CLA-2 RR:TC:MM 960179 RFA
Mr. Keith Strong
Hadleigh Marshall International
Linden House
93 High Street
Standlake, Oxford
OX8 7RH
United Kingdom
RE: Computer Software on Diskette and on CD-ROM; Software via
Electronic Transmission
Dear Mr. Strong:
In a letter dated November 19, 1996, to the Customs National
Commodity Specialists Division in New York, you requested the
tariff classification of computer software on diskette, on CD-ROM, and via electronic transmission under the Harmonized Tariff
Schedule of the United States (HTSUS). Your letter was referred
to this office for a response. We regret the delay.
FACTS:
The merchandise labeled as Lotus Notes "mPower" groupware
software programs for computers, allows a user to: create and
change documents; track the progress of documents through the
approval process and generates relevant warnings; allows access
to the end user distribution list of the latest version of the
document; and allows for quick an efficient document location and
retrieval. The product literature shows various graphic icons
contained in pictorial examples of various program screens.
According to your letter, the software will be entered into the
United States by one of three means: on 3.5 inch magnetic
computer diskette; on a CD-ROM laser disc; or via electronic
transmission.
ISSUE:
What is the classification of the software when entered on
different media, under the HTSUS?
LAW AND ANALYSIS:
Classification of merchandise under the HTSUS is in
accordance with the General Rules of Interpretation (GRI's). GRI
1 provides that classification shall be determined according to
the terms of the headings and any relative section or chapter
notes.
The software on 3.5 inch magnetic diskettes are classifiable
under subheading 8524.99.40, HTSUS, which provides for: "Records,
tapes and other recorded media for sound or other similarly
recorded phenomena. . . : [o]ther: [o]ther. . . ."
According to the information provided, the software on CD-ROM discs for a computer laser reading system creates image
phenomena in the form of graphic icons on the user's computer
screens. Based upon these facts, we find that the CD-ROM
software is classifiable under subheading 8524.39.00, HTSUS,
which provides for: "[r]ecords, tapes and other recorded media
for sound or other similarly recorded phenomena. . . : [d]iscs
for laser reading systems: [o]ther. . . ."
With regard to software entered via electronic
transmissions, General Note 16(b), HTSUS, exempts tele-communications transmissions from the general rule that all goods
provided for in the HTSUS are subject to duty. Therefore, no
duty is owed if software is entered via electronic transmissions.
HOLDING:
Software on 3.5 inch magnetic diskettes are classifiable
under subheading 8524.99.40, HTSUS, which provides for: "Records,
tapes and other recorded media for sound or other similarly
recorded phenomena. . . : [o]ther: [o]ther. . . ." The column
one, general rate of duty is 3.9› per square meter of recording
surface.
Software on CD-ROM laser discs are classifiable under
subheading 8524.39.00, HTSUS, which provides for: "[r]ecords,
tapes and other recorded media for sound or other similarly
recorded phenomena. . . : [d]iscs for laser reading systems: [o]ther. . . ." The general, column one rate of duty is 3.7
percent ad valorem.
In accordance with General Note 16(b), HTSUS, software
entered by telecommunications transmission is exempt from duty.
Sincerely,
John Durant, Director
Tariff Classification Appeals Division