[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