BISPHENOL-A AND ALPHA-METHYLSTYRENE ARE ADDED TO LIST OF TAXABLE SUBSTANCES.
Notice 94-29; 1994-1 C.B. 344
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Notice 94-29
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 bisphenol-A and alpha-methylstyrene. This modification is effective July 1, 1990.
BACKGROUND
Under section 4672(a) of the Code, 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 March 5, 1990, the Secretary determined the bisphenol-A and alphamethylstyrene should be added to the list of taxable substances in section 4672(a)(3) of the Code, effective July 1, 1990.
The rate of tax prescribed for bisphenol-A, under section 4671(b)(3), is $5.11 per ton. This is based upon a conversion factor for benzene of 0.68 and a conversion factor for propylene of 0.37.
The rate of tax prescribed for alpha-methylstyrene, under section 4671(b)(3), is $4.96 per ton. This is based upon a conversion factor for benzene of 0.66 and a conversion factor for propylene of 0.36.
The petitioner is Aristech Chemical Corporation, a manufacturer and exporter of these substances. No material comments were received on these petitions. The following information is the basis for the determinations.
Bisphenol-A
HTS number: 2907.23.00.00
CAS number: 80-05-7
Bisphenol-A is derived from the taxable chemicals benzene and propylene. Bisphenol-A is a solid produced predominantly by the acid catalyzed reaction of phenol with acetone.
The stoichiometric material consumption formula for bisphenol-A is:
2 C6H6 (benzene) + 2 C3H6(propylene) + 2 O2 (oxygen) ----->
C15H16O2 (bisphenol-A) + C3H6O(acetone) + H2O (water)
Bisphenol-A 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 78.9 percent by weight of the materials used in its production.
Alpha-methylstyrene
HTS number: 2902.90.00.00
CAS number: 98-83-9
Alpha-methylstyrene is derived from the taxable chemicals benzene and propylene. Alpha-methylstyrene is a liquid produced predominantly as a byproduct from the cumene oxidation process for the production of phenolacetone.
The stoichiometric material consumption formula for alphamethylstyrene is:
C6H6 (benzene) + C3H6 (propylene) + 0.5 O2 (oxygen) ----->
C9H10 (alpha-methylstyrene) + H2O (water)
Alpha-methylstyrene 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 88.2 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
- Code Sections
- Subject Areas/Tax Topics
- Index Termstoxics, imported, definitions and rules
- Jurisdictions
- LanguageEnglish
- Tax Analysts Electronic Citation1994 TNT 64-5
