal 


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1 Regulations (as in effect on the date 

2 of enactment of this subchapter). 

3 ‘‘(C) OTHER TERMS.— 

4 ‘‘(i) BAG.—The term ‘bag’ means a 

5 container made of flexible material with an 

6 opening at the top, used for carrying 

7 items. 

8 ‘‘(ii) BEVERAGE CONTAINER.—The 

9 term ‘beverage container’ means a pre10 packaged beverage container the volume of 

11 which is not greater than 3 liters. 

12 ‘‘(iii) FOOD SERVICE PRODUCT.—The 

13 term ‘food service product’ means an item 

14 intended to deliver a food product, includ15 ing a utensil, straw, drink cup, drink lid, 

16 food package, food container, plate, bowl, 

17 meat tray, or food wrap. 

18 ‘‘(iv) PACKAGING.—The term ‘pack19 aging’ means a package, container, pack20 ing materials, or other material used for 

21 the containment, protection, handling, de22 livery, and presentation of goods. 

23 ‘‘(v) SINGLE-USE PRODUCT.—The 

24 term ‘single-use product’ means a product 

25 which is— 


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1 ‘‘(I) routinely disposed of after a 

2 single use or after its contents have 

3 been used or unpackaged, and typi4 cally not refilled, and 

5 ‘‘(II) not durable, washable, or 

6 routinely used for its original purpose 

7 multiple times before disposal. 

8 ‘‘(2) IMPORTED COVERED ITEM.—The term 

9 ‘imported covered item’ means any covered item en10 tered into the United States for consumption, use, 

11 or warehousing. 

12 ‘‘(3) TAXABLE VIRGIN PLASTIC RESIN.— 

13 ‘‘(A) IN GENERAL.—The term ‘taxable vir14 gin plastic resin’ means any resin— 

15 ‘‘(i) which is derived from petroleum 

16 or gas (including ethylene, propylene, poly17 ethylene, polypropylene, polystyrene, and 

18 polyvinyl chloride), and 

19 ‘‘(ii) which is manufactured or pro20 duced in the United States or entered into 

21 the United States for consumption, use, or 

22 warehousing. 

23 ‘‘(B) EXCLUSION OF POST-CONSUMER RE24 CYCLED RESIN.—The term ‘taxable virgin plas25 tic resin’ shall not include any resin which has 


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1 been reprocessed from recovered material so it 

2 can be used for its original purpose or for other 

3 purposes in place of resin described in clause (i) 

4 of subparagraph (A). 

5 ‘‘(4) UNITED STATES.—The term ‘United 

6 States’ has the meaning given such term by section 

7 4612(a)(4). 

8 ‘‘(5) IMPORTER.—The term ‘importer’ means 

9 the person entering the taxable virgin plastic resin 

10 or covered item for consumption, use, or 

11 warehousing. 

12 ‘‘(b) FRACTION OF A POUND.—In the case of a frac13 tion of a pound, the tax imposed by section 4691 shall 

14 be the same fraction of the amount of such tax imposed 

15 on a whole pound. 

16 ‘‘(c) USE TREATED AS SALE.—If any applicable enti17 ty manufactures, produces, or imports any taxable virgin 

18 plastic resin and uses such resin, then such person shall 

19 be liable for tax under section 4691 in the same manner 

20 as if such resin were sold by such entity. 

21 ‘‘(d) REFUND OR CREDIT FOR CERTAIN USES.— 

22 Under regulations prescribed by the Secretary, if— 

23 ‘‘(1) a tax under section 4691(a)(1) was paid 

24 with respect to any taxable virgin plastic resin, and 


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1 ‘‘(2) such resin was used by any person in the 

2 manufacture or production within the United States 

3 of any product which is not a covered item, 

4 then an amount equal to the tax so paid shall be allowed 

5 as a credit or refund (without interest) to such person in 

6 the same manner as if it were an overpayment of tax im7 posed by such section. 

8 ‘‘(e) DISPOSITION OF REVENUES FROM PUERTO

9 RICO AND THE VIRGIN ISLANDS.—The provisions of sub10 sections (a)(3) and (b)(3) of section 7652 shall not apply 

11 to any tax imposed by section 4691. 

12 ‘‘(f) REGULATIONS.—The Secretary shall prescribe 

13 such regulations as may be necessary to carry out the pro14 visions of this subchapter.’’. 

15 (b) PLASTIC WASTE REDUCTION FUND.—Sub16 chapter A of chapter 98 of the Internal Revenue Code of 

17 1986 is amended by adding at the end the following new 

18 section: 

19 ‘‘SEC. 9512. PLASTIC WASTE REDUCTION FUND. 

20 ‘‘(a) ESTABLISHMENT AND FUNDING.—There is 

21 hereby established in the Treasury of the United States 

22 a trust fund to be referred to as the ‘Plastic Waste Reduc23 tion Fund’, consisting of such amounts as may be appro24 priated or credited to such trust fund as provided for in 

25 this section and section 9602(b). 


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1 ‘‘(b) TRANSFERS TO THE PLASTIC WASTE REDUC2 TION FUND.—There are hereby appropriated to the Plas3 tic Waste Reduction Fund amounts equivalent to the taxes 

4 received in the Treasury under section 4691 (minus any 

5 refunds or credits pursuant to section 4692(d)). 

6 ‘‘(c) EXPENDITURES FROM THE PLASTIC WASTE

7 REDUCTION FUND.—Amounts in the Plastic Waste Re8 duction Fund shall be available, as provided by appropria9 tion Acts, for making expenditures— 

10 ‘‘(1) to carry out reduction and recycling activi11 ties, including making improvements to recycling in12 frastructure, 

13 ‘‘(2) to carry out plastic waste and marine de14 bris reduction, detection, monitoring, and cleanup 

15 activities of— 

16 ‘‘(A) the grant programs established under 

17 section 302 of the Save Our Seas 2.0 Act (33 

18 U.S.C. 4282), 

19 ‘‘(B) the Marine Debris Program estab20 lished by section 3 of the Marine Debris Act 

21 (33 U.S.C. 1952), 

22 ‘‘(C) the Marine Debris Foundation estab23 lished by section 111 of the Save Our Seas 2.0 

24 Act (33 U.S.C. 4211), and 


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1 ‘‘(D) other Federal programs carrying out 

2 such activities, and 

3 ‘‘(3) to address environmental justice and pollu4 tion impacts from plastic production.’’. 

5 (c) CLERICAL AMENDMENTS.— 

6 (1) The table of subchapters for chapter 38 of 

7 the Internal Revenue Code of 1986 is amended by 

8 adding at the end the following new item: 

‘‘SUBCHAPTER E—TAX ON PLASTICS’’. 

9 (2) The table of sections for subchapter A of 

10 chapter 98 of such Code is amended by adding at 

11 the end the following new item: 

‘‘Sec. 9512. Plastic Waste Reduction Fund.’’. 

12 (d) EFFECTIVE DATE.—The amendments made by 

13 this section shall take effect on January 1, 2022. 

Æ 


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