[Federal Register Volume 59, Number 138 (Wednesday, July 20, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-17566]
[[Page Unknown]]
[Federal Register: July 20, 1994]
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Tax on Certain Imported Substances (Monochlorobenzene, et al.);
Notice of Determinations
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Notice.
-----------------------------------------------------------------------
SUMMARY: This notice announces determinations, under Notice 89-61, that
the list of taxable substances in section 4672(a)(3) will be modified
to include monochlorobenzene and ethyl chloride.
EFFECTIVE DATE: This modification is effective April 1, 1994.
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), 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 July 12, 1994, the Secretary determined that monochlorobenzene
and ethyl chloride should be added to the list of taxable substances in
section 4672(a)(3), effective April 1, 1994.
The rate of tax prescribed for monochlorobenzene, under section
4671(b)(3), is $4.22 per ton. This is based upon a conversion factor
for chlorine of 0.315 and a conversion factor for benzene of 0.6939.
The rate of tax prescribed for ethyl chloride, under section
4671(b)(3), is $2.29 per ton. This is based upon a conversion factor
for ethylene of 0.4379 and a conversion factor for hydrochloric acid of
0.5621.
The petitioner is PPG Industries, Inc., a manufacturer and exporter
of these substances. No material comments were received on these
petitions. The following information is the basis for the
determinations.
Monochlorobenzene
HTS number: 2903.61.10.00
CAS number: 108-90-7
Monochlorobenzene is derived from the taxable chemicals chlorine
and benzene. Monochlorobenzene is a liquid produced predominantly by
the direct chlorination of benzene. The stoichiometric material
consumption formula for monochlorobenzene is:
Cl2 (chlorine)+C6H6 (benzene) ----> C6H5Cl
(monochlorobenzene)+HCl (hydrogen chloride)
Monochlorobenzene 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.
Ethyl chloride
HTS number: 2903.11.00.20
CAS number: 75-00-3
Ethyl chloride is derived from the taxable chemicals ethylene and
hydrochloric acid. Ethyl chloride is a gas produced predominantly by
the hydrochlorination of ethylene.
The stoichiometric material consumption formula for ethyl chloride
is:
C2H4 (ethylene)+HCl (hydrochloric acid) ---->
C2H5Cl (ethyl chloride)
Ethyl chloride 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. 94-17566 Filed 7-19-94; 8:45 am]
BILLING CODE 4830-01-U
