[Federal Register Volume 89, Number 157 (Wednesday, August 14, 2024)]
[Notices]
[Pages 66175-66176]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-18050]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service


Superfund Tax on Chemical Substances; Request To Modify List of 
Taxable Substances; Correction to Filing of Petition for Nylon 6

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Supplemental notice of filing and additional request for 
comments.

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SUMMARY: This supplemental notice of filing announces a correction to 
the stoichiometric material consumption equation in the notice of 
filing for the nylon 6 petition that was published in the Federal 
Register on February 22, 2024. This supplemental notice of filing also 
requests comments on the corrected petition. This supplemental notice 
of filing is not a determination that the list of taxable substances is 
modified.

DATES: Written comments and requests for a public hearing must be 
received on or before October 15, 2024.

ADDRESSES: Commenters are encouraged to submit public comments or 
requests for a public hearing relating to this petition electronically 
via the Federal eRulemaking Portal at http://www.regulations.gov gov 
(indicate public docket number IRS-2024-0005 or nylon 6) by following 
the online instructions for submitting comments. Comments cannot be 
edited or withdrawn once submitted to the Federal eRulemaking Portal. 
Alternatively, comments and requests for a public hearing may be mailed 
to: Internal Revenue Service, Attn: CC:PA:LPD:PR (Supplemental Notice 
of Filing for Nylon 6), Room 5203, P.O. Box 7604, Ben Franklin Station, 
Washington, DC 20044. All comments received are part of the public 
record and subject to public disclosure. All comments received will be 
posted without change to www.regulations.gov, including any personal 
information provided. You should submit only information that you wish 
to make publicly available. If a public hearing is scheduled, notice of 
the time and place for the hearing will be published in the Federal 
Register.

FOR FURTHER INFORMATION CONTACT: Camille Edwards Bennehoff at (202) 
317-6855 (not a toll-free number).

SUPPLEMENTARY INFORMATION:

Request To Add Substance to the List

    (a) Overview.
    A petition was filed pursuant to Rev. Proc. 2022-26 (2022-29 I.R.B. 
90), requesting that nylon 6 be added to the list of taxable substances 
under section 4672(a) of the Internal Revenue Code (List). The notice 
of filing summarizing the nylon 6 petition and requesting comments was 
published in the Federal Register on February 22, 2024 (89 FR 
13399)(original notice of filing). The Treasury Department and the IRS 
received no written comments in response to the original notice of 
filing and a public hearing was neither requested nor held. After the 
comment period for the original notice of filing closed, an error was 
discovered in the stoichiometric material consumption equation for 
nylon 6, and the petitioner subsequently provided a corrected petition.
    This supplemental notice of filing provides the corrected 
stoichiometric material consumption equation for nylon 6 in paragraph 
(b) of this document. The stoichiometric material consumption equation 
is corrected to read as follows:

nC6H6 (benzene) + nC3H6 
(propylene) + 2.5nO2 (oxygen) + 0.5nCH4 (methane) 
+ 5nNH3 (ammonia) + 2nH2O (water) + 
2nSO2 (sulfur dioxide) [rarr] 
(C6H11NO)n (nylon 6) + 
nC3H6O (acetone) + 
2n(NH4)2SO4 (ammonium sulfate) + 0.5n 
CO2 (carbon dioxide)

    The other petition information provided in paragraph (b) of this 
document is unchanged from the original notice of filing for nylon 6. 
Although the only change from the original notice of filing is to the 
stoichiometric material consumption equation, this document also 
includes all of the other information presented on the corrected 
petition to avoid confusion and is provided for public notice and 
comment pursuant to section 9 of Rev. Proc. 2022-26.
    The petition requesting the addition of nylon 6 to the List is 
based on weight and--as noted previously--contains the information 
detailed in paragraph (b) of this document. The publication of petition 
information in this supplemental notice of filing is not a 
determination and does not constitute Treasury Department or IRS 
confirmation of the accuracy of the information published.

[[Page 66176]]

    Pursuant to section 10.02 of Rev. Proc. 2022-26, the IRS and 
Petitioner agreed to extend the 180-day determination period.
    (b) Petition Content.
    (1) Substance name: Nylon 6.
    (2) Petitioner: AdvanSix Inc., an exporter of nylon 6.
    (3) Proposed classification numbers:
    (i) HTSUS number: 3908.10.00.
    (ii) Schedule B number: 3908.10.0000.
    (iii) CAS number: 25038-54-4.
    (4) Petition filing dates:
    (i) Petition filing date for purposes of making a determination: 
November 8, 2023.
    (ii) Petition filing date for purposes of section 11.02 of Rev. 
Proc. 2022-26: July 1, 2022.
    (5) Description from petition: According to the petition, nylon 6, 
or poly(caprolactam), is a semicrystalline polyamide that has broad use 
in textile fibers, engineering plastics, food packaging films, and 
monofilaments. The number ``6'' in nylon 6 refers to the number of 
carbon atoms in each polymeric repeat unit. Nylon 6 may be utilized 
neat or with functional additives by melt processing into the desired 
final form.
    Nylon 6 is made from benzene, propylene, ammonia, methane, and 
sulfuric acid; however, sulfuric acid is cancelled from the 
stoichiometric material consumption equation due to no net consumption/
production. Taxable chemicals constitute 46.64 percent by weight of the 
materials used to produce this substance.
    (6) Process identified in petition as predominant method of 
production of substance: The predominant method of production of nylon 
6 is the ``hydrolytically initiated ring-opening polymerization of 
caprolactam'' which is also referred to in industry literature as the 
``hydrolytic polymerization of nylon 6.'' This process is termed 
``hydrolytic'' because water plays a key role in the chemical 
mechanism. Nylon 6 is produced almost exclusively through this method 
because it is easier to control and better adapted for large-scale 
operations.
    The hydrolytic polymerization of nylon 6 generally entails heating 
a mixture of caprolactam and water to ~270[deg]C in an inert atmosphere 
of nitrogen and holding until equilibrium conditions are achieved. The 
three principal reactions in this process are summarized below:
    1. In the initiation step of the process, the caprolactam ring is 
hydrolyzed via ring opening with the addition of one water molecule to 
become amino-caproic acid.
    2. In the next step of the mechanism, the amino-caproic acid acts 
as the initiating species to begin the addition polymerization by ring-
opening of caprolactam.
    3. The last major mechanism step of the hydrolytic polymerization 
of nylon 6 is the condensation of primary amine and carboxylic acid 
chain-ends to form an amide linkage in the now higher molecular weight 
polyamide with the simultaneous loss of a water molecule.
    (7) Stoichiometric material consumption equation, based on process 
identified as predominant method of production:

nC6H6 (benzene) + nC3H6 
(propylene) + 2.5nO2 (oxygen) + 0.5nCH4 (methane) 
+ 5nNH3 (ammonia) + 2nH2O (water) + 
2nSO2 (sulfur dioxide) [rarr] 
(C6H11NO)n (nylon 6) + 
nC3H6O (acetone) + 
2n(NH4)2SO4 (ammonium sulfate) + 0.5n 
CO2 (carbon dioxide)

    (8) Tax rate calculated by Petitioner, based on Petitioner's 
conversion factors for taxable chemicals used in production of 
substance:
    (i) Tax rate: $14.77 per ton.
    (ii) Conversion factors: 0.69 for benzene; 0.37 for propylene; 0.75 
for ammonia; 0.07 for methane.
    (9) Public docket number: IRS-2024-0005.

Michael Beker,
Senior Counsel (Passthroughs and Special Industries), IRS Office of 
Chief Counsel.
[FR Doc. 2024-18050 Filed 8-13-24; 8:45 am]
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