94-5861. Tax on Certain Imported Substances; Notice of Determination; Bisphenol-A, Etc.

[Federal Register Volume 59, Number 49 (Monday, March 14, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-5861]


[[Page Unknown]]

[Federal Register: March 14, 1994]


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DEPARTMENT OF THE TREASURY
Internal Revenue Service

 

Tax on Certain Imported Substances; Notice of Determination; 
Bisphenol-A, Etc.

AGENCY: Internal Revenue Service, Treasury.

ACTION: Notice.

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SUMMARY: This notice announces a determination, under Notice 89-61, 
that the list of taxable substances in section 4672(a)(3) of the 
Internal Revenue Code will be modified to include bisphenol-A and 
alpha-methylstyrene.

EFFECTIVE DATE: This modification is effective July 1, 1990.

FOR FURTHER INFORMATION CONTACT: Tyrone J. Montague, Office of 
Assistant Chief Counsel (Passthroughs and Special Industries), (202) 
622-3130 (not a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

    Under section 4672(a) of the Internal Revenue Code, an importer or 
exporter of any substance may request that the Secretary determine 
whether such substance should be listed as a taxable substance. The 
Secretary shall add such substance to the list of taxable substances in 
section 4672(a)(3) if the Secretary determines that taxable chemicals 
constitute more than 50 percent of the weight, or more than 50 percent 
of the value, of the materials used to produce such substance. This 
determination is to be made on the basis of the predominant method of 
production. Notice 89-61, 1989-1 C.B. 717, sets forth the rules 
relating to the determination process.

Determination

    On March 5, 1990, the Secretary determined that bisphenol-A and 
alpha-methylstyrene should be added to the list of taxable substances 
in section 4672(a)(3) of the Internal Revenue Code, effective July 1, 
1990.
    The rate of tax prescribed for bisphenol-A, under section 
4671(b)(3), is $5.11 per ton. This is based upon a conversion factor 
for benzene of 0.68 and a conversion factor for propylene of 0.37.
    The rate of tax prescribed for alpha-methylstyrene, under section 
4671(b)(3), is $4.96 per ton. This is based upon a conversion factor 
for benzene of 0.66 and a conversion factor for propylene of 0.36.
    The petitioner is Aristech Chemical Corporation, a manufacturer and 
exporter of these substances. No material comments were received on 
these petitions. The following information is the basis for the 
determinations.

Bisphenol-A

HTS number: 2907.23.00.00
CAS number: 80-05-7

    Bisphenol-A is derived from the taxable chemicals benzene and 
propylene. Bisphenol-A is a solid produced predominantly by the acid 
catalyzed reaction of phenol with acetone.
    The stoichiometric material consumption formula for bisphenol-A is:

2 C6H6 (benzene) + 2 C3H6 (propylene) + 2 O1 
(oxygen) ----> C15H16O2 (bisphenol-A) + C3H6O 
(acetone) + H2O (water)

    Bisphenol-A has been determined to be a taxable substance because a 
review of its stoichiometric material consumption formula shows that, 
based on the predominant method of production, taxable chemicals 
constitute 78.9 percent by weight of the materials used in its 
production.

Alpha-methylstyrene

HTS number: 2902.90.00.00
CAS number: 98-83-9

    Alpha-methylstyrene is derived from the taxable chemicals benzene 
and propylene. Alpha-methylstyrene is a liquid produced predominantly 
as a byproduct from the cumene oxidation process for the production of 
phenol-acetone. The stoichiometric material consumption formula for 
alpha- methylstyrene is:

C6H6 (benzene) + C3H6 (propylene) + 0.5 O2 (oxygen) 
----> C9H10 (alpha-methylstyrene) + H2O (water)

    Alpha-methylstyrene has been determined to be a taxable substance 
because a review of its stoichiometric material consumption formula 
shows that, based on the predominant method of production, taxable 
chemicals constitute 88.2 percent by weight of the materials used in 
its production.
Dale D. Goode
Federal Register Liaison Officer Assistant Chief Counsel (Corporate).
[FR Doc. 94-5861 Filed 3-11-94; 8:45 am]
BILLING CODE 4830-01-U