[Federal Register Volume 60, Number 72 (Friday, April 14, 1995)]
[Notices]
[Page 19113]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-9288]



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DEPARTMENT OF THE TREASURY

Tax on Certain Imported Substances (Nylon 6/6); Notice of 
Determination

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Notice.

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SUMMARY: This notice announces a determination, under Notice 89-61, 
that the list of taxable substances in section 4672(a)(3) will be 
modified to include nylon 6/6.

EFFECTIVE DATE: This modification is effective July 1, 1990.

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 that 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, 1989-1 CB 717, 
sets forth the rules relating to the determination process.

Determination

    The petitioner is Monsanto Company, a manufacturer and exporter of 
this substance. Written comments were received on this petition.
    On March 31, 1995, the Secretary determined that nylon 6/6 should 
be added to the list of taxable substances in section 4672(a)(3), 
effective July 1, 1990.
    The rate of tax prescribed for nylon   6/6, under section 
4671(b)(3), is $5.65 per ton. This is based upon a conversion factor 
for methane of 0.40, a conversion factor for benzene of 0.47, a 
conversion factor for nitric acid of 0.41, a conversion factor for 
butadiene of 0.28, and a conversion factor for ammonia of 0.20.
    The following information is the basis for the determination.

HTS number: 3908.10.00.00
CAS number: 52349-42-5

    Nylon 6/6 is derived from the taxable chemicals methane, benzene, 
nitric acid, ammonia, and butadiene. Nylon   6/6 is a powdered solid 
produced predominantly by the reaction of adipic acid with 
hexamethylene diamine. The adipic acid is derived from benzene via 
hydrogenation to cyclohexane, which is oxidized using air and nitric 
acid in a two-step process. The hexamethylene diamine is made by the 
reaction of butadiene with hydrogen cyanide (derived from ammonia and 
from methane in natural gas).
    The stoichiometric material consumption formula for nylon 6/6 is:

9 CH<INF>4 (methane) + 10 H<INF>2O (water) + 2 C<INF>6H<INF>6 (benzene) 
+ 4.66 HNO<INF>3 (nitric acid) + 4 NH<INF>3 (ammonia) + 6 O<INF>2 
(oxygen) + 2 C<INF>4H<INF>6 (butadiene) ----> 2 
(C<INF>12H<INF>22N<INF>2O<INF>2)<INF>n (nylon 6/6)

    Nylon 6/6 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 67.4 percent by weight of the materials used in its 
production.
Dale D. Goode,
Federal Register Liaison Officer, Assistant Chief Counsel (Corporate).
[FR Doc. 95-9288 Filed 4-13-95; 8:45 am]
BILLING CODE 4830-01-U