CLA-2-84:OT:RR:NC:N4:120
Mr. Ralph Natale
American Shipping Company, Inc.
250 Moonachie Road
Moonachie, NJ 07074
RE: The tariff classification of Interactive Display Systems from Japan and China.
Dear Mr. Natale: In your letter dated February 6, 2017, you requested a tariff classification ruling on behalf of your client, Sharp Electronics Corporation. The merchandise under consideration is identified as the “Sharp LCD Aquos Board Interactive Display System,” model numbers PN-C705B and PN-C805B. You state that these interactive display units are designed for use with automatic data processing (ADP) machines in environments such as meeting rooms, boardrooms, and classrooms, where users interact with the software installed on the connected ADP machine(s). These two display units feature infrared (IR) touchscreens and have the ability to use finger touch or touch pen(s) for the input of data to a connected ADP machine, which is referred to as the host personal computer (PC) that is used to operate the LCD monitor. Each model comes equipped with multiple connection terminals, such as: RGB; HDMI; D-Sub; Display Port; RS-232C; RJ45 Ethernet; and USB that allows the Interactive Display units to connect to an ADP or other machine(s) for the display and manipulation of content.
In use, the Display Connect software is installed onto the connected ADP machine and provides the interactive interface between the users and the software applications on the PC. Once configured, this environment allows users to interact with displayed content with their fingers or with the touch pens. Types of interactions include: drawing; writing and text conversion; control of PC installed applications; zooming and clipping images; opening, editing, and saving files; and more.
In your request, you suggest that the items under consideration should be classified under subheading 8528.52.0000, Harmonized Tariff Schedule of the United States (HTSUS), as monitors, not incorporating television reception apparatus, and being capable of directly connecting to and designed for use with an ADP machine of heading 8471. We disagree with this suggested classification as these interactive displays are beyond the scope of heading 8528 and are more specifically provided for elsewhere.
The General Rules of Interpretation (GRIs) to the HTSUS govern the classification of goods in the tariff schedule. GRI-1 states, in pertinent part, that "for legal purposes, classification shall be determined according to the terms of the headings and any relative section or chapter notes . . . ." And although not dispositive, the Explanatory Notes (ENs) to the Harmonized Commodity Description and Coding System represent the official interpretation of the tariff at the international level and facilitate classification under the HTSUS by offering guidance in understanding the scope of the headings and the GRIs.
As stated, the subject interactive display units are designed to connect directly to an ADP machine for the purpose of performing input and output functions in an ADP system. The ENs describe an ADP system as consisting of a central processing unit, an input unit, and an output unit and states that an input unit and output unit can be combined into one single unit within the system.
We would note that in order to be classified in heading 8471, the merchandise must meet the terms of a unit of an ADP system as specified in Legal Note 5(C) of Chapter 84, HTSUS. In this regard, Note 5(C) to Chapter 84 defines the term “data processing units” for purposes of heading 8471 as follows:
It is of a kind solely or principally used in an automatic data processing system;
It is connectable to the central processing unit either directly or through one or more other units; and
It is able to accept or deliver data in a form (codes or signals) that can be used by the system.
Further to meeting the conditions of Note 5(C), the units must not be excluded from any of the conditions provided for in Note 5(D) and Note 5(E) of Chapter 84, HTSUS. While monitors and projectors are excluded from classification in heading 8471, the subject Interactive Display units are not merely display monitors, but instead meet the conditions set forth in the legal notes for ADP systems by comprising two of the three components within the system, namely the input and the output. As the IR touchscreen and the LCD panel are permanently combined into a single unit, and the display unit(s) are principally used within an ADP system for the purpose of performing a data processing function, the subject Interactive Display units will be classified by name and in accordance with GRI-1 as a combined input output unit for ADP.
The applicable subheading for the Sharp LCD Aquos Board Interactive Display Systems Model Numbers PN-C705B and PN-C805B will be 8471.60.1050, 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: Combined input/output units: Other. The 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 the World Wide Web at https://hts.usitc.gov/current. 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,
Steven A. Mack
Director
National Commodity Specialist Division