[Federal Register Volume 59, Number 102 (Friday, May 27, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-12909]


[[Page Unknown]]

[Federal Register: May 27, 1994]


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DEPARTMENT OF THE TREASURY
 

Tax on Certain Imported Substances; Notice of Determinations

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Notice.

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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 para-nitrophenol, ortho-nitrochlorobenzene, and para-
nitrochlorobenzene.

EFFECTIVE DATE: This modification is effective July 1, 1990.

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 May 23, 1994, the Secretary determined that para-nitrophenol, 
ortho-nitrochlorobenzene, and para-nitrochlorobenzene should be added 
to the list of taxable substances in section 4672(a)(3), effective July 
1, 1990.
    The rate of tax prescribed for para-nitrophenol, under section 
4671(b)(3), is $4.85 per ton. This is based upon a conversion factor 
for chlorine of 0.54, a conversion factor for benzene of 0.60, a 
conversion factor for sodium hydroxide of 0.75, a conversion factor for 
nitric acid of 0.47, and a conversion factor for sulfuric acid of 0.59.
    The rate of tax prescribed for ortho-nitrochlorobenzene, under 
section 4671(b)(3), is $3.89 per ton. This is based upon a conversion 
factor for chlorine of 0.47, a conversion factor for benzene of 0.52, 
and a conversion factor for nitric acid of 0.41.
    The rate of tax prescribed for para-nitrochlorobenzene, under 
section 4671(b)(3), is $3.89 per ton. This is based upon a conversion 
factor for chlorine of 0.47, a conversion factor for benzene of 0.52, 
and a conversion factor for nitric acid of 0.41.
    The petitioner is Monsanto Company, a manufacturer and exporter of 
these substances. No material comments were received on these 
petitions. The following information is the basis for the 
determinations.

Para-nitrophenol

HTS number: 2908.90.04.00
CAS number: 100-02-7

    Para-nitrophenol is derived from the taxable chemicals chlorine, 
benzene, sodium hydroxide, nitric acid, and sulfuric acid. Para-
nitrophenol is a solid produced predominantly by the reaction of para-
nitrochlorobenzene with aqueous sodium hydroxide, followed by reaction 
with sulfuric acid to form para-nitrophenol from the resulting para-
nitrophenoxide.
    The stoichiometric material consumption formula for para-
nitrophenol is:

Cl2 (chlorine)+C6H6 (benzene)+2 NaOH (sodium 
hydroxide)+HNO3 (nitric acid)+0.5 H2SO4 (sulfuric acid) 
 C6H5NO3 (p-nitrophenol)+NaCl (sodium 
chloride)+2 H2O (water)+0.5 Na2SO4 (sodium sulfate)+HCl 
(hydrogen chloride).

    Para-nitrophenol 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.

Ortho-nitrochlorobenzene

HTS number: 2903.69.00.00
CAS number: 88-73-3

    Ortho-nitrochlorobenzene is derived from the taxable chemicals 
chlorine, benzene, and nitric acid. Ortho-nitrochlorobenzene is a solid 
produced predominantly by the nitration of monochlorobenzene.
    The stoichiometric material consumption formula for ortho-
nitrochlorobenzene is:

Cl2 (chlorine)+C6H6 (benzene)+HNO3 (nitric acid) 
 C6H4ClNO2 (o-nitrochlorobenzene)+H2O 
(water)+HCl (hydrogen chloride)

    Ortho-nitrochlorobenzene 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.

Para-nitrochlorobenzene

HTS number: 2903.69.00.00
CAS number: 100-00-5

    Para-nitrochlorobenzene is derived from the taxable chemicals 
chlorine, benzene, and nitric acid. Para-nitrochlorobenzene is a solid 
produced predominantly by the nitration of monochlorobenzene.
    The stoichiometric material consumption formula for para-
nitrochlorobenzene is:

Cl2 (chlorine)+C6H6 (benzene)+HNO3 (nitric acid) 
 C6H4ClNO2 (p-nitrochlorobenzene)+H2O 
(water)+HCl (hydrogen chloride)

    Para-nitrochlorobenzene 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. 94-12909 Filed 5-26-94; 8:45 am]
BILLING CODE 4830-01-O