Auto Parts Offered for Sale to Race Teams Then Returned Aren't Duty Free 'Tools of Trade,' DOJ Says

A trailer with auto parts and tools exported to Canada to support Porsche race teams and then returned by Porsche does not qualify for duty-free treatment as “tools of the trade” under subheading 9801.00.05 because the tools were never declared to CBP, and the parts don’t qualify as tools, the Department of Justice said in a brief filed May 26 responding to Porsche’s motion for judgment in the case (see 2104270030).

Porsche claims the racing equipment should have been duty free under Harmonized Tariff Schedule of the United States subheading 9801.00.85 for “professional books, implements, instruments, and tools of trade, occupation, or employment, when returned to the United States after having been exported for use temporarily abroad, if imported by or for the account of the person who exported such items.” But DOJ says the goods don’t meet the requirements for classification in that subheading.

According to DOJ, for classification as duty-free tools of the trade, the imported goods must be “(i) professional implements, instruments, or tools; (ii) of a trade, occupation, or employment; (iii) returned to the United States after having been exported for use temporarily abroad; and (iv) imported by or for the account of the person who exported such goods,” the brief said. Porsche “fails to make this showing.”

Porsche considered the actual tools in the truck to be part of the truck itself, and did not list them on a certificate of registration as having been exported to Canada, nor did it list them on the entry. CBP did not assess any duty on the tools, DOJ said. “Any imported merchandise that was either not registered at exportation or was acquired in Canada is ineligible for ‘tools of trade’ classification under subheading 9801.00.85, HTSUS, because they could not have been ‘returned to the United States after having been exported for use temporarily abroad,’ as they were never exported in the first place,” DOJ said.

And the remaining goods are not tools, so can’t be considered “tools of the trade,” DOJ said. And at the race, they were offered for sale to race teams, not for loan. “The declared merchandise consists primarily of spare parts and accessories that were exported only to be offered for sale, and then returned to the United States if they were not sold in Canada. Such items do not meet the requirements articulated in subheading 9801.00.85, HTSUS, because they are not implements, instruments and tools of an occupation or trade, and were not exported for use temporarily abroad,” DOJ said.