[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: 94-12910]


[[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 epichlorohydrin and allyl chloride.

EFFECTIVE DATE: This modification is effective October 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), 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 epichlorohydrin and 
allyl chloride should be added to the list of taxable substances in 
section 4672(a)(3), effective October 1, 1992.
    The rate of tax prescribed for epichlorohydrin, under section 
4671(b)(3), is $8.58 per ton. This is based upon a conversion factor 
for propylene of 0.61 , a conversion factor for chlorine of 1.98, and a 
conversion factor for sodium hydroxide of 0.96.
    The rate of tax prescribed for allyl chloride, under section 
4671(b)(3), is $6.45 per ton. This is based upon a conversion factor 
for propylene of 0.66 and a conversion factor for chlorine of 1.20.
    The petitioner is Dow Chemical 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.

Epichlorohydrin

HTS number: 2910.30.00.00
CAS number: 106-89-8

    Epichlorohydrin is derived from the taxable chemicals propylene, 
chlorine, and sodium hydroxide. Epichlorohydrin is a liquid produced 
predominantly by the chlorohydration of allyl chloride, which is 
obtained by chlorination of propylene, followed by the 
hydrochlorination of the formed dichlorohydrin.
    The stoichiometric material consumption formula for epichlorohydrin 
is:

C3H6 (propylene)+2 Cl2 (chlorine)+NaOH (sodium 
hydroxide)  C3H5ClO (epichlorohydrin)+2 HCl 
(hydrogen chloride)+NaCl (sodium chloride)

    Epichlorohydrin 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.

Allyl chloride

HTS number: 2903.29.00.00
CAS number: 107-05-1

    Allyl chloride is derived from the taxable chemicals propylene and 
chlorine. Allyl chloride is a liquid produced predominantly by 
noncatalytic flow-pressure, high temperature chlorination of propylene.
    The stoichiometric material consumption formula for allyl chloride 
is:

C3H6 (propylene)+Cl2 (chlorine)  
C3H5Cl (allyl chloride)+HCl (hydrogen chloride)

    Allyl 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. 94-12910 Filed 5-26-94; 8:45 am]
BILLING CODE 4830-01-U