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April 2025, question 74

Valuation, Appraisement and Duty Assessment · Tariff lookups: rates, units, programs

Company A, based in the United States, sells and rents high end sports cars. In 2015, Company A imported an Italian sports car from Italy and paid all applicable duties and taxes. In 2020, Company A leased the car to a client in China and exported it to him. The car did not meet the specifications agreed upon in the contract; however, the client continued to drive it for the remainder of the lease. The sports car was not subjected to any repairs or alterations while in China. In 2024, Company A then reimported the car into the United States. What statement is correct upon reimportation into the United States?

  1. The sports car may be imported duty-free under subheading 9801.00.10, HTSUS.
  2. The sports car may be imported duty-free under subheading 9802.00.50, HTSUS, because no repairs or alterations were made while in China.
  3. The sports car may be imported duty-free as it did not meet the specifications agreed to in the contract and was returned.
  4. The sports car may be imported duty-free because the car was leased out by the importer.
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CBP's answer: D. D: The sports car may be imported duty-free because the car was leased out by the importer.

Subheading 9801.00.20 gives free entry to previously imported duty-paid articles reimported, without being advanced in value or improved in condition, after export under a lease or similar use agreement, by the person who imported and exported them. Company A fits, so the leasing is the reason for duty-free entry (D). The car was not a U.S. product (9801.00.10), no repairs were done (so 9802.00.50 does not apply), and 9801.00.25 for non-conforming goods needs export within three years.

after having been exported under lease or similar use agreements 9801.00.20
was exported from the United States under a lease or similar use agreement 19 CFR 10.108

Search for: exported under lease or similar use agreements

CBP's key cites: HTSUS 9801.00.20; HTSUS 9801.00.25; HTSUS 9802.00.50; 19 CFR 10.108

Question and key from CBP's April 2025 exam and answer key. The walk-through is ours; quotes are from the pinned editions in the reference viewer (HTSUS 2026 Basic, 19 CFR 2025 edition).