Porsche Moves for Judgment on Claim That Car Parts Temporarily Exported May Return Duty-Free
Porsche Motorsports North America filed a motion for summary judgment in the Court of International Trade, hoping to sway the court that automobile repair tools and parts the company exported to Canada then brought back into the U.S. should return duty free. In the April 26 filing, Porsche argued for classification under Harmonized Tariff Schedule subheading 9801.00.85 -- the subheading granting duty-free access to goods returning to the states after having been exported for use temporarily abroad -- claiming the parts are “tools of the trade” of car racing.
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The company exported three shipments of “automotive replacement and repair tools, parts and accessories” in a trailer to Canada as “emergency” support to Porsche race teams at three GT3 Cup Challenge races in 2014. For each trailer, it filed CBP Form 4455 Certificates of Registration indicating its intent to temporarily export them. The parts were sold only to race teams, not the general public, but sold parts were not subsequently returned to Porsche Motorsport. After each of the three races, Porsche Motorsport reimported the remainder of the shipments. CBP liquidated the entries in their regular respective subheadings in the tariff schedule, prompting the automaker to protest then file its CIT challenge.
The case received a partial ruling by CIT in 2018, where the court found no issue with how the parts were used in Canada but rather found that neither Porsche nor the government presented enough evidence whether the goods could be considered “tools of the trade” (see 1808230023). In response to that ruling, Porsche put forth multiple definitions of terms such as “trade” and “tools of trade” to illustrate how its car parts qualify under that definition. “The [Porsche] automotive components for the race vehicles are necessary for the work performed by the mechanics employed by the independent Porsche racing teams,” the company said. “Without access to these automotive repair parts, the vehicles could not be brought back to operation for continued participation in the race.”
Porsche also sought to clear up how the goods were used following their export to Canada, declaring that the parts and tools were exported with the intention of being made temporarily available to the race teams then returned. The government countered by claiming that the tools were merely brought to Canada to be sold. Citing court precedent, Porsche said that the merchandise doesn't need to be used by the person who exported it in order to be classified in 9801.00.85.