us-cbp-cross-rulings-hq-544157•HQ 544157: Valuation of Exempted Component
HQ 544157: Valuation of Exempted Component
us-cbp-cross-rulings-hq-544157HQ 544157: Valuation of Exempted ComponentGuidance
Native CBP ruling rendition. Applicability is fact-specific; modification/revocation relationships and original publisher date are retained. Publisher sentinel year0001 means unknown date, not a historical legal adoption.
HQ 544157
June 22, 1988
CLA-2 CO:R:C:V:TLL 544157
CATEGORY: Valuation
David Newman, Esq.
Siegel, Mandell & Davidson
One Whitehall Street
New York, New York 10004
Re: Valuation of Exempted Component
Dear Mr. Newman:
This is in reply to your letter dated December 1, 1987,
regarding the value of fabricated components under section 10.17,
Customs Regulations (19 CFR 10.17)
ISSUE:
Whether the Harbor Maintenance Tax which attaches pursuant
to 26 U.S.C. 4461 et seq. is part of the value of fabricated
components to be subtracted from the full value of an assembled
article.
LAW AND ANALYSIS:
19 CFR 10.17, the applicable portion of the Customs
Regulations provides:
10.17 Valuation of exempted components.
The value of fabricated components
to be subtracted from the full
value of the assembled article is
the cost of the components when
last purchased, f.o.b. United
States port of exportation or
point of border crossing as set
out in the invoice and entry
papers, or, if no purchase was
made, the value of the components
at the time of their shipment for
exportation, f.o.b. United States
port of exportation or point of
border crossing, as set out in
the invoice and entry papers.
- 2 -
However, if the appraising officer
concludes that the cost or value
of the fabricated components so
ascertained does not represent
a reasonable cost or value, then
the value of the components shall
be determined in accordance with
section 402 or section 402a,
Tariff Act of 1930, as amended
(19 U.S.C. 1401a, 1402).
The applicable portion of 26 U.S.C. 4461 provides:
(a) General Rule - there is hereby imposed a tax on
any port use.
(b) Amount of Tax. - The amount of the tax imposed
by subsection (a) on any port use shall be an amount
equal to 0.04 percent of the value of the commercial
cargo involved.
(c) Liability and Time of Imposition of Tax. -
(1) Liability. - The tax imposed by subsection
(a) shall be paid by-
(A) in the case of cargo entering the United
States, the importer,
(B) in the case of cargo to be exported
from the United States, the exporter, or
(C) in any other case, the shipper.
(2) Time of Imposition. - Except as provided
by regulations, the tax imposed by subsection
(a) shall be imposed-
(A) in the case of cargo to be exported
from the United States, at the time of
loading, and
(B) in any other case, at the time of
unloading.
Under section 4462, the term "port use" is defined as:
(A) the loading of commercial cargo on, or
(B) the unloading of commercial cargo from, a
commercial vessel at a port.
Insofar as the definition of F.O.B. is concerned, the
Customs Service would consider an F.O.B. sale as one in which the
seller's unit price includes all costs and risks of the goods
until such time as they are delivered on board the exporting
carrier. Accordingly, since F.O.B. charges include all costs
accruing on goods until such time as they are delivered on board
the exporting carrier, and since the tax basis under 26 U.S.C.
- 3 -
4461 depends upon "port use", and port use is defined to include
the loading of commercial cargo, the value of fabricated
components under 19 CFR 10.17 would include the Harbor
Maintenance Tax established under 26 U.S.C. 4461.
HOLDING:
The value of fabricated components set forth in 19 CFR 10.17
would include the Harbor Maintenance Tax established under 26
U.S.C. 4461.
Sincerely,
John Durant, Director,
Commercial Rulings Division
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