Federal Register, Volume 61 Issue 61 (Thursday, March 28, 1996)

[Federal Register Volume 61, Number 61 (Thursday, March 28, 1996)]
[Notices]
[Pages 13919-13920]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-7608]



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DEPARTMENT OF THE TREASURY

Tax on Certain Imported Substances (Butyl Benzyl Phthalate); 
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 butyl benzyl phthalate.

EFFECTIVE DATE: This modification is effective April 1, 1991.

FOR FURTHER INFORMATION CONTACT: Ruth Hoffman, 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 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 March 22, 1996, the Secretary determined that butyl benzyl 
phthalate should be added to the list of taxable substances in section 
4672(a)(3), effective April 1, 1991.
    The rate of tax prescribed for butyl benzyl phthalate, under 
section 4671(b)(3), is $5.54 per ton. This is based upon a conversion 
factor for methane of 0.05, a conversion factor for propylene of 0.17, 
a conversion factor for xylene of 0.47, a conversion factor for toluene 
of 0.32, and a conversion factor for chlorine of 0.26.
    The petitioner is Monsanto Company, a manufacturer and exporter of 
this substance. No material comments were received on this petition. 
The following

[[Page 13920]]
information is the basis for the determination.

HTS number: 2917.39.2000
CAS number: 85-68-7

    Butyl benzyl phthalate is derived from the taxable chemicals 
methane, propylene, xylene, toluene, and chlorine and is a liquid 
produced predominantly by the reaction of n-butanol and phthalic 
anhydride, followed by a reaction with benzyl chloride in the presence 
of a catalyst. n-butanol is manufactured by the hydrogenation of n-
butyraldehyde, which is derived from propylene and synthesis gas 
(hydrogen and synthesis gas are derived from natural gas). Benzyl 
chloride is produced by direct photochemical chlorination of toluene. 
Phthalic anhydride is produced by the reaction of o-xylene with air in 
the presence of a catalyst.
    The stoichiometric material consumption formula for this substance 
is:

CH4 (methane)+C3H6 (propylene)+C8H10 
(xylene)+3 O2 (oxygen)+C7H8 (toluene)+Cl2 
(chlorine) -------->C19H20O^{4 (butyl benzyl phthalate)+2 
HCl (hydrochloric acid)+H2 (hydrogen)+2 H2O (water).
    Butyl benzyl phthalate 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 77.25 percent by weight of the materials 
used in its production.
Dale D. Goode,
Federal Register Liaison Officer, Assistant Chief Counsel (Corporate).
[FR Doc. 96-7608 Filed 3-27-96; 8:45 am]
BILLING CODE 4830-01-U}