Notice2024-18050
Superfund Tax on Chemical Substances; Request To Modify List of Taxable Substances; Correction to Filing of Petition for Nylon 6
Primary source
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Published
August 14, 2024
Issuing agencies
Treasury DepartmentInternal Revenue Service
Abstract
This supplemental notice of filing announces a correction to the stoichiometric material consumption equation in the notice of filing for the nylon 6 petition that was published in the Federal Register on February 22, 2024. This supplemental notice of filing also requests comments on the corrected petition. This supplemental 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 89 Issue 157 (Wednesday, August 14, 2024)</title>
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[Federal Register Volume 89, Number 157 (Wednesday, August 14, 2024)]
[Notices]
[Pages 66175-66176]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-18050]
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DEPARTMENT OF THE TREASURY
Internal Revenue Service
Superfund Tax on Chemical Substances; Request To Modify List of
Taxable Substances; Correction to Filing of Petition for Nylon 6
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Supplemental notice of filing and additional request for
comments.
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SUMMARY: This supplemental notice of filing announces a correction to
the stoichiometric material consumption equation in the notice of
filing for the nylon 6 petition that was published in the Federal
Register on February 22, 2024. This supplemental notice of filing also
requests comments on the corrected petition. This supplemental 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 October 15, 2024.
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> gov
(indicate public docket number IRS-2024-0005 or nylon 6) 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 (Supplemental Notice
of Filing for Nylon 6), 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: Camille Edwards Bennehoff at (202)
317-6855 (not a toll-free number).
SUPPLEMENTARY INFORMATION:
Request To Add Substance to the List
(a) Overview.
A petition was filed pursuant to Rev. Proc. 2022-26 (2022-29 I.R.B.
90), requesting that nylon 6 be added to the list of taxable substances
under section 4672(a) of the Internal Revenue Code (List). The notice
of filing summarizing the nylon 6 petition and requesting comments was
published in the Federal Register on February 22, 2024 (89 FR
13399)(original notice of filing). The Treasury Department and the IRS
received no written comments in response to the original notice of
filing and a public hearing was neither requested nor held. After the
comment period for the original notice of filing closed, an error was
discovered in the stoichiometric material consumption equation for
nylon 6, and the petitioner subsequently provided a corrected petition.
This supplemental notice of filing provides the corrected
stoichiometric material consumption equation for nylon 6 in paragraph
(b) of this document. The stoichiometric material consumption equation
is corrected to read as follows:
nC<INF>6</INF>H<INF>6</INF> (benzene) + nC<INF>3</INF>H<INF>6</INF>
(propylene) + 2.5nO<INF>2</INF> (oxygen) + 0.5nCH<INF>4</INF> (methane)
+ 5nNH<INF>3</INF> (ammonia) + 2nH<INF>2</INF>O (water) +
2nSO<INF>2</INF> (sulfur dioxide) [rarr]
(C<INF>6</INF>H<INF>11</INF>NO)<INF>n</INF> (nylon 6) +
nC<INF>3</INF>H<INF>6</INF>O (acetone) +
2n(NH<INF>4</INF>)<INF>2</INF>SO<INF>4</INF> (ammonium sulfate) + 0.5n
CO<INF>2</INF> (carbon dioxide)
The other petition information provided in paragraph (b) of this
document is unchanged from the original notice of filing for nylon 6.
Although the only change from the original notice of filing is to the
stoichiometric material consumption equation, this document also
includes all of the other information presented on the corrected
petition to avoid confusion and is provided for public notice and
comment pursuant to section 9 of Rev. Proc. 2022-26.
The petition requesting the addition of nylon 6 to the List is
based on weight and--as noted previously--contains the information
detailed in paragraph (b) of this document. The publication of petition
information in this supplemental notice of filing is not a
determination and does not constitute Treasury Department or IRS
confirmation of the accuracy of the information published.
[[Page 66176]]
Pursuant to section 10.02 of Rev. Proc. 2022-26, the IRS and
Petitioner agreed to extend the 180-day determination period.
(b) Petition Content.
(1) Substance name: Nylon 6.
(2) Petitioner: AdvanSix Inc., an exporter of nylon 6.
(3) Proposed classification numbers:
(i) HTSUS number: 3908.10.00.
(ii) Schedule B number: 3908.10.0000.
(iii) CAS number: 25038-54-4.
(4) Petition filing dates:
(i) Petition filing date for purposes of making a determination:
November 8, 2023.
(ii) Petition filing date for purposes of section 11.02 of Rev.
Proc. 2022-26: July 1, 2022.
(5) Description from petition: According to the petition, nylon 6,
or poly(caprolactam), is a semicrystalline polyamide that has broad use
in textile fibers, engineering plastics, food packaging films, and
monofilaments. The number ``6'' in nylon 6 refers to the number of
carbon atoms in each polymeric repeat unit. Nylon 6 may be utilized
neat or with functional additives by melt processing into the desired
final form.
Nylon 6 is made from benzene, propylene, ammonia, methane, and
sulfuric acid; however, sulfuric acid is cancelled from the
stoichiometric material consumption equation due to no net consumption/
production. Taxable chemicals constitute 46.64 percent by weight of the
materials used to produce this substance.
(6) Process identified in petition as predominant method of
production of substance: The predominant method of production of nylon
6 is the ``hydrolytically initiated ring-opening polymerization of
caprolactam'' which is also referred to in industry literature as the
``hydrolytic polymerization of nylon 6.'' This process is termed
``hydrolytic'' because water plays a key role in the chemical
mechanism. Nylon 6 is produced almost exclusively through this method
because it is easier to control and better adapted for large-scale
operations.
The hydrolytic polymerization of nylon 6 generally entails heating
a mixture of caprolactam and water to ~270[deg]C in an inert atmosphere
of nitrogen and holding until equilibrium conditions are achieved. The
three principal reactions in this process are summarized below:
1. In the initiation step of the process, the caprolactam ring is
hydrolyzed via ring opening with the addition of one water molecule to
become amino-caproic acid.
2. In the next step of the mechanism, the amino-caproic acid acts
as the initiating species to begin the addition polymerization by ring-
opening of caprolactam.
3. The last major mechanism step of the hydrolytic polymerization
of nylon 6 is the condensation of primary amine and carboxylic acid
chain-ends to form an amide linkage in the now higher molecular weight
polyamide with the simultaneous loss of a water molecule.
(7) Stoichiometric material consumption equation, based on process
identified as predominant method of production:
nC<INF>6</INF>H<INF>6</INF> (benzene) + nC<INF>3</INF>H<INF>6</INF>
(propylene) + 2.5nO<INF>2</INF> (oxygen) + 0.5nCH<INF>4</INF> (methane)
+ 5nNH<INF>3</INF> (ammonia) + 2nH<INF>2</INF>O (water) +
2nSO<INF>2</INF> (sulfur dioxide) [rarr]
(C<INF>6</INF>H<INF>11</INF>NO)<INF>n</INF> (nylon 6) +
nC<INF>3</INF>H<INF>6</INF>O (acetone) +
2n(NH<INF>4</INF>)<INF>2</INF>SO<INF>4</INF> (ammonium sulfate) + 0.5n
CO<INF>2</INF> (carbon dioxide)
(8) Tax rate calculated by Petitioner, based on Petitioner's
conversion factors for taxable chemicals used in production of
substance:
(i) Tax rate: $14.77 per ton.
(ii) Conversion factors: 0.69 for benzene; 0.37 for propylene; 0.75
for ammonia; 0.07 for methane.
(9) Public docket number: IRS-2024-0005.
Michael Beker,
Senior Counsel (Passthroughs and Special Industries), IRS Office of
Chief Counsel.
[FR Doc. 2024-18050 Filed 8-13-24; 8:45 am]
BILLING CODE P
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