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HQ 086224


April 24, 1990

CLA-2 CO:R:C:G 086224 MBR

CATEGORY: CLASSIFICATION

TARIFF NO.: 7309.00.00

Mr. Mark Brooker
P.O. Box 700883
San Antonio, Texas
78270-0883

RE: Mobil Frac Tank temporary fluid storage tanks

Dear Mr. Brooker:

This is in reply to your letter of December 27, 1989, requesting classification of Mobil Frac Tank temporary fluid storage tanks, under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA).

FACTS:

The "Mobil Frac Tank" (hereafter "Tank") is a mobil temporary fluid storage tank that measures 38' 8" in length, is 8' in width and is 13' 2" high when tractor mounted. The Tank has an overall capacity of 20,000 gallons and weighs approximately 18,000 pounds when empty. The Tank does not transport fluids (it is not designed to do so) but is situated at an oil rig site where it holds water or other liquids. When its use is concluded, the fluid is emptied from the tank, it is hitched to a truck tractor (by means of a standard fifth wheel) and the Tank is hauled to another oil rig site. The Tank is designed to be towed on public ways and meets the Department of Transportation standards. The blueprints show a single rear axle and dual wheels (a total of four wheels). The wheel assembly is welded to the frame and is an integral part of the unit. The tank is made of steel and has four hatches. The other features include a glad hand assembly, electrical conduits for lighting, sign plates, license plate frame with lights, light assembly mounted to bumper, etc. The Tank does not contain its own pump mechanism.

ISSUE:

What is the classification of a Mobil Frac Tank temporary fluid storage tank, under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA)? Is it properly classifiable under heading 8716, which provides for trailers and semi-trailers, or is it classifiable under heading 7309, which provides for storage tanks?

LAW AND ANALYSIS:

The General Rules of Interpretation (GRI's) to the HTSUSA govern the classification of goods in the tariff schedule. GRI 1 states, in pertinent part:

...classification shall be determined according to the terms of the headings and any relative section or chapter notes...

Heading 8716, HTSUSA, provides for: "[t]railers and semi- trailers; other vehicles, not mechanically propelled; parts thereof."

The Harmonized Commodity Description and Coding System Explanatory Notes (EN) to heading 8716, page 1439-1440, state:

This heading covers a group of non-mechanically propelled vehicles (other than those of the preceding headings) equipped with one or more wheels and constructed for the transport of goods or persons.

The instant mobil fluid storage Tank is not constructed for the transport of goods or persons, it is only designed for the temporary storage of fluids at an oil rig site. Therefore, the Tank is not classifiable under heading 8716.

Heading 7309 provides for: "[r]esevoirs, tanks, vats and similar containers for any material (other than compressed or liquified gas), of iron or steel, of a capacity exceeding 300 litre, whether or not lined or heat-insulated, but not fitted with mechanical or thermal equipment."

The EN to heading 7309, page 1021, state:

These containers are normally installed as fixtures for storage or manufacturing use, e.g., in factories, chemical works, dye works, gasworks, breweries, distilleries and refineries, and to a smaller extent in houses, shops, etc. This heading covers containers for any material other than compressed or liquified gas....

The heading includes:

Petrol or oil reservoirs;...; water storage tanks (domestic and otherwise);...

Although the containers of heading 7309 are "normally" installed as fixtures, the transient nature of oil production is such that the fluid storage tanks in this case must remain easily movable to another site. Therefore, it is Customs position that the Mobil Frac Tank is properly classifiable under heading 7309.

HOLDING:

The Mobil Frac Tank temporary fluid storage tank is classifiable under subheading 7309.00.00, HTSUSA, which provides for: "[r]esevoirs, tanks, vats and similar containers for any material." The rate of duty is 2.6% ad valorem.

Items classifiable in subheading 7309.00.00, HTSUSA, which are the product of Mexico may be entitled to a free rate of duty under the Generalized System of Preferences (GSP) upon compliance with all applicable regulations.

Sincerely,

Jerry Laderberg

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