PENTAERYTHRITOL, TRIMETHYLOLPROPANE, AND 1,3 BUTYLENE GLYCOL ARE ADDED TO LIST OF TAXABLE TOXIC SUBSTANCES.
Notice 94-10; 1994-1 C.B. 334
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Notice 94-10
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 pentaerythritol, trimethylolpropane, and 1,3-butylene glycol. This modification is effective July 1, 1990.
BACKGROUND
Under section 4672(a), 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 December 10, 1993, the Secretary determined that pentaerythritol, trimethylopropane, and 1,3-butylene glycol should be added to the list of taxable substances in section 4672(a)(3), effective July 1, 1990.
The rate of tax prescribed for pentaerythritol, under section 4671(b)(3), is $4.66 per ton. This is based upon a conversion factor for ethylene of 0.2877, a conversion factor for methane of 0.9120, and a conversion factor for sodium hydroxide of 0.4700.
The rate of tax prescribed for trimethylolpropane, under section 4671(b)(3), is $4.45 per ton. This is based upon a conversion factor for propylene of 0.4527, a conversion factor for methane of 0.6214, and a conversion factor for sodium hydroxide of 0.3900.
The rate of tax prescribed for 1,3-butylene glycol, under section 4671(b)(3), is $4.89 per ton. This is based upon a conversion factor for ethylene of 0.9298 and a conversion factor for methane of 0.1055.
The petitioner is Hoechst Celanese, a manufacturer and exporter of these substances. No material comments were received on these petitions. The following information is the basis for the determinations.
PENTAERYTHRITOL
HTS number: 2905.42.00.00
CAS number: 115-77-5
Pentaerythritol is derived from the taxable chemicals ethylene, methane, and sodium hydroxide. Pentaerythritol is a solid produced predominantly by the alkaline catalyzed "crossed-cannizzaro" reaction between acetaldehyde and formaldehyde. Most acetaldehyde is produced by direct oxidation of ethylene. All formaldehyde is produced by catalytic vapor phase oxidation of methanol. Both carbon monoxide and methanol are produced from methane.
The stoichiometric material consumption formula for pentaerythritol is:
C2H4 (ethylene) + 4 CH4 (methane) + 2.5 O2 (oxygen) + NaOH (sodium
hydroxide) -----> 4 H2 (hydrogen) + HCOONa (sodium formate) + C5H12O4
(pentaerythritol)
Pentaerythritol 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 62.2 percent by weight of the materials used in its production.
TRIMETHYLOLPROPANE
HTS number: 2905.41.00.00
CAS number: 77-99-6
Trimethylolpropane is derived from the taxable chemicals propylene, methane, and sodium hydroxide. Trimethylolpropane is a solid produced predominantly by the mixed aldolization of formaldehyde with n-butryaldehyde. Formaldehyde is produced by catalytic vapor phase oxidation of methanol. Both carbon monoxide and methanol are produced from methane. The most widely used manufacturing technique for butyraldehyde is the process in which propylene is combined with carbon monoxide and hydrogen.
The stoichiometric material consumption formula for trimethylolpropane is:
C3H6 (propylene) + 4 CH4 (methane) + NaOH (sodium hydroxide) +
1.5 O2 (oxygen) + H2O (water -----> HCOONa (sodium formate) + 5 H2
(hydrogen) + C6H14O3 (trimethylopropane)
Trimethylolpropane 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 68.8 percent by weight of the materials used in its production.
1,3-BUTYLENE GLYCOL
HTS number: 2905.39.10.00
CAS number: 107-880
1,3-butylene glycol is derived from the taxable chemicals ethylene and methane. 1,3-butylene glycol is a liquid produced predominantiy by catalytic hydrogenation of acetaldol. Acetaldol is a condensation product of acetaldehyde. Acetaldehyde is produced by oxidation of ethylene. Hydrogen is obtained by steam reforming methane.
The stoichiometric material consumption formula for 1,3-butylene glycol is:
2 C2H4 (ethylene) + CH4 (methane) + H2O (water) + O2 (oxygen) ----->
2 H2 (hydrogen) + CO (carbon monoxide) + C4H10O2 (1,3-butylene
glycol)
1,3-butylene glycol 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 percent by weight of the materials used in its production.
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).
- Institutional AuthorsInternal Revenue Service
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- Tax Analysts Electronic Citation1994 TNT 20-17
