Notice2023-05368
Superfund Chemical Substance Tax; Request To Modify List of Taxable Substances; Filing of Petition for Cellulose Acetate (Degree of Substitution = 1.5−2.0)
Primary source
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Published
March 16, 2023
Issuing agencies
Treasury DepartmentInternal Revenue Service
Abstract
This notice of filing announces that a petition has been filed pursuant to Revenue Procedure 2022-26, 2022-29 I.R.B. 90, requesting that cellulose acetate (degree of substitution = 1.5-2.0) be added to the list of taxable substances under section 4672(a) of the Internal Revenue Code ("Code"). This notice of filing also requests comments on the petition. This notice of filing is not a determination that the list of taxable substances is modified.
Full Text
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<title>Federal Register, Volume 88 Issue 51 (Thursday, March 16, 2023)</title>
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[Federal Register Volume 88, Number 51 (Thursday, March 16, 2023)]
[Notices]
[Pages 16307-16308]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-05368]
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DEPARTMENT OF THE TREASURY
Internal Revenue Service
Superfund Chemical Substance Tax; Request To Modify List of
Taxable Substances; Filing of Petition for Cellulose Acetate (Degree of
Substitution = 1.5-2.0)
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Notice of filing and request for comments.
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SUMMARY: This notice of filing announces that a petition has been filed
pursuant to Revenue Procedure 2022-26, 2022-29 I.R.B. 90, requesting
that cellulose acetate (degree of substitution = 1.5-2.0) be added to
the list of taxable substances under section 4672(a) of the Internal
Revenue Code (``Code''). This notice of filing also requests comments
on the petition. This notice of filing is not a determination that the
list of taxable substances is modified.
DATES: Written comments and requests for a public hearing must be
received on or before May 15, 2023.
ADDRESSES: Commenters are encouraged to submit public comments or
requests for a public hearing relating to this petition electronically
via the Federal eRulemaking Portal at <a href="http://www.regulations.gov">http://www.regulations.gov</a>
(indicate public docket number IRS-2023-0010 or cellulose acetate
(degree of substitution = 1.5-2.0)) by following the online
instructions for submitting comments. Comments cannot be edited or
withdrawn once submitted to the Federal eRulemaking Portal.
Alternatively, comments and requests for a public hearing may be mailed
to: Internal Revenue Service, Attn: CC:PA:LPD:PR (Notice of Filing for
Cellulose Acetate (Degree of Substitution = 1.5-2.0)), Room 5203, P.O.
Box 7604, Ben Franklin Station, Washington, DC 20044. All comments
received are part of the public record and subject to public
disclosure. All comments received will be posted without change to
<a href="http://www.regulations.gov">www.regulations.gov</a>, including any personal information provided. You
should submit only information that you wish to make publicly
available. If a public hearing is scheduled, notice of the time and
place for the hearing will be published in the Federal Register.
FOR FURTHER INFORMATION CONTACT: Please contact Amanda F. Dunlap, (202)
317-6855 (not a toll-free number).
SUPPLEMENTARY INFORMATION:
(a) Overview. The petition requesting the addition of cellulose
acetate (degree of substitution = 1.5-2.0) to the list of taxable
substances under section 4672(a) of the Code is based on weight and
contains the information detailed in paragraph (b) of this document.
The information is provided for public notice and comment pursuant to
section 9 of Rev. Proc. 2022-26. The publication of petition content in
this notice of filing does not constitute Department of the Treasury or
Internal Revenue Service (IRS) confirmation of the accuracy of the
information published.
Pursuant to section 10.02 of Rev. Proc. 2022-26, the IRS and
Petitioner agreed to extend the 180-day determination.
(b) Petition Content.
(1) Substance name: Cellulose acetate (degree of substitution =
1.5-2.0).
According to the petition, the commonly used names of the substance
include:
Cellulose acetate
Cellulose diacetate
(2) Petitioner: Celanese Ltd., an exporter of cellulose acetate
(degree of substitution = 1.5-2.0).
(3) Proposed Classification Numbers:
HTSUS numbers: 5502.10.0000, 5403.33.0020
Schedule B numbers: 5502.10.0000, 5403.33.0000
CAS number: 9035-69-2
(4) Petition Filing Date: December 20, 2022.
Petition filing date for purposes of section 11.02 of Rev. Proc. 2022-
26: July 1, 2022
(5) Brief Description of the Petition: According to the petition,
cellulose acetate (degree of substitution = 1.5-2.0) is a biopolymer
obtained by the reaction of wood pulp with acetic anhydride. It can be
injection molded into various shapes and may be used as a filter
medium, film base, coating, and articles such as straws, and eyeglass
frames. The substance is normally imported and exported in quantities
and packaging for industrial use only.
Cellulose acetate (degree of substitution = 1.5-2.0) is made from
cellulose (wood pulp) and methane. The production process is a reaction
of cellulose (from wood pulp) with acetic anhydride, normally using a
solvent such as acetic acid and a strong acid such as sulfuric acid as
a catalyst.
The degree of substitution (DS) is the number of acetate groups on
each cellulose ring. Each cellulose ring has three (3) places where an
acetate can be attached, so DS can range from zero to three (0-3).
Cellulose diacetate is the general descriptive term used in commerce,
primarily to distinguish the substance from cellulose triacetate.
[[Page 16308]]
These terms are not intended to quantitatively state that one has a DS
= 2.0 and the other a DS = 3.0.
The petition covers cellulose acetate (degree of substitution =
1.5-2.0), commonly referred to as cellulose diacetate. Cellulose
acetate in this range generally has similar properties. The petition
uses the lowest end of the range cellulose acetate DS = 1.5 to
demonstrate that >20% of the substance is made from taxable chemicals,
and the midpoint cellulose acetate DS = 1.75 to calculate the tax rate
for the entire range.
(6) Process Identified in Petition as Predominant Method of
Production of Substance: Cellulose acetate is derived from cellulose by
deconstructing wood pulp into a purified cellulose. The cellulose is
reacted with acetic acid and acetic anhydride in the presence of
sulfuric acid. It is subjected to a controlled, partial hydrolysis to
remove the sulfate and a sufficient number of acetate groups to give
the product the desired degree of substitution. The polymer unit is the
fundamental repeating structure of cellulose and has three hydroxyl
groups which can react to form acetate esters. The most common form of
cellulose acetate fiber has an acetate group on approximately two of
every three hydroxyls, referred to as cellulose diacetate. In
Petitioner's cellulose acetate, the actual substitution is 1.674
acetate/cellulose, a degree of substitution commonly used in US
cellulose acetate production.
(7) Stoichiometric Material Consumption Equation, Based on Process
Identified as Predominant Method of Production:
3.5 CH<INF>4</INF> + 1.75 O<INF>2</INF> +
C<INF>6</INF>H<INF>10</INF>O<INF>5</INF> [rarr]
C<INF>9.5</INF>H<INF>13.5</INF>O<INF>6.75</INF> + 3.50 H<INF>2</INF> +
1.75 H<INF>2</INF>O
(8) Rate of Tax Calculated by Petitioner Based on Petitioner's
Conversion Factors for Taxable Chemicals Used in Production of
Substance:
Calculation of Tax Rate using mid-point cellulose acetate DS = 1.75
Rate of Tax: $1.65 per ton
Conversion Factor: 0.24 methane
(9) Public Docket Number: IRS-2023-0010.
Stephanie Bland,
Branch Chief (Passthroughs and Special Industries), IRS Office of Chief
Counsel.
[FR Doc. 2023-05368 Filed 3-15-23; 8:45 am]
BILLING CODE 4830-01-P
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