SERVICE ADDS HEXAMETHYLENEDIAMINE TO TAXABLE SUBSTANCES LIST.
Notice 94-33; 1994-1 C.B. 346
- Institutional AuthorsTreasury Department Internal Revenue Service
- Code Sections
- Subject Area/Tax Topics
- Index Termstoxics, imported, definitions and rules
- Jurisdictions
- LanguageEnglish
- Tax Analysts Document NumberDoc 59 F.R. 13038-13039
- Tax Analysts Electronic Citation1994 TNT 56-13
Notice 94-33
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 hexamethylenediamine.
EFFECTIVE DATE: This modification is effective April 1, 1992.
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 hexamethylenediamine should be added to the list of taxable substances in section 4672(a)(3) of the Internal Revenue Code, effective April 1, 1992.
The rate of tax prescribed for hexamethylenediamine, under section 4671(b)(3), is $3.82 per ton. This is based upon a conversation factor for methane of 0.07, a conversion factor for ammonia of 0.38, and a conversion factor for butadiene of 0.53.
The petitioner is Monsanto Company, 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: 2921.22.00.00
CAS number: 124-09-4
Hexamethylenediamine is derived from the taxable chemicals methane, ammonia, and butadiene. Hexamethylenediamine is a solid produced predominantly by the reaction of hydrogen (derived from methane in natural gas) with adiponitrile made by the reaction of butadiene with hydrogen cyanide (derived from ammonia and from methane in natural gas).
The stoichiometric material consumption formula for hexamethylenediamine is:
3 CH4 (methane) + 2 NH3 (ammonia) + C4H6 (butadiene) +
3 O2 (oxygen) ---> C6H16N2 (hexamethylenediamine) +
CO2 (carbon dioxide) + 4 H2O (water)
Hexamethylenediamine 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 58.6 percent by weight of the materials used in its production.
Dale D. Goode,
Federal Register Liaison Officer,
Assistant Chief Counsel
(Corporate)
- Institutional AuthorsTreasury Department Internal Revenue Service
- Code Sections
- Subject Area/Tax Topics
- Index Termstoxics, imported, definitions and rules
- Jurisdictions
- LanguageEnglish
- Tax Analysts Document NumberDoc 59 F.R. 13038-13039
- Tax Analysts Electronic Citation1994 TNT 56-13
