[Federal Register Volume 59, Number 197 (Thursday, October 13, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-25248]


[[Page Unknown]]

[Federal Register: October 13, 1994]


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DEPARTMENT OF THE TREASURY
Internal Revenue Service

 

Tax on Certain Imported Substances (Dimethyl-2,6-Naphthalene 
Dicarboxylate); 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 dimethyl-2,6-naphthalene dicarboxylate.

EFFECTIVE DATE: This modification is effective April 1, 1995.

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 October 5, 1994, the Secretary determined that dimethyl-2,6-
naphthalene dicarboxylate should be added to the list of taxable 
substances in section 4672(a)(3), effective April 1, 1995.
    The rate of tax prescribed for dimethyl-2,6-naphthalene 
dicarboxylate, under section 4671(b)(3), is $5.97 per ton. This is 
based upon a conversion factor for xylene of 0.690, a conversion factor 
for butadiene of 0.390, and a conversion factor for methane of 0.208.
    The petitioner is Amoco Corporation, 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: 2917.39.50
CAS number: 840-65-3

    Dimethyl-2,6-naphthalene dicarboxylate is derived from the taxable 
chemicals xylene, butadiene, and methane. Dimethyl-2,6-naphthalene 
dicarboxylate is a solid produced predominantly by esterification of 
naphthalene dicarboxylic acid (2,6-NDA). 2,6-NDA is made by air 
oxidation of dimethyl naphthalene (2,6-DMN). 2,6-DMN is prepared via 
the alkenylation of orthoxylene acid butadiene.
    The stoichiometric material consumption formula for dimethyl-2,6-
naphthalene dicarboxylate is:

C8H10 (xylene) + C4H6 (butadiene) + 2 CH4 
(methane) + 4 O2 (oxygen) >> C14H12O4 (dimethyl-
2,6-naphthalene dicarboxylate) + 2 H2 (hydrogen) + 4 H20 
(water)

    Dimethyl-2,6-naphthalene dicarboxylate 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 60 percent by weight of the 
materials used in its production.
Dale D. Goode,
Federal Register Liaison Officer, Assistant Chief Counsel (Corporate).
[FR Doc. 94-25248 Filed 10-12-94; 8:45 am]
BILLING CODE 4830-01-U