[Federal Register Volume 59, Number 53 (Friday, March 18, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-6375]
[[Page Unknown]]
[Federal Register: March 18, 1994]
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DEPARTMENT OF THE TREASURY
Tax on Certain Imported Substances; Notice of Determination
AGENCY: Internal Revenue Service (IRS), 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 hexamethylenediamine.
EFFECTIVE DATE: This modification is effective April 1, 1992.
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 10, 1994, the Secretary determined that
hexamethylenediamine should be added to the list of taxable substances
in section 4672(a)(3) of the Internal Revenue Code, effective April 1,
1992.
The rate of tax prescribed for hexamethylenediamine, under section
4671(b)(3), is $3.82 per ton. This is based upon a conversion factor
for methane of 0.07, a conversion factor for ammonia of 0.38, and a
conversion factor for butadiene of 0.53.
The petitioner is Monsanto Company, a manufacturer and exporter of
this substance. No material comments were received on this petition.
The following information is the basis for the determination:
HTS number: 2921.22.00.00
CAS number: 124-09-4
Hexamethylenediamine is derived from the taxable chemicals methane,
ammonia, and butadiene. Hexamethylenediamine is a solid produced
predominantly by the reaction of hydrogen (derived from methane in
natural gas) with adiponitrile made by the reaction of butadiene with
hydrogen cyanide (derived from ammonia and from methane in natural
gas).
The stoichiometric material consumption formula for
hexamethylenediamine is:
3 CH4 (methane) + 2 NH3 (ammonia) + C4H6
(butadiene) + 3 O2 (oxygen) ----> C6H16N2
(hexamethylenediamine) + CO2 (carbon dioxide) + 4 H2O (water)
Hexamethylenediamine 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 58.6 percent by weight of the materials used in
its production.
Dale D. Goode,
Federal Register Liaison Officer, Assistant Chief Counsel (Corporate).
[FR Doc. 94-6375 Filed 3-17-94; 8:45 am]
BILLING CODE 4830-01-U
