Chlorofluorocarbon (CFC) Taxes at Distributor Inc.

The document describes how Distributor Inc., a large U.S. chemical distributor, managed the financial and relational effects of the 1990 federal Fluorocarbon Tax on freon. Because the company's accounting system could not separate wholesale unit costs from taxes, it faced customer suspicions regarding profit margins as the tax costs were passed through from manufacturers to end-users.

• The 1987 Montreal Protocol on Substances that Deplete the Ozone Layer called for a phase-out of the manufacture and use of chlorofluorocarbons (CFCs) due to scientific evidence that they decrease stratospheric ozone concentrations.
• In 1990, the United States implemented the federal Fluorocarbon Tax (IRC §4681), which initially taxed freon at $1.37 per pound, a cost that was passed from the manufacturer to Distributor Inc. and then to its customers.
• Distributor Inc. lacked an accounting system capable of separating wholesale unit costs from product taxes, leading to customer suspicions that the company was using the tax to increase profit margins.

APA

Stinson, C. H., & Soderstrom, N. (1997). Chlorofluorocarbon (CFC) Taxes at Distributor Inc. World Resources Institute. https://pdf.wri.org/bell/case_1-56973-235-3_full_version_english.pdf

Chicago

Stinson, Christopher H., and Naomi Soderstrom. Chlorofluorocarbon (CFC) Taxes at Distributor Inc. World Resources Institute, 1997. https://pdf.wri.org/bell/case_1-56973-235-3_full_version_english.pdf.

Wikipedia

{{cite report |last1=Stinson |first1=Christopher H. |last2=Soderstrom |first2=Naomi |title=Chlorofluorocarbon (CFC) Taxes at Distributor Inc. |publisher=World Resources Institute |date=1997 |url=https://pdf.wri.org/bell/case_1-56973-235-3_full_version_english.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{stinson1997chlorofluorocarbon, author = {Stinson, Christopher H. and Soderstrom, Naomi}, title = {{Chlorofluorocarbon (CFC) Taxes at Distributor Inc.}}, institution = {World Resources Institute}, year = {1997}, url = {https://pdf.wri.org/bell/case_1-56973-235-3_full_version_english.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }