The tariff classification of the USB Audio Speaker System from Malaysia

NY C85310 April 3, 1998 CLA-2-85:RR:NC:MM:109 C85310 CATEGORY: Classification TARIFF NO.: 8518.29.8000;8524.91.0030 Ms. Renee E. Stein Microsoft Corporation Customs Manager Microsoft Corporation One Microsoft Way Redmond, WA 98052-6399 RE: The tariff classification of the USB Audio Speaker System from Malaysia Dear Ms. Stein: In your letter dated March 4, 1998 you requested a tariff classification ruling. The USB Audio Speaker System is boxed as a set. The system is designed for use with a personal computer (PC). It consists of a subwoofer unit, left and right loudspeakers, cables and Microsoft CD software. The right loudspeaker has controls for mute, bass, volume and a LED Status Indicator. The subwoofer unit is the central node of the system. All inputs/outputs connect to it. It contains four channels of Class D power amplification (left speaker, right speaker and two subwoofers), audio and USB interface circuitry, control circuitry and active and passive loudspeaker components. The unit contains a digital signal processor and supports various software functions on the PC. The PC software included with the device is required to enable these features. Explanatory Note 85.18(B) states, concerning loudspeakers: [m]atching transformers and amplifiers are sometimes mounted together with loudspeakers. The HTSUS provisions which merit consideration are: 8471.60 Automatic data processing machines and units...[i]nput or output units... 8518.29 Loudspeakers...[o]ther. Neither the loudspeakers nor the digital signal processor can be said to impart the essential character to this system set). Therefore, the USB Audio Speaker System is classified in accordance with General Rule of Interpretation 3(c), "...under the heading which occurs last in numerical order among those which equally merit consideration." The applicable subheading for the USB Audio Speaker System will be 8518.29.8000, Harmonized Tariff Schedule of the United States (HTS), which provides for "Loudspeakers, whether or not mounted in their enclosures: Other". The rate of duty will be 4.9 percent ad valorem. Chapter 85, Note 6, HTSUS, states that: [r]ecords, tapes and other media of heading 8523 or 8534 remain classified in those headings, whether or not they are entered with the apparatus for which they are intended. The applicable subheading for the Microsoft CD software will be 8524.91.0030, Harmonized Tariff Schedule of the United States (HTS), which provides for "Prepackaged software for automatic data processing machines, of a kind sold at retail." The rate of duty will be 1.3 cents/m2 of recording surface. 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 Eileen Kaplan at 212-466-5673. Sincerely, Robert B. Swierupski Director, National Commodity Specialist Division