[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: 94-7153]
[Federal Register: March 28, 1994]
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DEPARTMENT OF THE TREASURY
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 diphenylamine and
aniline.
EFFECTIVE DATE: This modification is effective January 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 diphenylamine and
aniline should be added to the list of taxable substances in section
4672(a)(3) of the Internal Revenue Code, effective January 1, 1993.
The rate of tax prescribed for diphenylamine, under section
4671(b)(3), is $5.11 per ton. This is based upon a conversion factor
for benzene of 1.010 and a conversion factor for nitric acid of 0.835.
The rate of tax prescribed for aniline, under section 4671(b)(3),
is $4.44 per ton. This is based upon a conversion factor for benzene of
0.8780 and a conversion factor for nitric acid of 0.7260.
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.
Diphenylamine
HTS number: 2921.44.00.00
CAS number: 122-39-4
Diphenylamine is derived from the taxable chemicals benzene and
nitric acid. Diphenylamine is a liquid produced predominantly by liquid
phase condensation of aniline over an acid catalyst. The stoichiometric
material consumption formula for diphenylamine is:
2 C6H6 (benzene) + 2 HNO3 (nitric acid) + 6 H2
(hydrogen) ----> C12H11N (diphenylamine) + NH3 (ammonia)
+ 6 H2O (water)
Diphenylamine 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 95.9 percent by weight of the materials used in its
production.
Aniline
HTS number: 2921.41.10.00
CAS number: 62-53-3
Aniline is derived from the taxable chemicals benzene and nitric
acid. Aniline is a liquid produced predominantly by the hydrogenation
of nitrobenzene.
The stoichiometric material consumption formula for aniline is:
C6H6 (benzene) + HNO3 (nitric acid) + 3 H2
(hydrogen) ----> C6H7N (aniline) + 3 H2O (water)
Aniline 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 95.9 percent by weight of the materials used in its
production.
Dale D. Goode,
Federal Register Liaison Officer, Assistant Chief Counsel (Corporate).
[FR Doc. 94-7153 Filed 3-25-94; 8:45 am]
BILLING CODE 4830-01-U
