Supreme Court Rejects Excise Tax Credit for Exempt Materials

By a majority vote, the Supreme Court has reversed its prior position on the possibility for manufacturers to take federal excise tax (IPI) credits on purchases of materials zero-rated, exempt from, or non-taxed by IPI. The decision is important because for almost a decade taxpayers have relied on prior Supreme Court precedents that allowed such IPI credits. The amount of tax contingencies at stake is estimated in billions as taxpayers may have to pay back the government the IPI they have not paid in the last five years. (Extraordinary Appeal No. 353,657)