CLA-2 CO:R:C:G 086224 MBR
Mr. Mark Brooker
P.O. Box 700883
San Antonio, Texas
78270-0883
RE: Mobil Frac Tank temporary fluid storage tanks
Dear Mr. Brooker:
This is in reply to your letter of December 27, 1989,
requesting classification of Mobil Frac Tank temporary fluid
storage tanks, under the Harmonized Tariff Schedule of the United
States Annotated (HTSUSA).
FACTS:
The "Mobil Frac Tank" (hereafter "Tank") is a mobil temporary
fluid storage tank that measures 38' 8" in length, is 8' in width
and is 13' 2" high when tractor mounted. The Tank has an
overall capacity of 20,000 gallons and weighs approximately
18,000 pounds when empty. The Tank does not transport fluids
(it is not designed to do so) but is situated at an oil rig site
where it holds water or other liquids. When its use is
concluded, the fluid is emptied from the tank, it is hitched to a
truck tractor (by means of a standard fifth wheel) and the Tank
is hauled to another oil rig site. The Tank is designed to be
towed on public ways and meets the Department of Transportation
standards. The blueprints show a single rear axle and dual
wheels (a total of four wheels). The wheel assembly is welded to
the frame and is an integral part of the unit. The tank is made
of steel and has four hatches. The other features include a glad
hand assembly, electrical conduits for lighting, sign plates,
license plate frame with lights, light assembly mounted to
bumper, etc. The Tank does not contain its own pump mechanism.
ISSUE:
What is the classification of a Mobil Frac Tank temporary fluid
storage tank, under the Harmonized Tariff Schedule of the United
States Annotated (HTSUSA)? Is it properly classifiable under
heading 8716, which provides for trailers and semi-trailers, or
is it classifiable under heading 7309, which provides for storage
tanks?
LAW AND ANALYSIS:
The General Rules of Interpretation (GRI's) to the HTSUSA
govern the classification of goods in the tariff schedule. GRI 1
states, in pertinent part:
...classification shall be determined according to the terms
of the headings and any relative section or chapter notes...
Heading 8716, HTSUSA, provides for: "[t]railers and semi-
trailers; other vehicles, not mechanically propelled; parts
thereof."
The Harmonized Commodity Description and Coding System
Explanatory Notes (EN) to heading 8716, page 1439-1440, state:
This heading covers a group of non-mechanically propelled
vehicles (other than those of the preceding headings)
equipped with one or more wheels and constructed for the
transport of goods or persons.
The instant mobil fluid storage Tank is not constructed for the
transport of goods or persons, it is only designed for the
temporary storage of fluids at an oil rig site. Therefore, the
Tank is not classifiable under heading 8716.
Heading 7309 provides for: "[r]esevoirs, tanks, vats and
similar containers for any material (other than compressed or
liquified gas), of iron or steel, of a capacity exceeding 300
litre, whether or not lined or heat-insulated, but not fitted
with mechanical or thermal equipment."
The EN to heading 7309, page 1021, state:
These containers are normally installed as fixtures for
storage or manufacturing use, e.g., in factories, chemical
works, dye works, gasworks, breweries, distilleries and
refineries, and to a smaller extent in houses, shops, etc.
This heading covers containers for any material other than
compressed or liquified gas....
The heading includes:
Petrol or oil reservoirs;...; water storage tanks
(domestic and otherwise);...
Although the containers of heading 7309 are "normally"
installed as fixtures, the transient nature of oil production is
such that the fluid storage tanks in this case must remain easily
movable to another site. Therefore, it is Customs position that
the Mobil Frac Tank is properly classifiable under heading 7309.
HOLDING:
The Mobil Frac Tank temporary fluid storage tank is
classifiable under subheading 7309.00.00, HTSUSA, which provides
for: "[r]esevoirs, tanks, vats and similar containers for any
material." The rate of duty is 2.6% ad valorem.
Items classifiable in subheading 7309.00.00, HTSUSA, which are
the product of Mexico may be entitled to a free rate of duty
under the Generalized System of Preferences (GSP) upon compliance
with all applicable regulations.
Sincerely,
Jerry Laderberg
Acting Director
Commercial Rulings Division