[Federal Register Volume 65, Number 144 (Wednesday, July 26, 2000)]
[Notices]
[Pages 46046-46048]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-18818]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service


Tax on Certain Imported Substances (Polyether Polyols); 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 nine polyether polyol substances.

EFFECTIVE DATE: This modification is effective October 1, 1992.

FOR FURTHER INFORMATION CONTACT: Ruth Hoffman, Office of Associate 
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 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.

Determinations

    On July 14, 2000, the Secretary determined that nine polyether 
polyol substances should be added to the list of taxable substances in 
section 4672(a)(3), effective October 1, 1992.
    The rate of tax prescribed for poly(propylene)glycol, under section 
4671(b)(3), is $7.74 per ton. This is based upon a conversion factor 
for propylene of 0.781, a conversion factor for chlorine of 1.31, and a 
conversion factor for sodium hydroxide of 1.43.
    The rate of tax prescribed for poly(propylene/ethylene)glycol, 
under section 4671(b)(3), is $7.16 per ton. This is based upon a 
conversion factor for propylene of 0.663, a conversion factor for 
chlorine of 1.11, a conversion factor for sodium hydroxide of 1.21, and 
a conversion factor for ethylene of 0.123.
    The rate of tax prescribed for poly(propyleneoxy)glycerol, under 
section 4671(b)(3), is $6.38 per ton. This is based upon a conversion 
factor for propylene of 0.645, a conversion factor for chlorine of 
1.08, and a conversion factor for sodium hydroxide of 1.18.
    The rate of tax prescribed for poly(ethyleneoxy)glycerol, under 
section 4671(b)(3), is $3.31 per ton. This is based upon a conversion 
factor for ethylene of 0.681.
    The rate of tax prescribed for poly(propyleneoxy/
ethyleneoxy)glycerol, under section 4671(b)(3), is $7.20 per ton. This 
is based upon a conversion factor for propylene of 0.71, a conversion 
factor for chlorine of 1.05, a conversion factor for sodium hydroxide 
of 1.05, and a conversion factor for ethylene of 0.126.
    The rate of tax prescribed for poly(propyleneoxy)sucrose, under 
section 4671(b)(3), is $4.18 per ton. This is based upon a conversion 
factor for propylene of 0.423, a conversion factor for chlorine of 
0.707, and a conversion factor for sodium hydroxide of 0.773.
    The rate of tax prescribed for poly(propyleneoxy/
ethyleneoxy)sucrose, under section 4671(b)(3), is $6.11 per ton. This 
is based upon a conversion factor for propylene of 0.549, a conversion 
factor for chlorine of 0.918, a conversion factor for sodium hydroxide 
of 1.0, and a conversion factor for ethylene of 0.14.
    The rate of tax prescribed for poly(propyleneoxy/
ethyleneoxy)diamine, under section 4671(b)(3), is $4.92 per ton. This 
is based upon a conversion factor for propylene of 0.498, a conversion 
factor for chlorine of 0.833, and a conversion factor for sodium 
hydroxide of 0.91.
    The rate of tax prescribed for poly(propyleneoxy/
ethyleneoxy)benzenediamine, under section 4671(b)(3), is $5.25 per ton. 
This is based upon a conversion factor for propylene of 0.491, a 
conversion factor for chlorine of 0.821, a conversion factor for sodium 
hydroxide of 0.897, and a conversion factor for ethylene of 0.081.
    The petitioner is Dow Chemical Company, a manufacturer and exporter 
of these substances. No material comments were received on this 
petition. The following information is the basis for the 
determinations.

[[Page 46047]]

    The nine polyether polyol substances are liquids. They are produced 
predominantly by the base-catalyzed reaction of cyclic ethers, usually 
ethylene oxide and propylene oxide, with active hydrogen-containing 
compounds (initiators) such as water, glycols, polyols, and amines. The 
reaction is carried out by a discontinuous batch process at elevated 
temperatures and pressures and under an inert atmosphere. The 
particular substance produced depends upon the oxides, initiators, 
reaction conditions, and catalysts used. The stoichiometric amounts of 
oxide reacted on the initiator determine the chain lengths and thus the 
molecular weights. The HTS number for these substances is 3907.20.00.

Poly(propylene)glycol

CAS number: 025322-69-4
    Poly(propylene)glycol is derived from the taxable chemicals 
propylene, chlorine, and sodium hydroxide.
    The stoichiometric material consumption formula for this substance 
is: n+1(C3H6 (propylene) + Cl2 
(chlorine) + 2 NaOH (sodium hydroxide)) + H2O (water) 
 
C3H8O2(C3H6O)n
 (poly(propylene)glycol) + n+1(2 NaCl (sodium chloride) + 
H2O (water)).
    Poly(propylene)glycol 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 at least 90 percent by weight of the materials 
used in its production.

Poly(propylene/ethylene)glycol

CAS number: 053637-25-5
    Poly(propylene/ethylene)glycol is derived from the taxable 
chemicals propylene, chlorine, sodium hydroxide, and ethylene.
    The stoichiometric material consumption formula for this substance 
is: n+1(C3H6 (propylene) + Cl2 
(chlorine) + 2 NaOH (sodium hydroxide)) + H2O (water) + m/
2(2 C2H4 (ethylene) + O2 (oxygen)) 
 C3H8O2 
C3H6O)n(C2H4O)m
 (poly(propylene/ethylene)glycol) + n+1(2 NaCl (sodium chloride) + 
H2O (water))
    Poly(propylene/ethylene)glycol 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 at least 90 percent by weight of the 
materials used in its production.

Poly(propyleneoxy)glycerol

CAS number: 025791-96-2
    Poly(propyleneoxy)glycerol is derived from the taxable chemicals 
propylene, chlorine, and sodium hydroxide.
    The stoichiometric material consumption formula for this substance 
is: C3H8O3 (glycerine) + 
n(C3H6 (propylene) + Cl2 (chlorine) + 
2 NaOH (sodium hydroxide))  
C3H8O3(C3H6O)n
 (poly(propyleneoxy)glycerol) + n(2 NaCl (sodium chloride) + 
H2O (water))
    Poly(propyleneoxy)glycerol 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 at least 85 percent by weight of the 
materials used in its production.

Poly(ethyleneoxy)glycerol

CAS number: 031694-55-0
    Poly(ethyleneoxy)glycerol is derived from the taxable chemical 
ethylene.
    The stoichiometric material consumption formula for this substance 
is: C3H8O3 (glycerine) + m/2(2 
C2H4 (ethylene) + O2 (oxygen)) 
 
C3H8O3(C2H4O)m
 (poly(ethyleneoxy)glycerol)
    Poly(ethyleneoxy)glycerol 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 more than 50 percent by weight of the 
materials used in its production.

Poly(propyleneoxy/ethyleneoxy)glycerol

CAS number: 009082-00-2
    Poly(propyleneoxy/ethyleneoxy)glycerol is derived from the taxable 
chemicals propylene, chlorine, sodium hydroxide, and ethylene.
    The stoichiometric material consumption formula for this substance 
is C3H8O3 (glycerine) + 
n(C3H6 (propylene) + Cl2 (chlorine) + 
2 NaOH (sodium hydroxide)) + m/2(2 C2H4 
(ethylene) + O2 (oxygen))  
C3H8O3(C3H6O)n
(C2H4O)m (poly(propyleneoxy/
ethyleneoxy)glycerol) + n(2 NaCl (sodium chloride) + H2O 
(water))
    Poly(propyleneoxy/ethyleneoxy)glycerol 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 at least 85 percent by weight 
of the materials used in its production.

Poly(propyleneoxy)sucrose

CAS number: 009049-71-2
    Poly(propyleneoxy)sucrose is derived from the taxable chemicals 
propylene, chlorine, and sodium hydroxide.
    The stoichiometric material consumption formula for this substance 
is: C12H22O11(sucrose) + 
n(C3H6 (propylene) + Cl2 (chlorine) + 
2 NaOH (sodium hydroxide))  
C12H22O11(C3H6O)n
 (poly(propyleneoxy)sucrose) + n(2 NaCl (sodium chloride) + 
H2O (water))
    Poly(propyleneoxy)sucrose 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 at least 65 percent by weight of the 
materials used in its production.

Poly(propyleneoxy/ethyleneoxy)sucrose

CAS number: 026301-10-0
    Poly(propyleneoxy/ethyleneoxy)sucrose is derived from the taxable 
chemicals propylene, chlorine, sodium hydroxide, and ethylene.
    The stoichiometric material consumption formula for this substance 
is: C12H22O11 (sucrose) + 
n(C3H6 (propylene) + Cl2 (chlorine) + 
2 NaOH (sodium hydroxide))+ m/2(2 C2H4 (ethylene) 
+ O2 (oxygen))  
C12H22O11(C3H6O)n
(C2H4O)m (poly(propyleneoxy/
ethyleneoxy)sucrose) + n(2 NaCl (sodium chloride) + H2O 
(water))
    Poly(propyleneoxy/ethyleneoxy)sucrose 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 at least 75 percent by weight 
of the materials used in its production.

Poly(propyleneoxy/ethyleneoxy)diamine

CAS number: 031568-06-6
    Poly(propyleneoxy/ethyleneoxy)diamine is derived from the taxable 
chemicals propylene, chlorine, and sodium hydroxide.
    The stoichiometric material consumption formula for this substance 
is: C4H12N2O (aminoethylethanolamine) 
+ n(C3H6 (propylene) + Cl2 (chlorine) 
+ 2 NaOH (sodium hydroxide))  
C4H12N2O(C3H6O)n
 (poly(propyleneoxy/ethyleneoxy)diamine) + n(2 NaCl (sodium chloride) + 
H2O (water))
    Poly(propyleneoxy/ethyleneoxy)diamine 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

[[Page 46048]]

constitute at least 60 percent by weight of the materials used in its 
production.

Poly(propyleneoxy/ethyleneoxy)benzenediamine

CAS number: 067800-94-6
    The stoichiometric material consumption formula for this substance 
is: C7H10N2 (ortho-toluenediamine) + 
n(C3H6 (propylene) + Cl2 (chlorine) + 
2 NaOH (sodium hydroxide)) + m/2(2 C2H4 
(ethylene) + O2 (oxygen))  
C7H10N2(C3H6O)n
(C2H4O)m (poly(propyleneoxy/
ethyleneoxy)benzenediamine) + n(2 NaCl (sodium chloride) + 
H2O (water))
    Poly(propyleneoxy/ethyleneoxy)benzenediamine 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 at least 60 percent by weight 
of the materials used in its production.

Dale D. Goode,
Federal Register Liaison Officer, Office of Special Counsel 
(Modernization & Strategic Planning).
[FR Doc. 00-18818 Filed 7-25-00; 8:45 am]
BILLING CODE 4830-01-P