SERVICE ADDS TO LIST OF SUPERFUND TAXABLE SUBSTANCES.

Notice 90-50

SUMMARY: This notice announces a determination, under Notice 89-61, 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 BUTYL ACRYLATE, METHYL ACRYLATE, ETHYL ACRYLATE, AND 2-ETHYLHEXYL ACRYLATE.

EFFECTIVE DATE: This modification is effective as of July 1, 1990.

FOR FURTHER INFORMATION CONTACT: Ruth Hoffman, Office of Assistant Chief Counsel (Passthroughs and Special Industries), 202- 566-4475 (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 5, 1990, the Secretary determined that butyl acrylate, methyl acrylate, ethyl acrylate, and 2-ethylhexyl acrylate should be added to the list of taxable substances in section 4672(a)(3) of the Internal Revenue Code, effective as of July 1, 1990.

The petitions to add butyl acrylate, methyl acrylate, ethyl acrylate, and 2-ethylhexyl acrylate were submitted by Hoechst Celanese, manufacturer and exporter of these substances. No material comments were received on these petitions.

BUTYL ACRYLATE

Butyl acrylate 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 67.6 percent by weight of the materials used in its production.

HTS number: 2916.12.50.30

The stoichiometric material consumption formula for this substance is:

         2 C3H6 + 1.5 O2 + CH4 --------> CH2CHCOOC4H9+H2+H2O

METHYL ACRYLATE

Methyl acrylate 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 54.7 percent by weight of the materials used in its production.

HTS number: 2916.12.50.20

The stoichiometric material consumption formula for this substance is:

C3H6 + 1.5 O2 + CH4 --------> CH2CHCOOCH3 + H2 + H2O propylene oxygen methane methyl acrylate hydrogen water

The rate of tax prescribed for this substance, under section 4671(b)(3), is $4.29 per ton. This is based upon a conversion factor for propylene of 0.5534 and a conversion factor for methane of 0.463.

ETHYL ACRYLATE

Ethyl acrylate 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 59.3 percent by weight of the materials used in its production.

HTS number: 2916.12.50.10

The stoiciometric material consumption formula for this substance is:

C3H6 + 1.5 O2 + C2H4 ------->CH2CHCOOCH2CH3 + H2O propylene oxygen ethylene ethyl acrylate water

The rate of tax prescribed for this substance, under section 4671(b)(3), is $3.85 per ton. This is based upon a conversion factor for propylene of 0.4861 and a conversion factor for ethylene of 0.3039.

2-ETHYLHEXYL ACRYLATE

2-ethylhexyl acrylate 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 76.7 percent by weight of the materials used in its production.

HTS number: 2916.12.50.40

The stoichiometric material consumption formula for this substance is:

3 C2H6 + 1.5 O2 + 2 CH4 ----->CH2CHCOOCH2CHC2H5C4H9 + H2O + 2 H2 propylene oxygen methane 2-ethylhexyl acrylate water hydrogen

The rate of tax prescribed for this substance, under section 4671(b)(3), is $5.08 per ton. This is based upon a conversion factor for propylene of 0.8741 and a conversion factor for methane of 0.2376.

                                   Dale D. Goode,