[Federal Register Volume 59, Number 53 (Friday, March 18, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-6377]
[[Page Unknown]]
[Federal Register: March 18, 1994]
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DEPARTMENT OF THE TREASURY
Tax on Certain Imported Substances; Notice of Determination
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Notice.
SUMMARY: This notice announces a determination, under Notice 89-61,
that the list of taxable substances in section 4672(a)(3) of the
Internal Revenue Code will be modified to include poly (69/31 ethylene/
cyclohexylenedimethylene terephthalate), poly (96.5/3.5 ethylene/
cyclohexylenedimethylene terephthalate), and poly (98.5/1.5 ethylene/
cyclohexylenedimethylene terephthalate).
EFFECTIVE DATE: This modification is effective October 1, 1990.
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) of the Internal Revenue Code, 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 March 10, 1994, the Secretary determined that poly (69/31
ethylene/cyclohexylenedimethylene terephthalate), poly (96.5/3.5
ethylene/cyclohexylenedimethylene terephthalate), and poly (98.5/1.5
ethylene/cyclohexylenedimethylene terephthalate) should be added to the
list of taxable substances in section 4672(a)(3) of the Internal
Revenue Code, effective October 1, 1990.
The rate of tax prescribed for poly (69/31 ethylene/
cyclohexylenedimethylene terephthalate), under section 4671(b)(3), is
$6.89 per ton before January 1, 1992, and $3.54 per ton for imported
poly (69/31 ethylene/cyclohexylenedimethylene terephthalate) first sold
or used after December 31, 1991. This is based upon a conversion factor
for xylene of 0.6372 and a conversion factor for ethylene of 0.0900.
The rate of tax prescribed for poly (96.5/3.5 ethylene/
cyclohexylenedimethylene terephthalate), under section 4671(b)(3), is
$6.36 per ton before January 1, 1992, and $3.41 per ton for imported
poly (96.5/3.5 ethylene/cyclohexylenedimethylene terephthalate) first
sold or used after December 31, 1991. This is based upon a conversion
factor for xylene of 0.5616 and a conversion factor for ethylene of
0.1398.
The rate of tax prescribed for poly (98.5/1.5 ethylene/
cyclohexylenedimethylene terephthalate), under section 4671(b)(3), is
$6.32 per ton before January 1, 1992, and $3.40 per ton for imported
poly (98.5/1.5 ethylene/cyclohexylenedimethylene terephthalate) first
sold or used after December 31, 1991. This is based upon a conversion
factor for xylene of 0.5554 and a conversion factor for ethylene of
0.1439.
The petitioner is Eastman Chemicals Division, Eastman Kodak
Company, a manufacturer and exporter of these substances. No material
comments were received on these petitions. The following information is
the basis for the determinations.
Poly (69/31 ethylene/cyclohexylenedimethylene terephthalate)
HTS number: 3907.60.00.90
CAS number: 26100-86-7
Poly (69/31 ethylene/cyclohexylenedimethylene terephthalate) is
derived from the taxable chemicals ethylene and xylene. Poly (69/31
ethylene/cyclohexylenedimethylene terephthalate), a solid, is produced
predominantly by reacting dimethyl terephthalate with ethylene glycol
and cyclohexanedimethanol. Dimethyl terephthalate is produced by the
air oxidation of p-xylene to yield terephthalic acid, and the acid is
subsequently esterified to the dimethyl ester with methanol. Ethylene
glycol is produced via reaction of ethylene with oxygen and water, and
cyclohexanedimethanol is produced via the hydrogenation of dimethyl
terephthalate.
The stoichiometric material consumption formula for Poly (69/31
ethylene/cyclohexylenedimethylene terephthalate) is:
131 C8H10 (xylene) + 70 C2H4 (ethylene) +
428 O2 (oxygen) + 70 H2O (water) + 217 H2
(hydrogen)----
>C2H6O2(C10H8O4)69(C16H1
8O4)31 (poly (69/31 ethylene/cyclohexylenedimethylene
terephthalate)) + 524 H2O (water)
Poly (69/31 ethylene/cyclohexylenedimethylene terephthalate) 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 50.7
percent by weight of the materials used in its production.
Poly (96.5/3.5 ethylene/cyclohexylenedimethylene terephthalate)
HTS number: 3907.60.00.90
CAS number: 26100-86-7
Poly (96.5/3.5 ethylene/cyclohexylenedimethylene terephthalate) is
derived from the taxable chemicals ethylene and xylene. Poly (96.5/3.5
ethylene/cyclohexylenedimethylene terephthalate), a solid, is produced
predominantly by reacting dimethyl terephthalate with ethylene glycol
and cyclohexanedimethanol. Dimethyl terephthalate is produced by the
air oxidation of p-xylene to yield terephthalic acid, and the acid is
subsequently esterified to the dimethyl ester with methanol. Ethylene
glycol is produced via reaction of ethylene with oxygen and water, and
cyclohexanedimethanol is produced via the hydrogenation of dimethyl
terephthalate.
The stoichiometric material consumption formula for Poly (96.5/3.5
ethylene/cyclohexylenedimethylene terephthalate) is:
103.5 C8H10 (xylene) + 97.5 C2H4 (ethylene)
+ 359.25 O2 (oxygen) + 97.5 H2O (water) + 24.5 H2
(hydrogen) ---->
C2H6O2(C10H8O4)96.5(C16H18O4
)3.5 (poly (96.5/3.5 ethylene/cyclohexylenedimethylene
terephthalate)) + 414 H2O (water)
Poly (96.5/3.5 ethylene/cyclohexylenedimethylene terephthalate) 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 50.7
percent by weight of the materials used in its production.
Poly (98.5/1.5 ethylene/cyclohexylenedimethylene terephthalate)
HTS number: 3907.60.00.90
CAS number: 26100-86-7
Poly (98.5/1.5 ethylene/cyclohexylenedimethylene terephthalate) is
derived from the taxable chemicals ethylene and xylene. Poly (98.5/1.5
ethylene/cyclohexylenedimethylene terephthalate), a solid, is produced
predominantly by reacting dimethyl terephthalate with ethylene glycol
and cyclohexanedimethanol. Dimethyl terephthalate is produced by the
air oxidation of p-xylene to yield terephthalic acid, and the acid is
subsequently esterified to the dimethyl ester with methanol. Ethylene
glycol is produced via reaction of ethylene with oxygen and water, and
cyclohexanedimethanol is produced via the hydrogenation of dimethyl
terephthalate.
The stoichiometric material consumption formula for Poly (98.5/1.5
ethylene/cyclohexylenedimethylene terephthalate) is:
101.5 C8H10 (xylene) + 99.5 C2H4 (ethylene)
+ 354.25 O2 (oxygen) + 99.5 H2O (water) + 10.5 H2
(hydrogen) ----
>C2H6O2(C10H8O4)98.5(C16H18O4
)1.5 (poly (98.5/1.5 ethylene/cyclohexylenedimethylene
terephthalate)) + 406 H2O (water)
Poly (98.5/1.5 ethylene/cyclohexylenedimethylene terephthalate) 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 50.7
percent by weight of the materials used in its production.
Dale D. Goode,
Federal Register Liaison Officer, Assistant Chief Counsel (Corporate).
[FR Doc. 94-6377 Filed 3-17-94; 8:45 am]
BILLING CODE 4830-01-U