[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: 94-16484]


[[Page Unknown]]

[Federal Register: July 8, 1994]


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DEPARTMENT OF THE TREASURY
 

Tax on Certain Imported Substances (Sodium Nitriolotriacetate 
Monohydrate, et al.); 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 sodium nitriolotriacetate monohydrate, diphenyl oxide, and 
tetrachlorophthalic anhydride.

EFFECTIVE DATE: This modification is effective April 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 sodium 
nitriolotriacetate monohydrate, diphenyl oxide, and tetrachlorophthalic 
anhydride should be added to the list of taxable substances in section 
4672(a)(3), effective April 1, 1993.
    The rate of tax prescribed for sodium nitriolotriacetate 
monohydrate, under section 4671(b)(3), is $2.45 per ton. This is based 
upon a conversion factor for methane of 0.24, a conversion factor for 
sodium hydroxide of 0.52, a conversion factor for propylene of 0.25, 
and a conversion factor for ammonia of 0.10.
    The rate of tax prescribed for diphenyl oxide, under section 
4671(b)(3), is $8.13 per ton. This is based upon a conversion factor 
for benzene of 1.05 and a conversion factor for propylene of 0.62.
    The rate of tax prescribed for tetrachlorophthalic anhydride, under 
section 4671(b)(3), is $5.87 per ton. This is based upon a conversion 
factor for chlorine of 1.22 and a conversion factor for xylene of 0.53.
    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.

Sodium nitriolotriacetate monohydrate

HTS number: 2922.49.60.00
CAS number: 18662-53-8

    Sodium nitriolotriacetate monohydrate is derived from the taxable 
chemicals methane, sodium hydroxide, propylene, and ammonia. Sodium 
nitriolotriacetate monohydrate is a solid produced predominantly by the 
reaction of formaldehyde with hydrogen cyanide in the presence of a 
catalyst, which is then further reacted with sodium hydroxide to 
produce sodium nitriolotriacetate monohydrate.
    The stoichiometric material consumption formula for sodium 
nitriolotriacetate monohydrate is:

3 CH4 (methane)+3 NaOH (sodium hydroxide)+C3H6 
(propylene)+NH3 (ammonia)+4.5 O2 (oxygen)  
N(CH2COONa)3H2O (sodium nitriolotriacetate 
monohydrate)+5 H2O (water)+3 H2 (hydrogen)

    Sodium nitriolotriacetate monohydrate 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 61.1 percent by weight of the 
materials used in its production.

Diphenyl oxide

HTS number: 2909.30.00.00
CAS number: 101-84-8

    Diphenyl oxide is derived from the taxable chemicals benzene and 
propylene. Diphenyl oxide is a solid produced predominantly by the 
catalytic condensation of phenol.
    The stoichiometric material consumption formula for diphenyl oxide 
is:

2 C6H6 (benzene)+2 C3H6 (propylene)+2 O2 
(oxygen)  C12H10O (diphenyl oxide)+2 C3H6O 
(acetone)+H2O (water)

    Diphenyl oxide 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 78.9 percent by weight of the materials used in 
its production.

Tetrachlorophthalic anhydride

HTS number: 2916.19.00.00
CAS number: 117-08-8

    Tetrachlorophthalic anhydride is derived from the taxable chemicals 
chlorine and xylene. Tetrachlorophthalic anhydride is a solid produced 
predominantly by the high temperature reaction of phthalic anhydride 
with chlorine. Phthalic anhydride is produced by the reaction of o-
xylene with air in the presence of a catalyst.
    The stoichiometric material consumption formula for 
tetrachlorophthalic anhydride is:

4 Cl2 (chlorine)+C8H10 (xylene)+3 O2 (oxygen) 
 C8Cl4O3 (tetrachlorophthalic anhydride)+3 
H2O (water) + 4 HCl (hydrogen chloride)

    Tetrachlorophthalic anhydride 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 80.0 percent by weight of the materials 
used in its production.
Dale D. Goode,
Federal Register Liaison Officer, Assistant Chief Counsel (Corporate).
[FR Doc. 94-16484 Filed 7-7-94; 8:45 am]
BILLING CODE 4830-01-U