CLA-2-94:OT:RR:NC:5:130
Mrs. Denise Rosa
Pedro L. Carmona, Inc.
Calle Acacia 3
San Juan, PR 00920
RE: The tariff classification of a prefabricated building from China
Dear Mrs. Rosa:
In your letter, dated July 15, 2024, you requested a binding tariff classification ruling on behalf of your client, Amilkar Velazquez Rosario. The ruling was requested on a prefabricated housing structure. Product information was submitted for our review.
The product under consideration is a 40-foot, freestanding housing unit. The frame is constructed of galvanized steel and the outer wall, roof, and base surfaces are also galvanized steel. The sides are mostly glass window surfaces. The unit has two bedroom chambers, a kitchen/open space, and a bathroom. There are cabinets and a sink built into the kitchen and bathroom fixtures built into the bathroom. The unit is a dwelling for multiple people. It is imported complete and is not designed for assembly with other housing units. The unit is substantial and is built to resist the elements.
Note 4 to Chapter 94, Harmonized Tariff Schedule of the United States (HTSUS), defines the term prefabricated building:
For the purposes of heading 9406, the expression "prefabricated buildings" means buildings which are finished in the factory or put up as elements, entered together, to be assembled on site, such as housing or worksite accommodation, offices, schools, shops, sheds, garages or similar buildings.
The instant unit is finished in the factory and functions as housing accommodation. It meets the term prefabricated building. Note 4 also defines modular building units:
Prefabricated buildings include modular building units of steel, normally presented in the size and shape of a standard shipping container, but substantially or completely pre-fitted internally. Such modular building units are normally designed to be assembled together to form permanent buildings.
The instant unit, while constructed of steel and pre-fitted internally, it is not designed to be assembled together with other units to form a permanent building. Therefore, this unit is not a modular building unit.
The applicable subheading for the prefabricated housing structure will be 9406.90.0130, HTSUS, which provides for Prefabricated buildings: Other: Of metal: Other. The rate of duty will be 2.9 percent ad valorem.
Please note that the Explanatory Notes to Heading 9406 provide that only built-in equipment normally supplied is to be classified with the buildings. Electrical, HVAC, sanitary equipment (baths, sinks, toilets), and cabinets are examples of goods that are classified with the prefabricated building. Furniture, appliances, and decorative items must be classified separately.
Pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, products of China classified under subheading 9406.90.0130, 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., 9903.88.03, in addition to subheading 9406.90.0130, 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 https://ustr.gov/issue-areas/enforcement/section-301-investigations/tariff-actions and https://www.cbp.gov/trade/remedies/301-certain-products-china, respectively.
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 https://hts.usitc.gov.
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 Laurel Duvall at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division