CLA-2-85:OT:RR:NC:N2:220
Angie Courteau
LZB Manufacturing, Inc.
One La-Z-Boy Drive
Monroe, MI 48162
RE: The tariff classification of electrical actuators from China
Dear Ms. Courteau:
In your letter dated January 9, 2024, you requested a tariff classification ruling.
The first item under consideration is identified as the Electrical Kit Single Seat Wide, PN 11.038733.0001, which is described as a system for reclining furniture having electric motor actuators (actuators), 2-button control assemblies (control assemblies), and power supplies. All of the components are segregated and packaged by type but in equal quantities, such as the actuators are packaged together, the control assemblies are packaged together, etc. The actuators consist of a 29 VDC motor with an attached actuating arm and are said to have a maximum power output of 90 Watts. Each control assembly consists of a printed circuit board assembly (PCBA) having two push buttons and a USB charging port. The power supplies are rated at 58 W and supply DC electricity to the actuators and control assembly via an electrical cable. The proposed shipping method is noted as follows: 84 actuators, split into two boxes; 84 control assemblies in one box; and 84 power supplies, split into four boxes. All of the components will be contained within three pallets, stacked together, and imported under a single part number as identified herein.
The second item under consideration is identified as the Electrical Kit Dual Seat Standard, PN 11.038733.0002, which is described as a system for reclining furniture having electric actuators, control assemblies, power supplies, and Y-cable assemblies. Like the previous system, all of the components are segregated and packaged by type with the exception that in this configuration, one power supply and Y-cable assembly will attach to two motors and control assemblies. The actuators consist of a 29 VDC motor with an attached actuating arm and are said to have a maximum power output of 90 Watts. Each control assembly consists of a PCBA having two push buttons and a USB charging port. The power supplies are rated at 58 W and supply DC electricity to two of the actuators and control assembly via the Y-cable assembly. The proposed shipping method is noted as follows: 112 actuators, split into two boxes; 112 control assemblies, split into two boxes; 56 power supplies, split into three boxes; and 56 Y-cable assemblies in a single box. All of the components will be contained within three pallets, stacked together, and imported under a single part number as identified herein.
The third item under consideration is identified as the Electrical Kit Single Seat Standard, PN 11.038733.0003, which is described as a system for reclining furniture having electric actuators, control assemblies, power supplies, and Y-cable assemblies. Like the previous systems, all of the components are segregated and packaged by type. The actuators consist of a 29 VDC motor with an attached actuating arm and are said to have a maximum power output of 90 Watts. Each control assembly consists of a PCBA having two push buttons and a USB charging port. The power supplies are rated at 58 W and supply DC electricity to two of the actuators and control assembly via an electrical cable. The proposed shipping method is noted as follows: 112 actuators, split into two boxes; 112 control assemblies, split into two boxes; and 112 power supplies, split into three boxes. All of the components will be contained within three pallets, stacked together, and imported under a single part number as identified herein.
In your letter, that suggest the actuator systems under consideration here, noted as PNs 11.038733.0001, 11.038733.0002, and 11.038733.0003, meet the definition a composite good under the General Rule of Interpretation (GRI) 3(b) as provided for in the Harmonized Tariff Schedule of the United States (HTSUS).
Classification under the HTSUS is made in accordance with the GRIs. GRI 1 provides that the classification of goods shall be determined according to the terms of the headings of the tariff schedule and any relative section or chapter notes. If the goods cannot be classified solely based on GRI 1, and if the headings and legal notes do not otherwise require, only then may the remaining GRIs 2 through 6 may then be applied in order. It is our view that the subject actuator systems are classified by GRI 1 and 6, and while the actuator systems consist of individual machines, each working together but performing a distinct function, they are not considered a composite good nor do they constitute a retail set. As a result, GRI 3 is not appropriate.
Also in your letter, you cite Note 3 to Section 16, HTSUS, and suggest that the three systems, as described above, are correctly classified as composite machines where the motor establishes the principal function. Note 3 to Section 16, HTSUS, states, in part:
“Composite machines consisting of two or more machines fitted together to form a whole and other machines designed for the purpose of performing two or more complementary or alternative functions are to be classified as if consisting only of that component or as being that machine which performs the principal function”.
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. The ENs to Legal Note 3 to Section 16, HTSUS, state, in pertinent part:
“Composite machines consisting of two or more machines or appliances of different kinds, fitted together to form a whole, consecutively or simultaneously performing separate functions which are generally complementary and are described in different headings of Section XVI, are also classified according to the principal function of the composite machine.
[…]
For the purposes of the above provisions, machines of different kinds are taken to be fitted together to form a whole when incorporated one in the other or mounted one on the other, or mounted on a common base or frame or in a common housing. Assemblies of machines should not be taken to be fitted together to form a whole unless the machines are designed to be permanently attached either to each other or to a common base, frame, housing, etc. This excludes assemblies which are of a temporary nature or are not normally built as a composite machine.”
Since the actuator systems are not incorporated together to form a whole, but rather are merely attached by cables and work in conjunction with the electric motor, they are not considered composite machines. See HQ 089935.
Based on the foregoing, it is our view that pursuant to GRIs 1 and 6, and referencing Note 4 to Section 16, HTSUS, the three actuator systems are accurately described as functional units. Note 4 to Section 16, HTSUS, states:
“Where a machine (including a combination of machines) consists of individual components (whether separate or interconnected by piping, by transmission devices, by electric cables or by other devices) intended to contribute together to a clearly defined function covered by one of the headings in chapter 84 or chapter 85, then the whole falls to be classified in the heading appropriate to that function”.
Each of the individual components that make up the actuator systems connect together to perform the actuating functions in reclining furniture. The power supplies are connected to the control assemblies where user interaction with the switches delivers electricity to the electric motor(s) to initiate movement. As a result, these individual components, having their own functions, work in concert to produce this movement, which in our opinion, is the clearly defined function of each actuator system noted in this ruling. When the actuator systems are imported as described above, they are to be classified together in accordance with the function of the system, namely the electric actuator.
The applicable subheading for the Electrical Kit Single Seat Wide, PN 11.038733.0001, will be 8501.31.4000, HTSUS, which provides for "Electric motors…: Other DC motors…: Of an output not exceeding 750W: Motors: Exceeding 74.6 W but not exceeding 735 W." The general rate of duty will be 4%.
The applicable subheading for the Electrical Kit Dual Seat Standard, PN 11.038733.0002, will be 8501.31.4000, HTSUS, which provides for "Electric motors…: Other DC motors…: Of an output not exceeding 750W: Motors: Exceeding 74.6 W but not exceeding 735 W." The general rate of duty will be 4%.
The applicable subheading for the Electrical Kit Single Seat Standard, PN 11.038733.0003, will be 8501.31.4000, HTSUS, which provides for "Electric motors…: Other DC motors…: Of an output not exceeding 750W: Motors: Exceeding 74.6 W but not exceeding 735 W." The general rate of duty will be 4%.
Pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, products of China classified under subheading 8501.31.4000, HTSUS, unless specifically excluded, are subject to an additional 25 percent ad valorem rate of duty. At the time of importation, you must report the Chapter 99 subheading, i.e., 9903.88.02, in addition to subheading 8501.31.4000, HTSUS, listed above.
The HTSUS is subject to periodic amendment, so you should exercise reasonable care in monitoring the status of goods covered by the Note cited above and the applicable Chapter 99 subheading. For background information regarding the trade remedy initiated pursuant to Section 301 of the Trade Act of 1974, including information on exclusions and their effective dates, you may refer to the relevant parts of the USTR and CBP websites, which are available at the following addresses:
https://ustr.gov/issue-areas/enforcement/section-301-investigations/tariff-actions https://www.cbp.gov/trade/remedies/301-certain-products-china
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.
The holding set forth above applies only to the specific factual situation and merchandise description as identified in the ruling request. This position is clearly set forth in Title 19, Code of Federal Regulations (CFR), Section 177.9(b)(1). This section states that a ruling letter is issued on the assumption that all of the information furnished in the ruling letter, whether directly, by reference, or by implication, is accurate and complete in every material respect. In the event that the facts are modified in any way, or if the goods do not conform to these facts at time of importation, you should bring this to the attention of U.S. Customs and Border Protection (CBP) and submit a request for a new ruling in accordance with 19 CFR 177.2. Additionally, we note that the material facts described in the foregoing ruling may be subject to periodic verification by CBP.
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