CLA-2-84:OT:RR:NC:N4:120
Neil S. Helfand
Sandler, Travis & Rosenberg, P.A.
505 Sansome St. Suite 1475
San Francisco, CA 94111-3176
RE: The tariff classification of the HoloLens from China
Dear Mr. Helfand:
In your letter dated March 8, 2016 you requested a tariff classification ruling on behalf of the Microsoft Corporation.
The merchandise under consideration is referred to as the Microsoft HoloLens (HoloLens) and the Microsoft HoloLens Clicker, (Clicker). The HoloLens is a self-contained adjustable head band and visor assembly that is comprised of a printed circuit board assembly, holographic lenses (waveguides), six cameras, four microphones, audio output, status LEDs, built-in speakers with volume adjustments, and rechargeable batteries. The HoloLens incorporates a 32-bit processor, 2GB RAM, 64GB storage, a graphics processor, and Wi-Fi 802.11ac connectivity that allows the user to wirelessly connect to a network. The HoloLens utilizes the Windows 10 operating system and supports applications available in the Windows 10 environment.
The Clicker is described as small handheld input device comprised of two input buttons, an accelerometer, a battery, and an elastic band to secure the device to the user’s finger. The Clicker is intended to be solely used with the HoloLens for the purpose of selecting content and performing scrolling functions, and is paired to its host using a Bluetooth connection. While the HoloLens and Clicker are packaged and imported together along with the charging components and accessories, you state the Clicker may also be imported separately from the HoloLens retail package in order to provide customers with replacements.
The HoloLens is stated to be a wearable and fully functional automatic data processing (ADP) machine that is completely untethered and operates without the need to be physically connected to another device. A user of the HoloLens would wear the device and perform tasks such as: navigate web pages of their choosing; create 3D design models; perform word processing and spreadsheet functions; interact with audio and video entertainment applications; play games; and other utilitarian functions expected from an ADP machine. However, when compared to a conventional ADP machine, we would note that the HoloLens is very different in a number of key areas like cursor control or display design. For example, the operator of the HoloLens uses hand gestures and audible commands to interact and control applications, much in the same manner as someone using a standard mouse input device, only with the HoloLens they are using their hands and fingers. Further, the HoloLens employs light engines and waveguides positioned in front of the wearer’s eyes so that the image is directed onto the eye, whereas a typical ADP configuration would utilize an external display.
Paramount to the differences in cursor control or physical design is the format in which the HoloLens displays data and images. The user has the ability to have multiple applications open simultaneously where each virtual application window occupies a fixed location within the user’s physical environment. To that end, a user may relocate or virtually “pin” an application window to a physical surface such as a wall, ceiling, or out in the open, and in any location such as in front, above, or behind. In doing so, the user’s workspace is expanded beyond the material dimensions of a conventional display device and applications are instead represented in a three dimensional field.
Nonetheless, we find that the user is not inhibited from performing ADP functions or limited in its operation. Thus, we find that the HoloLens meets all the following conditions of Legal Note 5(A) to Chapter 84, Harmonized Tariff Schedule of the United States (HTSUS), which defines an ADP machine: it stores the processing program (Windows 10) and other programs, e.g., MS Office, and the data necessary for the execution of the programs; it is freely programmable since the user may add, remove, or write new applications for the device; it performs computations as specified by the user; and its processing programs are executed by logical decisions without human intervention.
Since the primary function of the HoloLens is only data processing, it falls outside the scope of Legal Note 5(E) to Chapter 84, HTSUS, which, in pertinent part, reads: “Machines incorporating… an ADP machine and performing a specific function other than data processing are to be classified in the headings appropriate to their respective functions….” Therefore, the HoloLens is properly classifiable in heading 8471, HTSUS.
In your request you suggest the HoloLens is correctly classified under 8471.41.0150, HTSUS, and the Clicker is correctly classified under 8471.60.9050, HTSUS. This office agrees.
The applicable subheading for the Microsoft HoloLens will be 8471.41.0150, HTSUS, which provides for “Automatic data processing machines and units thereof; …: Other automatic data processing machines: Comprising in the same housing at least a central processing unit and an input and output unit, whether or not combined: Other.” The general rate of duty will be Free.
The applicable subheading for the Microsoft HoloLens Clicker will be 8471.60.9050, HTSUS, which provides for “Automatic data processing machines and units thereof;…: Input or output units, whether or not containing storage units in the same housing: Other: Other: Other.” The general rate of duty will be Free.
Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on World Wide Web at http://www.usitc.gov/tata/hts/.
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 Karl Moosbrugger at [email protected].
Sincerely,
Deborah C. Marinucci
Acting Director
National Commodity Specialist Division