94-6376. Tax on Certain Imported Substances; Notice of Determination

[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: 94-6376]


[[Page Unknown]]

[Federal Register: March 18, 1994]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

 

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 acetylene black.

EFFECTIVE DATE: This modification is effective October 1, 1991.

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 acetylene black 
should be added to the list of taxable substances in section 4672(a)(3) 
of the Internal Revenue Code, effective October 1, 1991. However, if 
this substance is produced from acetylene derived from coal it is not a 
taxable substance.
    The rate of tax prescribed for acetylene black, under section 
4671(b)(3), is $5.50 per ton unless it is produced from acetylene 
derived from coal. This is based upon a conversion factor for acetylene 
of 1.13.
    The petitioner is Chevron Chemical 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: 2903.00.00.50
CAS number: 1333-86-4

    Acetylene black is derived from acetylene, a taxable chemical 
unless it is derived from coal. Acetylene black is a solid produced 
predominantly by direct thermal decomposition of acetylene.
    The stoichiometric material consumption formula for acetylene black 
is:

C2H2 (acetylene)----> 2 C (acetylene black) + 2 H (hydrogen)

    Acetylene black 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 100 percent by weight of the materials used in its 
production.
Dale D. Goode,
Federal Register Liaison Officer, Assistant Chief Counsel (Corporate).
[FR Doc. 94-6376 Filed 3-17-94; 8:45 am]
BILLING CODE 4830-01-U