Santa gets duty free treatment?
Ask the Attorney – November 2021
It’s the holiday season which means increased imports of festive articles. Over the years there have been significant changes in the law as to whether such articles may be afforded duty free treatment.
Question: When is a plastic lawn penguin considered a festive article?
Answer: When it is wearing a Santa hat!
Harmonized Tariff Schedule (HTS) Chapter 9505 provides duty free treatment for “Festive, carnival or other entertainment articles...: Articles for Christmas festivities and parts and accessories thereof”. Purely decorative articles may be classified as festive articles, if: (1) the articles are closely associated with a festive occasion; and (2) the articles are used or displayed principally during that festive occasion such that use or display at any other time would be aberrant. See Michael Simon Design, Inc. v. United States, 452 F. Supp 2d. 1316 (Ct. Int’l Trade 2006), aff’d 501 F. 3d1303 (Fed. Cir. 2007) reh’g denied(Fed. Cir. April 2, 2008).
In 2008Custom considered the classification of a beaded penguin figure designed to be used on the lawn or inside the home as a holiday decoration. The figure was 14inches high and made of a coated metal frame in the shape of a penguin. The frame was decorated in multiple plastic beads in red, green, orange and clear. The beads were lighted with bulbs that ran through the frame on white PVC-covered wires equipped with a plug to be input into a power source. Customs determined that the proper classification of item was under Chapter 36 as an article of plastic with a duty rate of6.5%. See N035321 dated August 18, 2008.
Seven years later, in 2015, Customs revoked N035321 on the basis that the ruling had failed to recognize that the penguin was wearing a Santa hat. The agency found that a Santa hat, “a cone-shaped hat with a fur pom-pom at the top and a fur brim to fit around the head,” is an article traditionally associated with Christmas and the Christmas season and therefore the penguin figure wearing a Santa hat should be entitled to duty free treatment under Chapter 95. See HQ H039566 dated March 11, 2015.
It bears noting that the festive article provision will not apply to baking pans, cookie cutters, cookie stamps and presses that are used in preparation for a festive occasion unless the item bears a symbol or decoration depicting a recognized holiday. Alternatively, if an importer can show that an undecorated item is only used or displayed during a festive occasion it may be afforded preferential treatment.
If you have any questions or would like additional information about the importation of festive articles, please contact Taylor Pillsbury at firstname.lastname@example.org