IRS LISTS PRODUCTS SUBJECT TO OZONE-DEPLETING CHEMICALS TAX.

Notice 90-9

This Notice informs the public of the products that are subject to the tax on imported products containing chemicals that deplete the ozone layer. Additional rules relating to this tax are contained in Notice 90-8, 1990-5 I.R.B. (January 29, 1990). The rules in this Notice and Notice 90-8 reflect amendments made by section 7506 of the Revenue Reconciliation Act of 1989 (Act) to the Internal Revenue Code (Code). Section 7506 of the Act added sections 4681 and 4682 (relating to the tax on ozone-depleting chemicals) to the Code. The table in this Notice applies only to imported products sold or used after December 31, 1989, and before the date on which temporary regulations under section 4682 are published in the Federal Register.

I. IN GENERAL

Section IV of Notice 90-8 provides rules for computing the amount of tax imposed under section 4681 of the Code on an imported product. Under those rules, the applicability of the tax to an imported product and, in certain circumstances, the amount of tax imposed on the product is determined by reference to a table prescribed by the Commissioner. A table will be issued in temporary regulations under section 4682.

This Notice sets forth a preliminary table based on information submitted by industry representatives and provides rules relating to the use of the table. Taxpayers may rely on the table contained in this Notice until temporary regulations are published and may compute the amount of tax imposed on an imported product sold or used after December 31, 1989, and before the date on which the temporary regulations are published by reference to the table contained in this Notice or by reference to the table contained in the temporary regulations.

II. USE OF TABLE

The table in this Notice is to be used in accordance with the following rules:

(a) Rigid foam insulation. In computing the tax on an imported product under section I(a)(2) of Notice 90-8, the tax that would be imposed on an ozone-depleting chemical (ODC) used as a material in the manufacture of the product is determined under section 4682(g) of the Code (relating to the phase-in of tax on certain substances) if the chemical was used in the manufacture of rigid foam insulation. If the table contained in this Notice is used in computing the tax on an imported product under the approximate method described in section IV(e)(2) of Notice 90-8, any chemical with a weight that is followed by an asterisk (*) shall be treated as a chemical used in the manufacture of rigid foam insulation.

(b) Protective packaging. The protective packaging of a listed product is not taken into account in computing the tax on the product under the exact method described in section IV(e)(1) of Notice 90-8.

(c) Coordination with exact method. A taxpayer who cannot establish the weight of each ozone-depleting chemical used as a material in the manufacture of an imported product cannot use the exact method described in section IV(e)(1) of Notice 90-8. If, however, the taxpayer determines the weight of any such chemical and can support such determination with sufficient and reliable information, the taxpayer may substitute the weight established by such determination for the weight specified in the table contained in this Notice. For example, if a taxpayer uses sufficient and reliable information to determine the amount of CFC-12 included in a product as a refrigerant but cannot determine the amount of CFC-113 used in manufacturing the product's electronic components, the taxpayer may use the ODC weight from the table for CFC-113 and the weight determined by the taxpayer for CFC-12.

(d) Listed products. Each listing in the table identifies an imported taxable product by name and includes only products that are described by such name. Some listings also identify imported taxable products by Harmonized Tariff Schedule (HTS) item number. In such cases, the listing includes only products on which the rate of duty is determined by reference to such HTS item number. For example, the table identifies computers by name (see listings for ADP units) and by HTS number 8471. The listings do not include computers entered under HTS number 9801, 9802, 9803, or 9813 (relating to items exported and returned). Accordingly, computers assembled outside the United States from components manufactured in the United States are not taxed because the duty on such computers is determined under HTS number 9802.00.80.

III. IMPORTED PRODUCTS TABLE

The table used in applying the rules of section IV of Notice 90-8 is set forth below. The ODC weight is given in lbs/unit unless otherwise specified.

PART I

(Imported products for which the ODC weight is not de minimis and in the manufacture of which ozone-depleting chemicals have not been used for purposes of refrigeration or air conditioning, creating an aerosol or foam, or manufacturing electronic components.)

                               Harmonized Tariff

(Important products in which ozone-depleting chemicals have been used for purposes of refrigeration or air conditioning, creating an aerosol or foam, or manufacturing electronic components.)

                               Harmonized Tariff

This document serves as an "administrative pronouncement" as that term is described in section 1.6661-3(b)(2) of the Income Tax Regulations and may be relied upon to the same extent as a revenue ruling or revenue procedure.

The principal author of this Notice is Ruth Hoffman, Office of Assistant Chief Counsel (Passthroughs and Special Industries), Internal Revenue Service. For further information regarding this Notice, contact Ruth Hoffman on (202) 566-4077 (not a toll-free call).