[Federal Register Volume 59, Number 59 (Monday, March 28, 1994)]
[Unknown Section]
[Page ]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-7152]
[Federal Register: March 28, 1994]
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DEPARTMENT OF THE TREASURY
Internal Revenue Service
Tax on Certain Imported Substances; 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 benzoic acid and
benzaldehyde.
EFFECTIVE DATE: This modification is effective July 1, 1993.
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 16, 1994, the Secretary determined that benzoic acid and
benzaldehyde should be added to the list of taxable substances in
section 4672(a)(3) of the Internal Revenue Code, effective July 1,
1993.
The rate of tax prescribed for benzoic acid, under section
4671(b)(3), is $3.67 per ton. This is based upon a conversion factor
for toluene of 0.7545.
The rate of tax prescribed for benzaldehyde, under section
4671(b)(3), is $4.22 per ton. This is based upon a conversion factor
for toluene of 0.8682.
The petitioner is Kalama Chemical Company, a manufacturer and
exporter of these substances. No material comments were received on
these petitions. The following information is the basis for the
determinations.
Benzoic Acid
HTS number: 2916.31.10.05
CAS number: 65-85-0
Benzoic acid is derived from the taxable chemical toluene. Benzoic
acid is a solid produced predominantly by the continuous liquid-phase
oxidation of toluene, using air as the oxygen source, in the presence
of a cobalt containing catalyst.
The stoichiometric material consumption formula for benzoic acid
is:
C7H8 (toluene) + 1.5 O2 (oxygen)---->
C7H6O2 (benzoic acid) + H2O (water)
Benzoic acid 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 65.7 percent by weight of the materials used in its
production.
Benzaldehyde
HTS number: 2912.21.00.00
CAS number: 100-52-7
Benzaldehyde is derived from the taxable chemical toluene.
Benzaldehyde is a liquid produced predominantly by as a co- product of
benzoic acid by the continuous liquid-phase oxidation of toluene, using
air as the oxygen source, in the presence of a cobalt containing
catalyst.
The stoichiometric material consumption formula for benzaldehyde
is:
C7H8 (toluene) + O2 (oxygen) ----> C7H6O
(benzaldehyde) + H2O (water)
Benzaldehyde 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 74.1 percent by weight of the materials used in its
production.
Dale D. Goode,
Federal Register Liaison Officer, Assistant Chief Counsel (Corporate).
[FR Doc. 94-7152 Filed 3-25-94; 8:45 am]
BILLING CODE 4830-01-U
