[Federal Register Volume 60, Number 136 (Monday, July 17, 1995)]
[Notices]
[Pages 36459-36460]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-17381]



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DEPARTMENT OF THE TREASURY

Tax on Certain Imported Substances (Toluenediamine); 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 toluenediamine.

effective date: This modification is effective October 1, 1995.

for further information contact: Ruth Hoffman, Office of Assistant 
Chief Counsel (Passthroughs and Special Industries), (202) 622-3130 
(not a toll-free number). 

[[Page 36460]]


SUPPLEMENTARY INFORMATION:

Background

    Under section 4672(a), an importer or exporter of any substance may 
request that the Secretary determine whether that substance should be 
listed as a taxable substance. The Secretary shall add the 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 the 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 10, 1995, the Secretary determined that toluenediamine 
should be added to the list of taxable substances in section 
4672(a)(3), effective October 1, 1995.
    The rate of tax prescribed for toluenediamine, under section 
4671(b)(3), is $5.59 per ton. This is based upon a conversion factor 
for toluene of 0.78, a conversion factor for methane of 0.26, and a 
conversion factor for ammonia of 0.34.
    The petitioner is Air Products and Chemicals, 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: 2921.51.10
CAS number: 95-80-7, 823-40-5, 2687-25-4, and 496-72-0

    Toluenediamine is derived from the taxable chemicals toluene, 
methane, and ammonia and is a solid produced predominantly by a two-
step process. The first step is mixed-acid nitration of toluene to 
produce dinitrotoluene. The second step is the catalytic reaction of 
hydrogen and dinitrotoluene to produce toluenediamine.
    The stoichiometric material consumption formula for this substance 
is:

    C7H8 toluene+1.5 CH4 (methane)+ 2NH3 
(ammonia)+4 O2 (oxygen)  CH3C6H3 
(NH2)2 (toluenediamine)+5H2O) (water)+1.5 CO2 
(carbon dioxide)

    Toluenediamine 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 53.95 percent by weight of the materials used in 
its production.
Dale D. Goode,
Federal Register Liaison Officer, Assistant Chief Counsel (Corporate).
[FR Doc. 95-17381 Filed 7-14-95; 8:45 am]
BILLING CODE 4830-01-U-M