Wednesday, September 21, 2016

Ruling of the Week 2016.19: Wherein A Christmas Tree is Not Festive

"Ruling of the week," who am I kidding? This one comes to you via an annoying slow GoGo In-Flight connection and an extremely small seat 10C on an American Airlines RJ700 bound for San Antonio. Read it with that in mind. It may not be my best work.

Welcome to fall, the time of year when retailers are filling their shelves with Halloween decorations and their warehouses with of Christmas goods ready to be unleashed on the shopping public. It is also a good time of year to revisit the question of when decorative items are classifiable as festive goods of Heading 9505 and, therefore, entitled to duty-free entry. That is exactly the question Mr. Christmas Inc. asked Customs and Border Protection to reconsider is HQ H258442 (Aug. 18, 2016). Seriously, the importer was Mr. Christmas. I did not make that up.

The merchandise is a set of tapered glass cones that are 13.5” tall and 3.5” at their widest. The cones contain randomly placed LED lights that are activated by switch located at the bottom of the base. The manufacturer ensures that LED lights are placed at the tip of each cone, to create a glow at the tip when the LED lights are on. The glass cones are sold in sets of three in one of the following colors: green, gold, red, silver, or blue.  Here is a picture taken from the ruling itself.

Stop right there. You tell me: Is that a Christmas decoration? Of course it is. How do I know? The same way I know pornography: I know a Christmas decoration when I see one. We have been down this road here and here.

Over the years, I have devised an essentially foolproof test for determining whether something is a festive article related to a Christian holiday. Just ask a rabbi. If the rabbi says, “I would never have that tchotchke in my home,” it is a festive article. I can pretty much guaranty that this item looks enough like a Christmas tree to keep it off the mantel at the rabbi’s house.

Sadly, that is not the law. According to Customs and Border Protection, to be classified in Chapter 95 as a festive article the item must be (1) closely associated with a festive occasion and (2) must be used or displayed principally during that festive occasion. This is not a low bar. In fact, the item must be so closely associated with the festive occasion that using during another time of year would be aberrant.

According to Customs, it would not be aberrant to display these glass cones at times other than Christmas. Keep in mind that they are sculptures of trees, lighted, and in sets of green, red, blue, silver, and gold. I am getting all festive just thinking about them. But, CBP noted that the cones lack indications of branches, leaves or other characteristics of trees. Moreover, the beading on the cone is not ball-shaped or otherwise indicative of Christmas tree ornaments and the interior lights do not stay in place to ensure that the tip of the “tree” is lighted. Consequently, the art critics at CBP determined that the cones do not closely resemble Christmas trees. Keep in mind that Customs previously ruled that a lighted penguin wearing a Santa hat was sufficiently associated with Christmas to be a festive article of Chapter 95.

Mr. Christmas argued that its (his?) marketing information showed that these cones are sold as Christmas decorations around the holiday. CBP dismissed this by noting contrary evidence and the fact that marketing is only one piece of evidence to be considered. One piece of contrary evidence was a QVC clip in which the designed or a similar item suggests that the cones are appropriate decorations year-round.

In the end, Customs was not convinced that the lighted tree sculptures are Christmas decorations. This is an admittedly subjective analysis and I know that CBP is required to draw lines around product classifications. I just think these items are on the festive side of that line. CBP classified them in 7013.99.90 as glassware at 7.2% ad valorem. My guess is that this may not be the last we see of these glass cones.


Anonymous said...

Too bad for the importer that the trees/cones are not emblazoned with the "Mr. Christmas" logo.

Heather said...

But this isn't a Christmas tree. It isn't decorated like one, with decorations that look like ornaments or any kind of dressing on the top (star, angel, whatever the poison), and trees of similar shape and color assortments (though possibly of different materials, such as wire) are available year-round in craft and home decor stores. They can be found grouped together as a "focal point" in HGTV-style magazines when they're doing features on rustic country log-cabin-type homes (are those currently in? or are we still doing that granite/stainless steel robotic bachelor pad look?) at any time of year.

Penguins in Santa hats, though... those are just foolish to leave grouped around in your home in the dead of summer, unless of course you're realllllly into the "Christmas in July" concept. Santa hats are intrinsically tied to Christmas, making the penguin wearing them a festive article. You wouldn't really go around wearing a Santa hat in lieu of a toque while shoveling the very merry snow that litters a February driveway or sidewalk any more than you'd wear one for warmth on a cold mountain July night. I probably would, but I am self-admittedly very lazy and would don the first hat I pulled out of a box in search of warmth.

The penguin and tree are two different articles, and while I can see some validity in Mr. Christmas's argument for the festiveness of the tree, I have to say, Customs' doesn't not make sense. The colors and LED lights aren't enough to link it to Christmas as a festive article.

Anonymous said...

Another strike against IOR is that evergreen trees are evergreen year-round. An artistic evergreen tree does not a Christmas tree make.