CLA-2-84:RR:NC:1:110 E86558
Mr. Paul Vroman
AEI Customs Brokerage Services
2555 20th Street
Port Huron, Michigan 48060
RE: The tariff classification of a digital signage processor from various countries of origin.
Dear Mr. Vroman:
In your letter dated August 23, 1999, on behalf of Fred Systems Ltd., you requested a tariff classification ruling.
The merchandise under consideration involves a digital signage processor (DSP). The function of the DSP is to drive a Foto Realistic Display Sign, which is a large format full-color electronic display screen.
The DSP consists of a Compaq personal computer (PC) complete with mouse and keyboard, which is purchased in Canada. The PC is manufactured in the United States by Compaq. The country of origin of the mouse and keyboard are either Malaysia or Singapore. The computer's video card is removed. It is then replaced with either 1, 2, or 3 DSP display cards that drive various displays thereby providing a graphic poster. These cards are manufactured in the United States.
If ordered, the digital signage processor also incorporates a motion video card of U.S. origin; an 8 channel video matrix switcher of Canadian origin, and/or a 100mb internal ZIP drive of Malaysian origin. Internal input and output assemblies are added, and are of U.S. origin. The actual display sign is imported separately. There is also no cathode-ray tube (CRT) monitor.
The Compaq PC contains Windows 95 or NT and a variety of software programs. All unrelated applications and programs are removed from the hard drive except for Windows and Internet Explorer. Proprietary software is then loaded into the PC. The software program is used to create and display video advertisements. The software is designed in Canada. While no other programs will be on the hard drive, the PC would still be capable of performing other data processing functions.
The finished product consists of the PC (with software, switches, ZIP drive, and/or video cards included), the keyboard and mouse, and the proprietary software loaded onto the hard drive. The DSP site player has an internal storage capacity of more than 1000 images.
The DSP does not include a monitor or printer in the shipment, which appears to be a retail set. Noting Subheading Note 1 to Chapter 84 of the HTS, which defines "systems" under 8471.49, the above shipments would be precluded from consideration under 8471.49 since they are missing an output unit, such as the monitor. Noting in part GRI-1 and GRI-3(b) to the HTS, this digital signage processor unit has the "essential character" of a digital-processing machine. The DSP would also meet Legal Note 5(A) to Chapter 84. The preloaded software would be separately classifiable under HTS heading 8524, noting Legal Note 6 to Chapter 85. Note also New York Ruling Letter D89220 of March 17, 1999.
The applicable subheading for the digital signage processor (DSP) computer system will be 8471.50.0085, Harmonized Tariff Schedule of the United States (HTS), which provides for other digital processing units other than those of subheading 8471.41 and 8471.49, whether or not containing in the same housing one or two of the following types of unit: storage units, input units, output units. The rate of duty will be free.
The applicable subheading for the preloaded software on the hard disks will be 8524.99.4000, HTS, which provides for other, other recorded media. The rate of duty will be free.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177).
A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Arthur Brodbeck at 212-637-7019.
Sincerely,
Robert B. Swierupski
Director,
National Commodity
Specialist Division