CLA-2-85:OT:RR:NC:N2:220
Katie de Koning
SMART Technologies ULC
600, 214 - 11 Ave SW
Calgary
Canada
RE: The tariff classification of the Smart Board from Mexico or China
Dear Ms. de Koning:
In your letter dated December 5, 2024, you requested a tariff classification ruling.
The merchandise under consideration is referred to as Smart Boards, which is described as touchscreen display monitors consisting of an LCD display having an integrated infrared touch surface, speakers, and numerous input and output sockets, such as USB and HDMI connections. There are three Smart Boards under consideration, identified as Models KS-U65E, KS-U75E, and KS-U86E that incorporate the same features/functions but are differentiated by the size of the screen. Based on the information provided, the Smart Boards are principally used with automatic data processing (ADP) machines, such as a personal computer, laptop, or an optional computing module that you refer to as the OPS module (Open Pluggable Specification), where users view and interact with programs and/or from the connected ADP machine. We note that at the time of importation, the Smart Boards do not incorporate an OPS module.
In your request you suggest that the Smart Boards are classified in 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. However, in their entirety, these touchscreen monitors are more specifically provided for elsewhere in the tariff. Therefore, classification in subheading 8528.52.0000, HTSUS, is not applicable.
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 Smart Boards 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.
In order for an input/output machine to be classified under heading 8471, the device must meet the terms of a unit of an ADP system as specified in Legal Note 6(C) of Chapter 84, HTSUS. In this regard, Note 6(C) to Chapter 84 defines the term “data processing units” for purposes of heading 8471 as follows:
(i) It is of a kind solely or principally used in an automatic data processing system;
(ii) It is connectable to the central processing unit either directly or through one or more other units; and
(iii) 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 6(C), the unit must not be excluded from any of the conditions provided for in Note 6(D) and Note 6(E) of Chapter 84, HTSUS. While monitors and projectors are excluded from classification in heading 8471, the subject Smart Board is not merely a display monitor, but instead meets the conditions set forth in the legal notes for ADP systems by comprising two of the three components within the system, namely the input unit and the output unit. As the touchscreen and the LCD panel are permanently combined into a single device, and the display unit is principally used within an ADP system for the purpose of performing a data processing function, the subject Smart Boards will be classified in accordance with GRI 1 as a combined input output unit for an ADP system.
The applicable subheading for the Smart Boards, Models KS-U65E, KS-U75E, and KS-U86E, 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 general rate of duty will be Free.
Pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, products of China classified under subheading 8471.60.1050, 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 8471.60.1050, 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