Ozone-Depleting Chemicals Tax on Form 720
Three different events can trigger the ozone depleting chemicals tax on Form 720: selling or using the chemical, selling or using an imported product made with it, and simply holding it in inventory on January 1. Each has its own IRS number and all three use Form 6627, Environmental Taxes. Ozone-depleting chemicals, or ODCs, are chemicals such as CFC-12 and Halon-1301. The rates are high per pound, and they differ sharply between the regular tax and the floor stocks tax, so the first job is working out which line is yours.
IRS Nos. 98, 19, and 20 compared
| IRS No. | What is taxed | Who is liable | When tax attaches | Form 720 part |
|---|---|---|---|---|
| 98 | The ODC itself | Manufacturer or importer | When first used or sold | Part I |
| 19 | Imported products made with or containing ODCs, if on the Imported Products Table | Importer | When first sold or used, or at entry if elected | Part I |
| 20 | ODCs held on January 1 for sale or use in further manufacturing | The title holder, other than the manufacturer or importer | On January 1 | Part II |
What are the 2026 ODC tax rates per pound?
These come from the January 2026 Form 6627 instructions. The IRS warns that the rates already use the ozone-depletion factor, so don't multiply by it again.
| Chemical | IRS No. 98 tax per pound | IRS No. 20 floor stocks per pound |
|---|---|---|
| CFC-11 | $19.30 | $0.45 |
| CFC-12 | $19.30 | $0.45 |
| CFC-113 | $15.44 | $0.36 |
| CFC-114 | $19.30 | $0.45 |
| CFC-115 | $11.58 | $0.27 |
| Halon-1211 | $57.90 | $1.35 |
| Halon-1301 | $193.00 | $4.50 |
| Halon-2402 | $115.80 | $2.70 |
| Carbon tetrachloride | $21.225 | $0.495 |
| Methyl chloroform | $1.925 | $0.045 |
| CFC-13, CFC-111, CFC-112, CFC-211 through CFC-217 | $19.30 | $0.45 |
Here's a made-up example for IRS No. 98. An importer sells 300 pounds of CFC-113 in a quarter: 300 times $15.44 is $4,632.00.
IRS No. 98: what counts as use, and what is exempt
You use an ODC when you put it into service in a trade or business or for the production of income, or use it in making an article. Loss, destruction, packaging, repackaging, or warehousing isn't a use. Creating a mixture containing an ODC is generally treated as a taxable use, unless you elect on Form 6627 to tax the sale or use of the mixture. That election can be revoked only with IRS consent.
Four areas may be exempt, per Pub. 510. Most need paperwork, so check the details before you skip the tax:
- Metered-dose inhalers: ODCs used or sold for use as propellants. Keep an exemption certificate from the purchaser.
- Recycled ODCs: those diverted or recovered in the United States as part of a recycling process.
- Exported ODCs: if requirements are met, including registration for you and the purchaser and an exemption certificate.
- Feedstock: an ODC entirely consumed in making another chemical. Use in a mixture doesn't qualify.
IRS No. 19: imported products
A product is taxed only if it's listed in the Imported Products Table in Regulations section 52.4682-3(f)(6), and the tax is based on the weight of ODCs used to make it. Pick a method in this order:
- Exact method: the weight of each ODC used, if you can support it.
- Table method: the ODC weight listed for the product.
- Value method: 1% of entry value, if neither of the above gives a weight.
For example (invented numbers), 1,000 imported units with an exact weight of 0.5 pounds of CFC-12 each: 1,000 times 0.5 times $19.30 is $9,650.00. Under the value method, products with a $200,000 entry value owe $2,000.00.
IRS No. 20: the floor stocks tax and its two dates
Floor stocks means inventory on hand. The tax falls on holders other than the manufacturer or importer, and it needs a January 1 inventory of taxable ODCs held for sale or further manufacturing. For 2026, you're liable if you hold any of these on January 1:
- At least 400 pounds of ODCs other than halons or methyl chloroform.
- At least 50 pounds of halons.
- At least 1,000 pounds of methyl chloroform.
Not everything counts. Excluded items include ODCs mixed with other ingredients that contribute to the mixture's purpose (unless only ODCs and stabilizers), ODCs in a manufactured article where they'll stay in the article, reclaimed or recycled ODCs, and those sold in a qualifying sale for feedstock, export, or inhaler use.
The dates are out of order compared with most taxes, because payment comes first:
| Step | Date | 2027 calendar |
|---|---|---|
| Take the inventory | January 1 | January 1, 2027 |
| Pay the tax (generally a single deposit) | June 30 | Wednesday, June 30, 2027 |
| Report on Form 6627 and Form 720, Part II | Return due July 31 | Monday, August 2, 2027, since July 31 is a Saturday |
Paying by the July 31 return is too late, since the payment date passed a month earlier. As an invented example at the 2026 rates, a distributor with 450 pounds of CFC-12 and 60 pounds of Halon-1301 on January 1 owes 450 times $0.45, which is $202.50, plus 60 times $4.50, which is $270.00. The total is $472.50.
Credits and filing these lines online
A credit or refund, without interest, may be claimed for a taxed ODC later used as an inhaler propellant, exported, or used as feedstock, with the claim going to the person Pub. 510 names for each case. On Schedule C, the references are CRN 398 for ODCs and CRN 349 for ODC tax on imported products.
When your Form 6627 figures are done, you can file Form 720 online with EasyFile720, an IRS-authorized e-file provider covering Part I and Part II categories and Schedules A and C. You enter your figures, the math is calculated for you, and validations catch common mistakes before you submit. An account is free to create, and you pay $39.95 when you file. If this is your only Form 720 of the year, that per-filing price is what applies. Our Form 720 due dates list the other quarters, and the online filing steps show what to prepare.
FAQ
Does the size of the can matter for floor stocks?▼
No. Pub. 510 says the chemicals are taxable regardless of the type or size of storage container, whether a 14-ounce can or a 30-pound tank. What matters is whether your January 1 holdings reach the pound thresholds.
What about ozone-depleting chemicals inside a finished product I hold?▼
Pub. 510 says the floor stocks tax is not imposed on ODCs contained in a manufactured article where they will be used for their intended purpose without being released from the article.
Is recycled refrigerant taxed?▼
Pub. 510 says there is no tax on an ODC diverted or recovered in the United States as part of a recycling process. Reclaimed or recycled ODCs are also outside the floor stocks tax.
What are the 2027 rates?▼
Our IRS sources give 2026 rates only, and the Form 6627 instructions say they are for tax year 2026. Check the current Form 6627 instructions before figuring a 2027 liability.
File Form 720 online
Create a free account with no credit card and build your return. You pay $39.95 only when you file. EasyFile720 is an IRS-authorized e-file provider, and you get an acknowledgment when the IRS accepts your return.
Sources: Instructions for Form 6627 (Rev. January 2026); Instructions for Form 720 (Rev. June 2026); Form 720 (Rev. June 2026); Pub. 510 (Rev. December 2025); IRS Form 720 Business Rules Publication 2026Q4 v1.0. General information, not tax advice. Confirm how the rules apply to you with a qualified advisor or the IRS.
