2022-28407. Superfund Chemical Substance Tax; Request To Modify List of Taxable Substances; Filing of Petition for Polyphenylene Sulfide

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 polyphenylene sulfide be added to the list of taxable substances under section 4672(a) of the Internal Revenue 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 February 28, 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-2022-0037 or polyphenylene sulfide) 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 Comments cannot be edited or withdrawn once submitted to the Federal eRulemaking Portal.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 Polyphenylene Sulfide), 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 polyphenylene sulfide to the list of taxable substances under section 4672(a) of the Internal Revenue Code 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: Polyphenylene sulfide.

According to the petition, these are the commonly used substance names for polyphenylene sulfide:

Polyphenylene sulfide

PPS

Poly(p-phenylenesulfide)

Benzene, 1,4-dichloro-, polymer with sodium sulfide

(2) Petitioner: Celanese Ltd., an exporter of polyphenylene sulfide.

(3) Proposed Classification Numbers:

HTSUS number: 3911.90.2500

Schedule B number: 3911.90.6100

CAS numbers: 25212-74-2, 26125-40-6

(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, polyphenylene sulfide is a high-performance thermoplastic, has high heat and chemical resistance, and is used in applications such as filters, appliance, machine and automobile parts, replacing steel in some cases.

In the final step, polyphenylene sulfide is manufactured by the polymerization of 1,4-dichlorobenzene (p-DCB), a taxable substance, with sodium hydrosulfide and sodium hydroxide. Sodium hydrosulfide is made from sodium hydroxide and hydrogen sulfide. Taxable chemicals constitute 90.0 percent by weight of the materials used to produce this substance.

(6) Process Identified in Petition as Predominant Method of Production of Substance:

Three separate reactions:

(A) 1,4 dichlorobenzene is made from the reaction of benzene with 2 equivalents of chlorine.

(B) Sodium hydrogen sulfide is made from the reaction of hydrogen sulfide with sodium hydroxide.

(C) 1,4-dichlorobenzene (p-dichlorobenzene, p-DCB), sodium hydrosulfide (NaSH), and sodium hydroxide (NaOH) are reacted at high temperature and high pressure to form polyphenylene sulfide and byproduct sodium chloride.

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

n [2 NaOH + C₆ H₆ + 2 Cl₂ + H₂ S ] → [phenylene sulfide]_n + 2n H₂ O + 2n NaCl

(8) Rate of Tax Calculated by Petitioner Based on Petitioner's Conversion Factors for Taxable Chemicals Used in Production of Substance: Rate of Tax: $14.50 per ton.

Conversion Factors:

0.74 for sodium hydroxide

0.72 for benzene

1.31 for chlorine

(9) Public Docket Number: IRS-2022-0037.

Stephanie Bland,

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