CIT Finds Target Light Strings Not Classifiable as Christmas Tree Lights

Strings of lights imported by Target are not classifiable as lights for Christmas trees, the Court of International Trade said in a July 2 decision. Overturning CBP’s classification, the court found Target’s lighting sets aren’t meant for Christmas trees because they don’t have green wiring and are advertised for Halloween or for general use.

Both Target and the government agreed that the lights should be classifiable in Chapter 94. On liquidation, CBP had classified Target’s lighting sets as miniature series wired lighting sets of a kind used for Christmas trees in subheading 9405.30.0010, dutiable at 8 percent. Target argued that instead they should be classified in subheading 9405.50.8000 as “other electric lamps and lighting fittings,” with a 3.9 percent duty.

As imported by Target in 2012, the lighting sets come with either black or white cords with multi-colored lights. The sets with black cords are only sold by Target during the Halloween season. The white-corded lights are sold all year, though they are put into a special section for Christmas decorations during the Christmas season. Neither type has any mention or indication on their packaging that they are meant for use as Christmas lights.

Subheading 9405.30.0010 is for lights “of a kind used for Christmas trees,” indicating that it’s a “principal use” provision. In order to determine the correct classification, CIT said it would first have to decide the principal use of the lighting sets, then whether they are “commercially fungible” with Christmas tree lights.

Turning first to the principal use of Target’s lighting sets, CIT found they are not principally for use on Christmas trees. Both the black and white cords would clash with the green foliage of a Christmas tree. The black-corded lights indicate use for Halloween on their packaging. The white-corded lights are sold on special displays during the Christmas season, but “that is indicative of only one of the many uses for which these general decorations are designed,” CIT said.

As for commercial fungibility with Christmas lights, CIT reviewed the “Carborundum factors” and found further reason not to classify Target’s lighting sets in CBP’s preferred subheading. The black-corded sets are more appropriately viewed as Halloween decorations, and are advertised in that way to consumers. The white cords demonstrate “that use on white Christmas trees makes up an insignificant portion” of the sets’ designed use as a general decoration, and the white-corded sets are not generally sold as Christmas lights, CIT said.

“An independent examination of the goods establishes the articles’ respective principal uses as Halloween lights and general decorations,” CIT said. “Further, the undisputed material facts demonstrate that the goods are not commercially fungible with the green-corded light sets. As a result, the subject articles are classifiable under subheading 9405.40.8000, and the court grants Target’s motion for summary judgment,” it said.

(Target Gen. Merch., Inc. v. U.S., Slip Op. 19-80, CIT # 14-00331, dated 07/02/19, Judge Goldberg)

(Attorneys: Patrick Gill of Sandler Travis for plaintiff Target General Merchandise, Inc.; Peter Mancuso for defendant U.S. government)