Import duty & taxes when importing into the United States

Posted by: Norka M. Schell, International Lawyer

Law Offices Of Norka M. Schell, LLC

www.lawschell.com

Import duty and taxes are due when importing goods into the United States whether by a private individual or a business entity.  The valuation method is FOB (Free on Board), which means that the import duty and taxes payable are calculated exclusively on the value of the imported goods.  However, some duties may be based part in value and part in quantity. In addition to duty, imports may be subject to a Merchandise Processing Fee, and in some cases to sales tax, and Federal Excise Tax.

Duty Rates vary from 0% to 37.5%, with the average duty rate being 5.63%. 

 Preferential duty rates - United States has signed Free Trade Agreements ("FTA") with a number of countries. To be entitled to preferential tariff treatment, a good must meet the "originating" criteria as set out on the Rules of Origin of individual FTAs.  A Certificate of Origin (COO) is required upon importation for preferential duty rates to apply. 

Sales tax is not automatically charged on imported goods.  However, Customs and Border Protection (CBP) declarations are made available to state tax representatives that may occasionally claim state taxes from the importer. 

Minimum thresholds - Duty is not charged if the value of the imported goods is up to US$200.

Other taxes and custom fees - Customs and Border Patrol (CPB) collects federal taxes and fees on behalf of other federal agencies, like the Internal Revenue Service, depending on the commodity being imported.  User fees depend on the type of entry and mode of transportation.

* Federal Excise tax is imposed on imports of alcoholic beverages and tobacco.

* Merchandise Processing Fee (MPF) is charged on formal and informal entries:

- MPF on informal entries is US $2, US$6, or US$9 per shipment, depending on whether the entry release is manual or automated, and whether it is prepared by CBP personnel.

- MPF on formal entries (for imports of goods valued over US$2500) is set at 0.3464% of the value of the goods with a minimum charge of US$25 and a maximum of US$485.

Finally, in case of overpayment of duty or returns of imported products to the seller, the importer might be entitled to a duty refund.  

More information on import duty and taxes when importing into the United States, please contact the Law Offices Of Norka M. Schell, LLC at (212)564-1589.