[Federal Register Volume 59, Number 130 (Friday, July 8, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-16483]


[[Page Unknown]]

[Federal Register: July 8, 1994]


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DEPARTMENT OF THE TREASURY
 

Tax on Certain Imported Substances (Polycarbonate); 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) will be 
modified to include polycarbonate.

EFFECTIVE DATE: This modification is effective July 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), 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 June 30, 1994, the Secretary determined that polycarbonate 
should be added to the list of taxable substances in section 
4672(a)(3), effective July 1, 1993.
    The rate of tax prescribed for polycarbonate, under section 
4671(b)(3), is $4.91 per ton. This is based upon a conversion factor 
for methane of 0.083, a conversion factor for chlorine of 0.276, a 
conversion factor for benzene of 0.614, a conversion factor for 
propylene of 0.165, and a conversion factor for sodium hydroxide of 
0.315.
    The petitioner is Miles Inc., 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: 3907.40.00.00
CAS number: 127133-67-9

    Polycarbonate is derived from the taxable chemicals methane, 
chlorine, benzene, propylene, and sodium hydroxide. Polycarbonate is a 
solid produced predominantly by the interfacial polycondensation 
reaction of the sodium salt solution of bisphenol-A in an aqueous phase 
and phosgene in an organic phase.
    The stoichiometric material consumption formula for polycarbonate 
is:

CH4 (methane)+C12 (chlorine)+2 C6H6 
(benzene)+C3H6 (propylene)+2 NaOH (sodium hydroxide)+3 
O2 (oxygen)  
O(C6H4)C(CH3)2(C6H4)OCO (polycarbonate)+5 
H2O (water)+2 NaCl (sodium chloride)

    Polycarbonate 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 79.1 percent by weight of the materials used in its 
production.
Dale D. Goode,
Federal Register Liaison Officer, Assistant Chief Counsel (Corporate).
[FR Doc. 94-16483 Filed 7-7-94; 8:45 am]
BILLING CODE 4830-01-U