PERCHLOROETHYLENE IS ADDED TO LIST OF TAXABLE SUBSTANCES.

Notice 94-30

This notice announces a determination, under Notice 89-61-1, 1989-1 C.B. 717, that the list of taxable substances in section 4672(a)(3) of the Internal Revenue Code will be modified to include perchloroethylene. This modification is effective July 1, 1990.

BACKGROUND

Under section 4672(a) of the Code, an importer or exporter of any substance may request that the Secretary determine whether the 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 sets forth the rules relating to the determination process.

DETERMINATION

On March 5, 1990, the Secretary determined that perchloroethylene should be added to the list of taxable substances in section 4672(a)(3) of the Code, effective July 1, 1990.

The rate of tax prescribed for perchloroethylene under section 4671(b)(3), is $5.44 per ton. This is based upon a conversion factor for ethylene of 0.17 and a conversion factor for chlorine of 1.71.

The petitioner is Vulcan Chemicals, a manufacturer and exporter of this substance. No material comments were received on this petition. The following information is the basis for the determination.

Perchloroethylene

HTS number: 2903.23.00.00

The stoichiometric material consumption formula for perchloroethylene is:

  C2H4 (ethylene) + 4 Cl2 (chlorine) ------>

The principal author of this notice is Tyrone J. Montague of the Office of Assistant Chief Counsel (Passthroughs and Special Industries). For further information regarding this notice contact Tyrone J. Montague on (202) 622-3130 (not a toll-free call).