COURT ISSUES NEW DECISION ON THE CLASSIFICATION OF COSTUMES

In a ruling appropriately issued on Halloween, the U.S. Court of International Trade issued its latest decision on the tariff classification of costumes.  Rubies Costume Co. v. United States (https://www.cit.uscourts.gov/SlipOpinions/Slip_op17/17-147.pdf).

The items at issue were the jacket, pants, gloves and toy sack portions of a nine-piece Santa costume.  The importer claimed duty-free treatment under the tariff provision covering “festive articles” as the Santa suit would only be worn during the Christmas season.  The government countered that each component of the costume should be classified within the relevant apparel or accessory provision - carrying high rates of duty (e.g., 32% for the jacket and 28.2% for the pants).

The decision turned on whether the Santa costume constituted “fancy dress” (a category that is specifically excluded from classification within the festive goods provision).  Referencing earlier precedent, the Court considered whether the Santa costume was well-made (which would favor classification as fancy dress, regardless of the festive purpose) as opposed to flimsy (which would preclude classification as apparel).  

Pointing to various features, the Court concluded that the costume was well made.  For example, in the case of the jacket, the Court pointed to the presence of a lining, a full zippered opening (hidden by a left-over-right faux fur cover held in place by two metal snaps), long sleeves with turned edges (trimmed with white faux fur cuffs) and a straight cut, hemmed and trimmed bottom.  The costume was also a ‘dry clean only’ item that was intended to survive multiple wearings and cleanings over several Christmas seasons.

The decision essentially preserves the status quo in the area of costume classification.  Determinations as to when a costume is sufficiently flimsy so as to be eligible for duty-free “festive” treatment are highly subjective and made on a case-by-case basis.  We understand that Customs has been withholding action on pending cases and refusing to issue rulings on certain types of costumes pending the issuance of the Rubies Costume decision.  As a result, we expect greater attention to be paid to this area.

Please contact Arthur W. Bodek or any of our other partners with any questions or to discuss the potential impact of this decision on your import program.


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