SERVICE ADDS TO LIST OF SUPERFUND TAXABLE SUBSTANCES.

Notice 90-48

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 POLYETHYLENE TEREPHTHALATE PELLETS.

EFFECTIVE DATE: This modification is effective as of April 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 2672(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 December 26, 1989, the Secretary determined that polyethylene terephthalate pellets should be added to the list of taxable substances in section 4672(a)(3) of the Internal Revenue Code, effective as of April 1, 1990.

The petition to add polyethylene terephthalate was submitted by Eastman Chemicals Division, Eastman Kodak Company, a manufacturer and exporter of this substance. No material comments were received on this petition.

Polyethylene Terephthalate 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 50.8 percent by weight of the materials used in its production.

     HTS number: 3907.60.00

The stoichiometric material consumption formula for this substance is:

100 C6H4(CH3)sub 2 + 101H2C:CH2 + 350.5 O2 + 101 H2O --------->

                                   Dale D. Goode,