2024-03141. Superfund Tax on Chemical Substances; Request To Modify List of Taxable Substances; Correction to Filing of Petition for Polyphenylene Sulfide

AGENCY:

Internal Revenue Service (IRS), Treasury.

ACTION:

Supplemental notice of filing and additional request for comments.

SUMMARY:

This supplemental notice of filing announces a correction to the stoichiometric material consumption equation in the notice of filing for the polyphenylene sulfide petition that was published in the Federal Register on December 30, 2022. This supplemental notice of filing also requests comments on the corrected petition. This supplemental 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 April 15, 2024.

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 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 Comments cannot be edited or withdrawn once submitted to the Federal eRulemaking Portal.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:01:PR (Supplemental 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:

Camille Edwards Bennehoff at (202) 317–6855 (not a toll-free number).

Request To Add Substance to the List

(a) Overview.

A petition was filed pursuant to Rev. Proc. 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 (List). The notice of filing summarizing the polyphenylene sulfide petition and requesting comments was published in the Federal Register on December 30, 2022 (87 FR 80579). The Treasury Department and the IRS received no written comments in response to the original notice of filing and a public hearing was neither requested nor held. After the comment period for the notice of filing closed, an error was discovered in the stoichiometric material consumption equation for polyphenylene sulfide, and the Petitioner subsequently provided a corrected petition.

This supplemental notice of filing provides the corrected stoichiometric material consumption equation for polyphenylene sulfide in paragraph (b) of this document. The stoichiometric material consumption equation is corrected to read as follows:

on [2 NaOH + C₆ H₆ + 2 Cl₂ + H₂ S] → [C₆ H₄ S]_n + 2n H₂ O + 2n NaCl + 2n HCl

The other petition information provided in paragraph (b) of this document is unchanged from the original notice of filing for polyphenylene sulfide. Although the only change from the original notice of filing is to the stoichiometric material consumption equation, this document also includes all of the other information presented on the corrected petition to avoid confusion and is provided for public notice and comment pursuant to section 9 of Rev. Proc. 2022–26.

The petition requesting the addition of polyphenylene sulfide to the List is based on weight and—as noted previously—contains the information detailed in paragraph (b) of this document. The publication of petition information in this supplemental notice of filing is not a determination and does not constitute Treasury Department or IRS confirmation of the accuracy of the information published.

Pursuant to section 10.02 of Rev. Proc. 2022–26, the IRS and Petitioner agreed to extend the 180-day determination period.

(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:

(i) HTSUS number: 3911.90.2500.

(ii) Schedule B number: 3911.90.6100.

(iii) CAS numbers: 25212–74–2, 26125–40–6

(4) Petition filing dates:

(i) Petition filing date for purposes of making a determination: December 20, 2022.

(ii) Petition filing date for purposes of section 11.02 of Rev. Proc. 2022–26: July 1, 2022.

(5) Description from 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 of the production process, 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] → [C₆ H₄ S]_n + 2n H₂ O + 2n NaCl + 2n HCl

(8) Tax rate calculated by Petitioner, based on Petitioner's conversion factors for taxable chemicals used in production of substance:

(i) Tax rate: $14.50 per ton.

(ii) Conversion factors: 0.74 for sodium hydroxide, 0.72 for benzene, 1.31 for chlorine.

(9) Public docket number: IRS–2022–0037.

Michael Beker,

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