In ruling NY N320329 (July 16, 2021), Customs and Border Protection (CBP) discussed the classification of an electric surfboard from China that is put up in a set for retail sale. The surfboard is a designed to surf in water without it needing waves or boats to pull or push it. Rather, it is propelled by a small motor mounted underneath the board on a three-foot mast and a fin that goes into the water. The entire item is made up of the surfboard, a hydrofoil (which is the mast and fin), a battery, and a motor that is controlled by a handheld remote. Additionally, the product comes with the tools and hardware to connect the mast and fin to the surfboard.
Customs defines the term “goods put up in sets for retail sale” as goods which:
- Consist of at least two different articles which are, prima facie, classifiable in different headings;
- Consist of products or articles put up together to meet a particular need or carry out a specific activity; and
- Are put up in a manner suitable for sale directly to users without repacking.
To determine the essential character of the good, CBP referred to General Rule of Interpretation (GRI) 3(b), which states “in part, that goods put up in sets for retail sale shall be classified as if consisting of the component that gives them their essential character.” CBP found that in this case the surfboard imparts that essential character of the set.
CBP determined that the applicable subheading for the electric surfboard is 9506.29.0030, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Articles and equipment for general physical exercise, gymnastics, athletics, other sports…or outdoor games…; Water skis, surf boards, sailboards and other water-sport equipment; parts and accessories thereof: Other…Surf-boards.” The rate of duty is free. Additionally, pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, Chinese products under subheading 9506.29.0030, HTSUS, unless specifically excluded, are subject to an additional 7.5% ad valorem duty rate. As such, the chapter subheading 9903.88.15 must be reported in addition to subheading 9506.29.0030, HTSUS.