CLA-2-87:OT:RR:NC:N2:201
Robert Grasing
Sandler, Travis & Rosenberg PA
24 Smith Street
Pawling, NY 12564
RE: The tariff classification of a new Hyundai motor vehicle
Dear Mr. Grasing:
In your letter dated December 24, 2021, you requested a tariff classification ruling on behalf of your client, Hyundai Motor Manufacturing Alabama, LLC, located in Montgomery, Alabama.
The item under consideration has been identified as a new Hyundai motor vehicle, the Santa Cruz Sports Adventure Vehicle (“Santa Cruz”). The Santa Cruz is a 4-doored vehicle, with seating for five, a 2.5L spark-ignition internal combustion gas engine, and an open rear cargo area with a stated payload capacity of 1,750 lbs.
In your request, you suggest classification in 8703.23.0140, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Motor cars and other motor vehicles principally designed for the transport of persons…including station wagons and racing cars: Of a cylinder capacity exceeding 1,500 cc but not exceeding 3,000 cc: Other: New: Other”. We disagree.
Classification of goods in the Harmonized Tariff Schedule of the United States (HTSUS) is governed by the General Rules of Interpretation (GRIs). GRI 1. states “ ... classification shall be determined according to the terms of the headings ... .” Heading 8704 provides for “Motor vehicles for the transport of goods”.
The Explanatory Notes (ENs) to the Harmonized Commodity Description and Coding System, which represent the official interpretation of the tariff at the international level, facilitate classification under the HTSUS by offering guidance in understanding the scope of the headings and the GRIs. The ENs to 87.04 states:
The classification of certain motor vehicles in this heading is determined by certain features which indicate that the vehicles are designed for the transport of goods rather than for the transport of persons (heading 87.03). These features are especially helpful in determining the classification of motor vehicles, generally vehicles having a gross vehicle weight rating of less than 5 tonnes, which have either a separate closed rear area or an open rear platform normally used for the transport of goods, but may have rear bench-type seats that are without safety seat belts, anchor points or passenger amenities and that fold flat against the sides to permit full use of the rear platform for the transport of goods. Included in this category of motor vehicles are those commonly known as “multipurpose” vehicles (e.g., van-type vehicles, pick-up type vehicles and certain sports utility vehicles). The following features are indicative of the design characteristics generally applicable to the vehicles which fall into this heading:
(b) Presence of a separate cabin for the driver and passengers and a separate open platform with side panels and a drop-down tailgate (pick-up vehicles);
(d) Presence of a permanent panel or barrier between the area for the driver and front passengers and the rear area;
(e) Absence of comfort features and interior finish and fittings in the cargo bed area which are associated with the passenger areas of vehicles (e.g., floor carpeting, ventilation, interior lighting, ashtrays).
As you state in your request, the Santa Cruz is a four-door vehicle combining the features of a sport utility vehicle (SUV) with the open cargo bed of a compact pickup.
General Note 3. (h) (vi) to the HTSUS states “ ... a reference to “headings” encompasses subheadings indented thereunder.”
Therefore, the applicable classification subheading for the Hyundai Santa Cruz Sports Adventure Vehicle will be 8704.31.0020, HTSUS, which provides for “Motor vehicles for the transport of goods: Other, with spark-ignition internal combustion piston engine: G.V.W. not exceeding 5 metric tons: G.V.W. not exceeding 2.5 metric tons.” The rate of duty will be 25% ad valorem.
Please note that modifications to the Harmonized Tariff Schedule of the United States (HTSUS) [to align the HTSUS on the 2022 version of the Harmonized Commodity Description and Coding System] pursuant to Section 1206 of the Omnibus Trade and Competitiveness Act of 1988 are forthcoming. These modifications, made by Presidential Proclamation 10326 and set forth in Annexes I, II.A, and II.B of U.S. International Trade Commission Publication 5240, will be effective on January 27, 2022. To the extent that the modifications to the HTSUS impact the classification of the merchandise subject to this ruling, you may submit a new ruling request at that time.
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 Matthew Sullivan at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division