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HQ 950224

Nov 22 1991
CLA-2 CO:R:C:F 950224 JGH

CATEGORY: CLASSIFICATION

TARIFF NO.: 3303.00.3000

District Director of Customs
200 East Bay Street
Charleston, S.C. 29401-2611

RE: Decision on Application for Further Review of Protest No. 1601-91-100171, on the applicability of an IRS tax on Eau de Colognes and similar scent products other than perfumes.

Dear Sir:

This protest was apparently forwarded to this office for a definition of the type of fragrances the Federal Excise Tax applies to, since there is no dispute on the classification under the Harmonized Tariff Schedule (HTSUS).

FACTS:

The merchandise in question consists of entries made in 1990, in behalf of L'Arome (USA) Inc., of colognes, eau de perfum and eau de toillette, all fragrances classified under the provision for perfumes or toilet waters containing alcohol in subheading 3303.00.30, HTSUS. In addition to the duty, they were assessed additional duty (Federal Excise Tax) under 26 U.S.C. 5001 of $13.50 per proof gallon.

Laboratory reports on samples show that they have an alcohol content of about 84 percent and an essential oil content by weight of 13 or 14 percent.

ISSUE:

Whether the IRS tax under 26 U.S.C. 5001 applies to fragrance products other than perfumes.

LAW AND ANALYSIS:

The Explanatory Notes to the HTSUS provide an interpretation of the provisions of the tariff on the international level. For heading 3303 they state that perfumes and scents generally consist of essential oils, floral concretes, absolutes or mixtures of synthetic odoriferous substances, dissolved in highly concentrated alcohol. Toilette waters, eau de Cologne, and similar scent products are said to contain smaller proportions of essential oils, etc., generally in less concentrated alcohol than the perfumes.

Under 26 U.S.C. 5001, only perfumes are subject to the Federal Excise Tax of $13.50 per proof gallon. In general, the industry considers perfumes to contain between 15 to 30 percent essential oils, while eau de cologne and eau de toillette and similar products contain from 5 to 15 percent. Another factor considered by the industry is price; as a rule, perfumes are considerably more expensive than eau de cologne and eau de toillette.

The L'Arome products here contain between 8 and 14 percent essential oils. Therefore, they are not perfumes and, thus, not subject to the Federal Excise Tax.

HOLDING:

You are directed to allow the protest in full. A copy of this decision should be attached to the Customs Form 19 and provided to the protestant as part of the notice of action on the protest.

Sincerely,

John Durant, Director

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