Question: Sports Graphics, Inc. imports Chill brand coolers from Taiwan. Chill coolers have an outer shell...

Transcribed Image Text:

Question: Sports Graphics, Inc. imports "Chill" brand coolers from Taiwan. Chill coolers have an outer shell of vinyl, with handles and pockets, and an inner layer of insulation. In a recent lawsuit, the issue was whether "Chill" coolers were "luggage" or "articles used for preparing, serving or storing food or beverages," as Sports Graphics claimed. Who was the other party to the dispute, why did the two sides care about this, and what arguments did they make? Strategy: The Customs Service (the other party) classifies goods and then imposes an appropriate ad valorem tax. What is at stake, of course, is money. (See the "Result" at the end of this section.)