Section XVI Note 2

Section XVI Note 2 is one of the most important — and most frequently litigated — notes in the entire HTS. It governs the classification of parts of machinery and electrical equipment in Chapters 84 and 85.

The note creates a three-step hierarchy:

1. 2(a) — Parts that are themselves goods included in any of the headings of Chapters 84 or 85 are classified in their own respective headings (e.g., an electric motor used as a part of a machine is classified as a motor in heading 8501, not as a part of the parent machine).
2. 2(b) — Other parts, if suitable for use solely or principally with a particular machine, are classified with the machine they belong to (or in residual "parts of" headings 8409, 8431, 8448, etc.).
3. 2(c) — All other parts are classified in heading 8487 (machinery parts not specified elsewhere) or 8548 (electrical parts not specified elsewhere).

In practice, parts disputes in Chapters 84 and 85 almost always come down to whether 2(a) or 2(b) applies — and that determines whether the part is classified by its own nature or by reference to the machine it serves.