95-12766. Tax on Certain Imported Substances; Definition of Substance

[Federal Register Volume 60, Number 100 (Wednesday, May 24, 1995)]
[Notices]
[Pages 27594-27595]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-12766]



-----------------------------------------------------------------------


DEPARTMENT OF THE TREASURY

Tax on Certain Imported Substances; Definition of Substance

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Notice.

----------------------------------------------------------------------- 
[[Page 27595]] 

SUMMARY: This notice modifies the definition of substance as that term 
relates to synthetic organic chemicals under Notice 89-61. It affects 
manufacturers and importers of taxable chemicals that are used in 
manufacturing taxable substances, and importers and exporters of those 
substances.

EFFECTIVE DATE: May 24, 1995.

FOR FURTHER INFORMATION CONTACT: Ruth Hoffman, Office of Assistant 
Chief Counsel (Passthroughs and Special Industries), [phone] 
(not a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

    Under section 4672(a), an importer or exporter of any substance may 
request that the Secretary determine whether that substance should be 
listed as a taxable substance. The Secretary shall add the 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 the 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. Under Notice 89-61, for synthetic organic 
chemicals the term substance excludes textile fibers, yarns, and 
staple, and fabricated products that are molded, formed, woven, or 
otherwise finished into end-use products.

Modification of Definition of Substance

    Certain polymers (resins) are initially produced as intermediate 
products in pellet, powder, or fiber form. Under Notice 89-61, a 
polymer in the form of pellet or powder, but not fiber, is eligible for 
listing as a taxable substance. This Notice modifies the definition of 
substance to include polymers extruded in fiber form.
Dale D. Goode,
Federal Register Liaison Officer, Assistant Chief Counsel (Corporate).
[FR Doc. 95-12766 Filed 5-23-95; 8:45 am]
BILLING CODE 4830-01-U