Is it a doll? An action figure? Only the taxman knows

Many young girls play with dolls. Many young boys play with action figures. Is there a gender bias in the tax law?

Most toys - dolls and action figures included - are manufactured overseas and imported into the United States. The Harmonized Tariff Schedule of the United States imposes an import duty - or tax - on:

"Dolls representing only human beings and parts and accessories thereof: Dolls whether or not dressed: Other: Not over 33 cm in height" and

  • "Toys representing animals or other non-human creatures (for example, robots and monsters) and parts and accessories thereof: Other."

The tax rate on the first category is 12 percent of value, while the tax rate on the second category is 6.8 percent of value.

The United States Court of International Trade (Toy Biz, Inc. v. United States, 248 F.Supp.2d 1234 (2003)) was faced with the question of which of these two categories more aptly described the Marvel Comics characters, including X-Men, Spiderman and the Fantastic Four.

The court concluded that the Marvel Comics figures were not "dolls" and were therefore subject to the lower rate of tax. In reaching its conclusion, the court noted three observations:

  • The figures at issue exhibit at least one nonhuman characteristic. The court did not agree with customs officials that the few nonhuman characteristics the figures possess, such as claws or robotic eyes, "fall far short of transforming [these figures] into something other than the human beings which they represent." In the view of the court, the U.S. tariff schedule is not a straight head count of the human features a figure may possess. The issue is whether the figure as a whole and in a wider context represents a human being. Even one nonhuman feature the figure possesses prohibits its classification as a "doll."
  • The Marvel characters are known in popular culture as "mutants." They are more than (or different from) humans. "These fabulous characters use their extraordinary and unnatural physical and psychic powers on the side of either good or evil. The figures' shapes and features, as well as their costumes and accessories, are designed to communicate such powers," according to the court. "For example, 'Storm' (a tall and thin figure with white mane-like hair and dark skin) … has a lightning bolt as an accessory, reflecting the character's power to summon storms at will. 'Rictor' … has a human appearance but comes with a built-in wheel in the back which when turned makes the figure vibrate and thus is designed to simulate Rictor's 'power to generate earthquake-like vibrations.' 'Pyro' … has a costume that, with two long hoses attached to it, is designed to aid the character's 'mutant ability to control and shape flames.'"
  • The "X-Men" figures are marketed and packaged as "mutants" or "people born with 'x-tra' power." That they are denoted as such by the manufacturer or the importer lends further credence to the assertion that they represent creatures other than (or more than) human beings.

So be careful not to call your child's mutant action figure a "doll." That characterization could mutate into a 76 percent increase in the import tax rate.

"You only have to do a very few things right in your life so long as you don't do too many things wrong."– Warren Buffett

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