IRS ADDS CYCLODODECANOL, 1,5,9-CYCLODODECATRIENE, AND ADIPONITRILE TO TAXABLE SUBSTANCES LIST.

Notice 95-12

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Notice.

SUMMARY: This notice announces determinations, under Notice 89-61, that the list of taxable substances in section 4672(a)(3) will be modified to include cyclododecanol, 1, 5, 9-cyclododecatriene, and adiponitrile.

EFFECTIVE DATE: This modification is effective July 1, 1995.

FOR FURTHER INFORMATION CONTACT: Tyrone J. Montague, Office of Assistant Chief Counsel (Passthroughs and Special Industries), (202) 622-3130 (not a toll-free number).

SUPPLEMENTARY INFORMATION:

BACKGROUND

Under section 4672(a), 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 February 7, 1995, the Secretary determined that cyclododecanol, 1, 5, 9-cyclododecatriene, and adiponitrile should be added to the list of taxable substances in section 4672(a)(3), effective July 1, 1995.

The rate of tax prescribed for cyclododecanol, under section 4671(b)(3), is $6.21 per ton. This is based upon a conversion factor for butadiene of 1.22 and a conversion factor for methane of 0.08.

The rate of tax prescribed for 1, 5, 9-cyclododecatriene, under section 4671(b)(3), is $5.64 per ton. This is based upon a conversion factor for butadiene of 1.16.

The rate of tax prescribed for adiponitrile, under section 4671(b)(3), is $5.72 per ton. This is based upon a conversion factor for methane of 0.52, a conversion factor for ammonia of 0.42, and a conversion factor for butadiene of 0.58.

The petitioner is E. I. du Pont de Nemours and Company, a manufacturer and exporter of these substances. No material comments were received on these petitions. The following information is the basis for the determinations.

CYCLODODECANOL

HTS number: 2906.19.00

CAS number: 1724-39-6

Cyclododecanol is derived from the taxable chemicals butadiene and methane. Cyclododecanol is a solid produced predominantly by air oxidation of cyclododecane. Cyclododecane is produced by hydrogenation of 1, 5, 9-cyclododecatriene which is produced by the trimerization of butadiene.

The stoichiometric material consumption formula for cyclododecanol is:

     3 (butadiene) + 0.75 (methane)

1, 5, 9-CYCLODODECATRIENE

HTS number: 2906.19.00

CAS number: 4904-61-4

1, 5, 9-cyclododecatriene is derived from the taxable chemical butadiene. 1, 5, 9-cyclododecatriene is a solid produced predominantly by trimerization of butadiene in the presence of a coordination-type catalyst.

The stoichiometric material consumption formula for 1, 5, 9- cyclododecatriene is:

     3 (butadiene) ---> (1, 5, 9-cyclododecatriene)

ADIPONITRILE

HTS number: 2926.90.50

CAS number: 111-69-3

Adiponitrile is derived from the taxable chemicals methane, ammonia, and butadiene. Adiponitrile is a liquid produced predominantly by the reaction of butadiene with hydrogen cyanide (derived from ammonia and from methane in natural gas).

The stoichiometric material consumption formula for adiponitrile is:

2 (methane) + 2 (ammonia) +

                                   Dale D. Goode,