Superfund Tax on Chemical Substances; Request To Modify List of Taxable Substances; Notice of Filing for Nylon 6, 13399-13400 [2024-03588]

Agencies

• Internal Revenue Service
• DEPARTMENT OF THE TREASURY

[Federal Register Volume 89, Number 36 (Thursday, February 22, 2024)]
[Notices]
[Pages 13399-13400]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-03588]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service


Superfund Tax on Chemical Substances; Request To Modify List of 
Taxable Substances; Notice of Filing for Nylon 6

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 
requesting that nylon 6 be added to the list of taxable substances. 
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 April 22, 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 https://www.regulations.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edited or withdrawn once submitted to the Federal eRulemaking Portal.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:01:PR (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 www.regulations.gov, 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:

[[Page 13400]]

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 petition requesting the addition of nylon 6 to the List 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 information in this notice of filing is not a determination 
and does not constitute Treasury Department or IRS confirmation of the 
accuracy of the information published.
    (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:

nC6H6 (benzene) + nC3H6 
(propylene) + 2.5nO2 (oxygen) + 0.5nCH4 (methane) 
+ 5nNH3 (ammonia) + 2nH2O (water) + 
2nSO2 (sulfur dioxide) [rarr] 
(C6H11NO)n (nylon 6) + 
nC3H6O (acetone) + 
2n(NH4)2SO4 (ammonium sulfate) + 0.5 
CO2 (carbon dioxide)

    Where n indicates the number of repeating units.
    (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. 2024-03588 Filed 2-21-24; 8:45 am]
BILLING CODE 4830-01-P