SERVICE ADDS TO LIST OF SUPERFUND TAXABLE SUBSTANCES.

Notice 90-51

AGENCY: Internal Revenue Service, Treasury.

ACTION: Notice.

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 VINYL ACETATE, NORMAL PROPYL ACETATE, ISOPROPYL ACETATE, NORMAL BUTYL ACETATE, AND ISOBUTYL ACETATE.

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 determination that vinyl acetate, normal propyl acetate, isopropyl acetate, normal butyl acetate, and isobutyl acetate 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 vinyl acetate, normal propyl acetate, isopropyl acetate, normal butyl acetate, and isobutyl acetate were submitted by Hoechst Celanese, a manufacturer and exporter of these substances. No material comments were received on these petitions.

VINYL ACETATE

Vinyl acetate 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 63.8 percent by weight of the materials used in its production.

HTS number: 2915.32.00

The stoichiometric material consumption formula for this substance is:

C2H4 + 2 CH4 + H2O = 1/2 O2 -----> CH3COOHCH2 + 4 H2 ethylene methane water oxygen vinyl acetate hydrogen

The rate of tax prescribed for this substance, under section 4671(b)(3), is $2.72 per ton. This is based upon a conversion factor for ethylene of 0.3669 and a conversion factor for methane of 0.2695.

NORMAL PROPYL ACETATE

Normal propyl acetate 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 67.9 percent by weight of the materials used in its production.

HTS number: 2915.39.45.10

The stoichiometric material consumption formula for this substance is:

C2H4 + 3 CH4 + 2 H2O ------> CH3COOC3H7 + 5 H2 ethylene methane water n-propyl acetate hydrogen

The rate of tax prescribed for this substance, under section 4671(b)(3), is $2.26 per ton. This is based upon a conversion factor for ethylene of 0.3148 and a conversion factor for methane of 0.2117.

ISOPROPYL ACETATE

Isopropyl acetate 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 67.9 percent by weight of the materials used in its production.

HTS number: 2915.39.50.00

The stoichiometric material consumption formula for this substance is:

C2H4 + 3 CH4 + 2 H2O -----> CH3COOC3H7 + 5 H2 ethylene methane water isopropyl acetate hydrogen

The rate of tax prescribed for this substance, under section 4671(b)(3), is $2.34 per ton. This is based upon a conversion factor for ethylene of 0.326 and a conversion factor for methane of 0.2173.

NORMAL BUTYL ACETATE

Normal Butyl Acetate 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 71.4 percent by weight of the materials used in its production.

HTS number: 2915.33.00

The stoichiometric material consumption formula for this substance is:

C3H6 + 3 CH4 + 2 H2O -----> CH3COOC4H9 + 5 H2 propylene methane water n-butyl acetate hydrogen

The rate of tax prescribed for this substance, under section 4671(b)(3), is $2.72 per ton. This is based upon a conversion factor for ethylene of 0.4242 and a conversion factor for methane of 0.1881.

ISOBUTYL ACETATE

Isobutyl acetate 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 71.4 percent by weight of the materials used in its production.

HTS number: 2915.34.00

The stoichiometric material consumption formula for this substance is:

C3H6 + 3 CH4 + 2 H2O ----> CH3COOC4H9 + 5 H2 propylene methane water isobutyl acetate hydrogen

The rate of tax prescribed for this substance, under section 4671(b)(3), is $2.86 per ton. This is based upon a conversion factor for ethylene of 0.4524 and a conversion factor for methane of 0.1920.

                                   Dale D. Goode,