2023-00948. Superfund Chemical Substance Tax; Request To Modify List of Taxable Substances; Filing of Petition for 4,4′-Isopropylidenediphenol-Epichlorohydrin Copolymer

AGENCY:

Internal Revenue Service (IRS), Treasury.

ACTION:

Notice of filing and request for comments.

SUMMARY:

This notice of filing announces that a petition has been filed pursuant to Revenue Procedure 2022-26, 2022-29 I.R.B. 90, requesting that 4,4′-Isopropylidenediphenol-Epichlorohydrin Copolymer be added to the list of taxable substances under section 4672(a) of the Internal Revenue Code (“Code”). This notice of filing also requests comments on the petition. This notice of filing is not a determination that the list of taxable substances is modified.

DATES:

Written comments and requests for a public hearing must be received on or before March 20, 2023.

ADDRESSES:

Commenters are encouraged to submit public comments or requests for a public hearing relating to this petition electronically via the Federal eRulemaking Portal at http://www.regulations.gov (indicate public docket number IRS-2022-0038 or 4,4′-Isopropylidenediphenol-Epichlorohydrin Copolymer) by following the online instructions for submitting comments. Comments cannot be edited or withdrawn once submitted to the Federal eRulemaking Portal. Alternatively, comments and requests for a public hearing may be mailed to: Internal Revenue Service, Attn: CC:PA:LPD:PR (Notice of Filing for 4,4′-Isopropylidenediphenol-Epichlorohydrin Copolymer), Room 5203, P.O. Box 7604, Ben Franklin Station, Washington DC 20044. All comments received are part of the public record and subject to public disclosure. All comments received will be posted without change to www.regulations.gov, including any personal information provided. You should submit only information that you wish to make publicly available. If a public hearing is scheduled, notice of the time and place for the hearing will be published in the Federal Register .

FOR FURTHER INFORMATION CONTACT:

Please contact Amanda F. Dunlap, [phone] (not a toll-free number).

SUPPLEMENTARY INFORMATION:

(a) Overview. The petition requesting the addition of 4,4′-Isopropylidenediphenol-Epichlorohydrin Copolymer to the list of taxable substances under section 4672(a) of the Code is based on weight and contains the information detailed in paragraph (b) of this document. The information is provided for public notice and comment pursuant to section 9 of Rev. Proc. 2022-26. The publication of petition content in this notice of filing does not constitute Department of the Treasury or Internal Revenue Service confirmation of the accuracy of the information published.

(b) Petition Content.

(1) Substance name: 4,4′-Isopropylidenediphenol-Epichlorohydrin Copolymer.

According to the petition, these are the chemical names of 4,4′-Isopropylidenediphenol-Epichlorohydrin Copolymer: Bisphenol A Epoxy Resin.

(2) Petitioner: Westlake Epoxy Inc., an exporter of 4,4′-Isopropylidenediphenol-Epichlorohydrin Copolymer.

(3) Proposed Classification Numbers:

HTSUS number: 3907.30.0000.

Schedule B number: 3907.30.0000.

CAS number: 25068-38-6.

(4) Petition Filing Date: December 20, 2022.

Petition filing date for purposes of section 11.02 of Rev. Proc. 2022-26: July 1, 2022.

(5) Brief Description of the Petition: According to the petition, 4,4′-Isopropylidenediphenol-Epichlorohydrin Copolymer is a Bisphenol A Epoxy Resin and is used for Epoxide Resin. 4,4′-Isopropylidenediphenol-Epichlorohydrin Copolymer is derived from the taxable chemicals benzene, propylene, chlorine, and sodium hydroxide and produced predominantly from epichlorohydrin and bisphenol-A via a two-step glycidation reaction sequence. Taxable chemicals comprise 92.98 percent of the final product.

(6) Process Identified in Petition as Predominant Method of Production of Substance: 4,4′-Isopropylidenediphenol-Epichlorohydrin Copolymer is derived from the taxable chemicals benzene, propylene, chlorine, and sodium hydroxide, and is produced predominantly from epichlorohydrin and bisphenol-A via a two-step glycidation reaction sequence. Epichlorohydrin is typically produced via an addition reaction of chlorine to propylene that yields allyl chloride and subsequently dichlorohydrin isomers, followed by a dehydrochlorination step in the presence of sodium hydroxide to yield epichlorohydrin. Bisphenol A is typically produced from the reaction of benzene and propylene that yields phenol and acetone. Under acidic conditions and with an appropriate catalyst, two units of phenol can react with one unit of acetone to yield Bisphenol A. With available epichlorohydrin and Bisphenol A, 4,4′-Isopropylidenediphenol-Epichlorohydrin Copolymer can be obtained through a two-step glycidation reaction sequence where epichlorohydrin is added to Bisphenol A (deprotonated with sodium hydroxide) and then water, sodium hydroxide, and sodium chloride are removed in a dehydrochlorination step.

(7) Stoichiometric Material Consumption Equation, Based on Process Identified as Predominant Method of Production:

2 C₆ H₆ (benzene) + 4 C₃ H₆ (propylene) + 4 Cl₂ (chlorine) + 6 NaOH (sodium hydroxide) + 2 O₂ (oxygen) → (CH₃)₂ C(C₆ H₄ OC₃ H₅ O)₂ (4,4′-Isopropylidenediphenol-Epichlorohydrin Copolymer) + CH₃ COCH₃ (acetone) + 2 HCl (hydrogen chloride) + 6 NaCl (sodium chloride) + 5 H₂ O (water)

(8) Rate of Tax Calculated by Petitioner Based on Petitioner's Conversion Factors for Taxable Chemicals Used in Production of Substance:

Rate of Tax: $14.13 per ton.

Conversion Factors:

0.46 for benzene

0.49 for propylene

0.83 for chlorine

0.71 for sodium hydroxide

(9) Public Docket Number: IRS-2022-0038.

Stephanie Bland,

Branch Chief (Passthroughs and Special Industries), IRS Office of Chief Counsel.