[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: 94-12912]


[[Page Unknown]]

[Federal Register: May 27, 1994]


-----------------------------------------------------------------------

DEPARTMENT OF THE TREASURY
Internal Revenue Service

 

Tax on Certain Imported Substances; 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 di-n-hexyl adipate, ortho-dichlorobenzene, and para-
dichlorobenzene.

EFFECTIVE DATE: This modification is effective October 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 di-n-hexyl adipate, 
ortho-dichlorobenzene, and para-dichlorobenzene should be added to the 
list of taxable substances in section 4672(a)(3), effective October 1, 
1990.
    The rate of tax prescribed for di-n-hexyl adipate, under section 
4671(b)(3), is $4.67 per ton. This is based upon a conversion factor 
for ethylene of 0.58, a conversion factor for methane of 0.05, a 
conversion factor for benzene of 0.33, and a conversion factor for 
nitric acid of 0.29.
    The rate of tax prescribed for ortho-dichlorobenzene, under section 
4671(b)(3), is $5.55 per ton. This is based upon a conversion factor 
for benzene of 0.57 and a conversion factor for chlorine of 1.03.
    The rate of tax prescribed for para-dichlorobenzene, under section 
4671(b)(3), is $5.55 per ton. This is based upon a conversion factor 
for benzene of 0.57 and a conversion factor for chlorine of 1.03.
    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.

Di-n-hexyl adipate

HTS number: 2917.39.20.00
CAS number: 110-33-8

    Di-n-hexyl adipate is derived from the taxable chemicals ethylene, 
methane, benzene, and nitric acid. Di-n-hexyl adipate is a liquid 
produced predominantly by reaction of n-hexyl alcohol with adipic acid 
in the presence of a catalyst. N-hexyl alcohol is produced from 
aluminum, natural gas (via hydrogen), and ethylene (via 
triethylaluminum). Oxidation of the intermediate mixed trialkylaluminum 
with air produces a mixed aluminum alkoxide, which is hydrolyzed to 
produce a mixture of alcohols, from which n-hexyl alcohol is recovered 
by distillation. Adipic acid is produced from benzene (via cyclohexane) 
and the methane in natural gas (via hydrogen). Oxidation of cyclohexane 
using air and nitric acid in a two-step process produces adipic acid.
    The stoichiometric material consumption formula di-n-hexyl adipate 
is:

6 C2H4 (ethylene) + 1.5 CH4 (methane) + C6H6 
(benzene) + 2.33 HNO3 (nitric acid) + 2.83 H2O (water) + 1.75 
O2 (oxygen) + 0.67 Al (aluminum) + 2.02 H2 (hydrogen) 
 C18H34O4 (di-n-hexyl adipate) + 3 H2 
(hydrogen) + 1.5 CO2 (carbon dioxide) + 2.33 NO (nitric oxide) + 2 
H2O (water) + 0.67 AlH3O3 (aluminum hydroxide)

    Di-n-hexyl adipate 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 76.6 percent by weight of the materials used in 
its production.

Ortho-dichlorobenzene

HTS number: 2903.61.20.00
CAS number: 95-50-1

    Ortho-dichlorobenzene is derived from the taxable chemicals benzene 
and chlorine. Ortho-dichlorobenzene is a liquid produced predominantly 
by the reaction of chlorine with benzene.
    The stoichiometric material consumption formula ortho-
dichlorobenzene is:

C6H6 (benzene) + 2 C12 (chlorine)  
C6H4C12 (o-dichlorobenzene) + 2 HCl (hydrogen chloride)

    Ortho-dichlorobenzene 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-dichlorobenzene

HTS number: 2903.61.30.00
CAS number: 106-46-7

    Para-dichlorobenzene is derived from the taxable chemicals benzene 
and chlorine. Para-dichlorobenzene is a solid produced predominantly by 
the reaction of chlorine with benzene.
    The stoichiometric material consumption formula for para-
dichlorobenzene is:

C6H6 (benzene) + 2 C12 (chlorine)  
C6H4C12 (p-dichlorobenzene) + 2 HCl (hydrogen chloride)

    Para-dichlorobenzene 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. 94-12912 Filed 5-26-94; 8:45 am]
BILLING CODE 4830-01-U