Court Rejects Rockwell Appeal of Superfund Tax Ruling

In a setback to Rockwell International Corp., a federal appeals court in Washington ruled Tuesday that government contractors can’t be reimbursed for Superfund environmental cleanup taxes they paid in 1990 and earlier.

Rockwell had hoped to recover some of the $6 million in Superfund taxes it paid from 1988 to 1990.

When the Armed Services Board of Contract Appeals rejected its claim, it turned to the U.S. Court of Appeals for the Federal Circuit, which ruled unanimously against the Seal Beach-based company.

The Superfund tax, enacted in 1986, was imposed on corporations to defray hazardous waste cleanup expenses. The tax expired at the end of 1995.

In 1990, government regulations were changed to clarify that it was an excise tax. That allowed companies from 1991 on to recover Superfund tax payments as overhead costs on certain military contracts.

Rockwell had argued that pre-1991 Superfund taxes from such contracts also should have been recoverable. But the government maintained that in those early years, Congress had classified the Superfund tax as an income tax. Income taxes can’t be recovered as overhead.

The Rockwell operations involved are now part of Boeing Co.’s Boeing North American operations.

Bloomberg News contributed to this report.