Internal Advice; user fees; 19 U.S.C. § 58c; 19 C.F.R. 24.22; Canadian pilot cars

HQ 229664 January 16, 2003 LIQ-15 229664 LLB Category: Liquidation United States Customs Service North Atlantic Customs Management Center 10 Causeway Street Boston, Massachusetts 02222 Attn: Lori E.Shepard, Operations Specialist Re: Internal Advice; user fees; 19 U.S.C. § 58c; 19 C.F.R. 24.22; Canadian pilot cars Dear Ms. Shepard: We have reviewed your office’s internal advice request of October 2, 2002. We have considered the request and have made the following decision. Facts You indicate the following facts in your internal advice request. The vehicles in question are automobiles or pickup trucks that accompany oversized loads to their destination in the United States. These vehicles are also known as pilot vehicles. See HQ 115532 (March 8, 2002). For each load, there are two vehicles—one in the front of, and one behind, the truck carrying the oversized load. The purposes of these vehicles are to provide guidance, using radio communications, on road conditions and safety hazards to the main load, as well as to serve as warning to other motorists. You state that the pilot vehicles are required by law in many, if not all, states and provinces. The pilot vehicles do not carry cargo; however, they may carry additional safety equipment such as ropes, lights, etc., and additional crew. Issue Whether pilot cars are required to pay user fees pursuant to 19 U.S.C. § 58c and 19 C.F.R. § 24.22  Law and Analysis The various fees to offset the costs of processing arrivals into the Customs territory of the United States of certain vehicles, vessels, and aircraft are set forth in 19 U.S.C. § 58c. Included in these fees is a $ 5.00 fee for the cost of processing the arrival of a commercial truck. The regulations promulgated under the authority of the foregoing statute define a commercial truck as a: . . . self-propelled vehicle, including an empty vehicle or a truck cab without a trailer, which is designed and used for the transportation of commercial merchandise or for the transportation of non-commercial merchandise on a for-hire basis. 19 C.F.R. § 24.22(c)(1). In interpreting the above regulation, the Customs Service has interpreted the term “commercial truck” to include any vehicle carrying commercial merchandise including, but not limited to, tractor-trailer units; pick-up trucks; leased or rented trucks; dump trucks or similar single unit vehicles; vans; and automobiles, taxis, and buses. HQ 111587 (April 15, 1992). Neither the regulations nor the statute define “commercial merchandise.” Webster’s II New College Dictionary (1999) defines “commercial” as “1. a. of or relating to commerce b.) engaged in commerce c. involved in a work designed or planned for the mass market. . .” Commerce is defined as “the buying and selling of goods esp. on a large scale.” Merchandise is defined as “goods or commodities that may be bought or sold.” You assert that the pilot trucks will carry safety equipment. Insofar as the equipment would be transported for hire, e.g. incident to the movement and transportation of the wide load--commercial merchandise, the pilot trucks would be subject to the user fee. However, even if the pilot vehicles arrived empty, they would still be subject to the user fee because the sole use of the pilot vehicles is for the commercial purpose of moving the wide-load--commercial merchandise. Further, we note that the only exemption from the user fee provided for in 19 U.S.C. § 58c for commercial trucks provides that “no fee may be charged . . .for the arrival of any (A) commercial truck . . . that is being transported, at the time of arrival, by any vessel that is not a ferry.” See 19 U.S.C. 58c(b)(7)(A); 19 C.F.R. § 24.22(c)(1). Insofar as the vehicle in question is not being transported by a vehicle, it clearly does not fit within the exemption. Holding Canadian pilot vehicles which enter the United States are subject to the $5.00 user fee pursuant to 19 U.S.C. § 58c insofar as they are used in the transportation of commercial merchandise and they do not qualify for the statutory exemption. Sixty days from the date of the decision, the Office of Regulations and Rulings will make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.ustreas.gov, by means of the Freedom of Information Act, and other methods of public distribution. Sincerely, Myles Harmon, Acting Director Commercial Rulings Division