CON-3-04-CO:R:C:E 224027 CB
Regional Director
Commercial Operations Division
Pacific Region
U.S. Customs Service
One World Trade Center
Long Beach, CA 90831-0700
RE: Application for further review of Protest No. 2809-0-
101890; HTS 9804.00.45; personal exemption; corporation
claiming personal exemption
Dear Sir:
The above-referenced protest was forwarded to this office
for further review. We have considered the points raised and our
decision follows.
FACTS:
According to the protest, in November, 1989, protestant, a
sole proprietor of a business entity, shipped a 1955 Mercedes
Benz 300SL valued at $425,000.00 to Europe. The automobile was
returned to the United States in March, 1990. The automobile was
purchased, exported and reimported under a corporate name. Upon
reimportation of the subject automobile, duties were assessed on
the full value of the automobile in the amount of $11,347.50.
It is protestant's contention that, because protestant is
the sole proprietor of the corporation, protestant and the
corporation are essentially one and the same entity. Therefore,
the automobile should have been admitted duty free under HTSUS
9804.00.45.
ISSUE:
Whether a corporation can claim a personal exemption?
LAW AND ANALYSIS:
Initially, we note that the protest, with application for
further review, was timely filed under the statutory and
regulatory provisions for protests (see 19 U.S.C. 1514 and 19 CFR
Part 174).
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The classification and rates of duty, or exemptions
therefrom, on imported goods are governed by the Harmonized
Tariff Schedule of the United States (HTSUS). Articles exported
and returned are provided for in Chapter 98, HTSUS. As
prescribed in U.S. note 1 to chapter 98, HTSUS, "[i]n the absence
of a specific provision to the contrary, the tariff status of an
article is not affected by the fact that it was previously
imported into the customs territory of the United States and
cleared through customs whether or not duty was paid upon such
previous importation." Duty is assessed on every subsequent
importation into the United States unless specifically exempted.
Subheading 9804.00.45, HTSUS, provides for the entry free of
duty of all personal and household effects taken abroad by a
person. The exemption for personal effects is considered an
individual exemption available only to persons arriving in the
U.S. from a foreign country. Personal effects owned by and
entered by or for the account of a corporation do not qualify for
this exemption. This situation is analogous to the exemption for
tools of trade. The Customs Service has consistently held that a
corporation or other entity cannot claim entitlement to a
personal exemption. See P.R.D. 74-16 (8 Cust. Bull. 614), C.S.D.
80-84, and HQ 223373.
Protestant's reliance on Headquarters Ruling (HRL) 714571 is
without basis. HRL 714571 held that a watch purchased by a
resident and shipped abroad for his/her use is entitled to the
duty-free exemption for personal effects when the resident
returns to the United States. The subject protest is readily
distinguishable. There is no doubt that the automobile would
qualify for duty-free treatment if it were owned by the
protestant. However, title to the subject automobile is held by
a corporation. As stated above, a corporation cannot claim
entitlement to any of the personal exemptions. Protestant's
argument that he is entitled to the exemption because he is the
sole stockholder of the corporation is implausible. It is a well
established principle of law that a corporation is distinct from
the individuals who comprise it (i.e., the shareholders). The
corporation has a personality and existence distinct from that of
its creators. The law treats the corporation itself separate
from the shareholders. Therefore, the argument that protestant
and the corporation, which owns the subject automobile, are
essentially one and the same person lacks any legal basis.
Additionally, it should be pointed out that if the
automobile was imported in the name of the protestant, even if
title was held by the corporation, then the protestant would have
been able to claim the personal exemption. See C.S.D.'s 80-84
and 80-155.
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HOLDING:
An automobile owned by a corporation is not subject to
the
personal exemption provided for under subheading 9804.00.45,
HTSUS. This exemption is considered a personal exemption
that can only be claimed by individuals. Therefore, the subject
protest should be denied in full.
A copy of this decision should be attached to the Customs
Form 19 and provided to the protestant as part of the notice of
action on the protest.
Sincerely,
John A. Durant, Director
Commercial Rulings Division