[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: 94-6375]


[[Page Unknown]]

[Federal Register: March 18, 1994]


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DEPARTMENT OF THE TREASURY
 

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 hexamethylenediamine.

EFFECTIVE DATE: This modification is effective April 1, 1992.

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 
hexamethylenediamine should be added to the list of taxable substances 
in section 4672(a)(3) of the Internal Revenue Code, effective April 1, 
1992.
    The rate of tax prescribed for hexamethylenediamine, under section 
4671(b)(3), is $3.82 per ton. This is based upon a conversion factor 
for methane of 0.07, a conversion factor for ammonia of 0.38, and a 
conversion factor for butadiene of 0.53.
    The petitioner is Monsanto 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: 2921.22.00.00
CAS number: 124-09-4

    Hexamethylenediamine is derived from the taxable chemicals methane, 
ammonia, and butadiene. Hexamethylenediamine is a solid produced 
predominantly by the reaction of hydrogen (derived from methane in 
natural gas) with adiponitrile made by the reaction of butadiene with 
hydrogen cyanide (derived from ammonia and from methane in natural 
gas).
    The stoichiometric material consumption formula for 
hexamethylenediamine is:

    3 CH4 (methane) + 2 NH3 (ammonia) + C4H6 
(butadiene) + 3 O2 (oxygen) ----> C6H16N2 
(hexamethylenediamine) + CO2 (carbon dioxide) + 4 H2O (water)

    Hexamethylenediamine 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 58.6 percent by weight of the materials used in 
its production.
Dale D. Goode,
Federal Register Liaison Officer, Assistant Chief Counsel (Corporate).
[FR Doc. 94-6375 Filed 3-17-94; 8:45 am]
BILLING CODE 4830-01-U