CLA-2 RR:TC:SM 560256 MLR
Bryan Schillinger, Esq.
Baker & Hostetler, L.L.P.
1000 Louisiana, Suite 2000
Houston, TX 77002-5009
RE: Applicability of duty exemption under HTSUS subheading
9801.00.85 to equipment; tools of trade
Dear Mr. Schillinger:
This is in reference to your letters dated July 15 and
October 2, 1996, and January 6, 1996 (sic), requesting a
ruling on behalf of Lockheed Martin Corp. ("Lockheed)
concerning the free entry of certain equipment. On January
16, 1997, we asked you whether you wished for us to consider
the applicability of the new subheading 9801.00.85,
Harmonized Tariff Schedule of the United States (HTSUS). As
you agreed on May 5, 1997, we will not respond to your
initial request concerning the applicability of subheading
9801.00.20, HTSUS.
FACTS:
It is stated that Lockheed, its operating divisions,
and its subsidiaries frequently export and return equipment
for use in the installation, maintenance, or repair abroad
of other merchandise. The equipment may be of foreign
origin. It is stated that the equipment will be returned
without having been advanced in value or improved in
condition by any process of manufacture or other means while
abroad. It is also stated that the equipment will be
exported and returned by or for the account of Lockheed.
Lockheed will also have imported the equipment into the U.S.
duty-paid on a prior occasion, but occasionally will
purchase a foreign-origin good in the U.S. before
exportation abroad.
ISSUE:
Whether the equipment may qualify for duty-free
treatment under subheading 9801.00.85, HTSUS.
LAW AND ANALYSIS:
Subheading 9801.00.85, HTSUS, provides duty-free
treatment for:
[p]rofessional books, implements, instruments, and
tools of trade, occupation, or employment, when
returned to the United States after having been
exported for use temporarily abroad, if imported by or
for the account of the person who exported such items.
Section 44 of the Miscellaneous Trade and Technical
Corrections Act of 1996, Pub. L. No. 104-295, 110 Stat. 3514
(1996), added subheading 9801.00.85, HTSUS, to permit the
duty-free entry of "tools of the trade" by corporations
which previously could only be entered duty-free if they
were exported and reimported by the same individual under
subheading 9804.00.10, HTSUS. See HRL 223198 dated October
17, 1991, which states that subheading 9804.00.10, HTSUS, is
considered a personal exemption available only to
individuals arriving in the U.S. from a foreign country, and
that merchandise consigned to and entered by or for the
account of a firm does not qualify for this exemption.
Accordingly, in this case, we find that equipment
exported by Lockheed for use in the installation,
maintenance, or repair abroad of other merchandise may be
entered under subheading 9801.00.85, HTSUS, if the
merchandise is imported by or for the account of Lockheed.
In response to your specific questions, if Lockheed is not
the original importer of the equipment but pays duty upon a
subsequent reimportation of the equipment, the equipment may
qualify for duty-free treatment under subheading 9801.00.85,
HTSUS, for future importations if Lockheed exports the
equipment temporarily and the equipment is reimported for
its account. Furthermore, we find that Lockheed may receive
duty-free treatment under subheading 9801.00.85, HTSUS, even
if it the equipment was not initially imported by Lockheed,
provided Lockheed exports the equipment for temporary use
abroad and the equipment is imported for its account.
Likewise, to the extent duty was paid for equipment
initially imported by a company and the company undergoes a
reorganization, the equipment may receive duty-free
treatment under subheading 9801.00.85, HTSUS, if the
equipment is subsequently exported and imported by or for
the account of the same person. Additionally, whether or
not the origin of the equipment is foreign or domestic,
subheading 9801.00.85, HTSUS, may be used provided the
statutory requirements are satisfied.
While the Customs Regulations do not currently specify
specific documentation required to substantiate a claim
under subheading 9801.00.85, HTSUS, it is our opinion that
carnets, commercial invoices, packing lists, landing
certifications, Customs documents used to import the
merchandise into the foreign country, or any other
documentation which shows that the merchandise being
imported under subheading 9801.00.85, HTSUS, is the same as
what was exported, may be utilized.
HOLDING:
On the basis of the information submitted, it is our
opinion that equipment used in the installation,
maintenance, or repair abroad of other merchandise may be
reimported duty-free under subheading 9801.00.85, HTSUS,
provided Lockheed exports the merchandise temporarily and
the same merchandise is imported by Lockheed or for its
account.
A copy of this ruling letter should be attached to the
entry documents filed at the time the goods are entered. If
the documents have been filed without a copy, this ruling
should be brought to the attention of the Customs officer
handling the transaction.
Sincerely,
John Durant, Director
Commercial Rulings Division