[Federal Register Volume 59, Number 138 (Wednesday, July 20, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-17566]


[[Page Unknown]]

[Federal Register: July 20, 1994]


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DEPARTMENT OF THE TREASURY
 

Tax on Certain Imported Substances (Monochlorobenzene, 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 monochlorobenzene and ethyl chloride.

EFFECTIVE DATE: This modification is effective April 1, 1994.

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 July 12, 1994, the Secretary determined that monochlorobenzene 
and ethyl chloride should be added to the list of taxable substances in 
section 4672(a)(3), effective April 1, 1994.
    The rate of tax prescribed for monochlorobenzene, under section 
4671(b)(3), is $4.22 per ton. This is based upon a conversion factor 
for chlorine of 0.315 and a conversion factor for benzene of 0.6939.
    The rate of tax prescribed for ethyl chloride, under section 
4671(b)(3), is $2.29 per ton. This is based upon a conversion factor 
for ethylene of 0.4379 and a conversion factor for hydrochloric acid of 
0.5621.
    The petitioner is PPG Industries, Inc., a manufacturer and exporter 
of these substances. No material comments were received on these 
petitions. The following information is the basis for the 
determinations.

Monochlorobenzene

HTS number: 2903.61.10.00
CAS number: 108-90-7

    Monochlorobenzene is derived from the taxable chemicals chlorine 
and benzene. Monochlorobenzene is a liquid produced predominantly by 
the direct chlorination of benzene. The stoichiometric material 
consumption formula for monochlorobenzene is:

Cl2 (chlorine)+C6H6 (benzene) ----> C6H5Cl 
(monochlorobenzene)+HCl (hydrogen chloride)

    Monochlorobenzene 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.

Ethyl chloride

HTS number: 2903.11.00.20
CAS number: 75-00-3

    Ethyl chloride is derived from the taxable chemicals ethylene and 
hydrochloric acid. Ethyl chloride is a gas produced predominantly by 
the hydrochlorination of ethylene.
    The stoichiometric material consumption formula for ethyl chloride 
is:

C2H4 (ethylene)+HCl (hydrochloric acid) ----> 
C2H5Cl (ethyl chloride)

    Ethyl 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. 94-17566 Filed 7-19-94; 8:45 am]
BILLING CODE 4830-01-U