CIT Reconfirms and Expands Scope of "Festive Articles" in Wilton Decision

June 20, 2007

Recently, the Court of International Trade (CIT) held in Wilton Industries, Inc. v. United States that utilitarian articles associated with holidays and special occasions may be classified as “festive articles” free of duty.  The Wilton court followed the rulings of the Court of Appeals in Midwest of Cannon Falls and Park B. Smith wherein a “festive article” was defined as something that is “closely associated with a festive occasion” and is “used or displayed principally during that festive occasion.”  The previous court decisions had only addressed holiday festive articles but the Wilton court expanded the scope of this tariff provision to include items closely associated with non-holiday private celebrations such as weddings (cake plates, pillars and columns) and birthdays (“Happy Birthday” bakeware).   The court has once again rejected the government’s attempts to limit the scope of “festive articles” to non-utilitarian items and to items with holiday themes.

Although the tariff statute was amended as of February 3, 2007, in a way that eliminates this favorable duty free treatment, the opportunity still exists to claim duty refunds on most of the utilitarian festive articles imported in 2006.  Our experience has been that festive articles with Christmas and Halloween themes predominate over all other festive themes combined, and that this merchandise is generally imported in the few months prior to the holiday or in the second half of the year.  Given the time frames involved in filing protest duty refund claims, timely claims are still possible on shipments from the second half of 2006.  If you imported any festive merchandise last year and paid duty on such imports, please contact your nearest BR&C office to learn more about how to claim duty refunds.

BR&C has numerous festive articles clients and is defending another favorable trial court decision (Michael Simon Design, Inc. v. United States) that reclassified holiday sweaters as duty free festive articles.   The government has once again appealed.  Alan Goggins, a partner at the New York office of BR&C, will be arguing the case on Michael Simon’s behalf on July 11 with a final appellate decision expected later this fall.