US import duty

Free calculation example for import taxes

How much is import duty? Who pays the import tax? What other fees should I consider? 

Read on for all you need to know about charges when importing goods into the US.

What is import duty?

Import duty, which is also called customs duty or tax, is paid when bringing goods into the US from another country. However, there are some exemptions. 

Goods may fall under the threshold for customs duty, meaning there’s no fee to bring them to the US. And the US has agreements with some countries which mean import tax is reduced or waived for goods originating in some locations. 

You’ll also find different limits and rules, depending on whether you’re bringing home goods for personal use after travel, receiving goods by mail, or running a commercial import business. Import duty rules and tariffs can be complex, so make sure you do your research to avoid unexpected fees or complications when importing into the US.

How to pay import tax?

The way you pay import tax will depend on the way you’re importing goods.

1. Duty for Travelers

When bringing goods back home with you after a trip, you’ll usually be able to pay any applicable customs tariff at your point of entry to the US.

2. Customs tax on online orders

If you’re having goods mailed to you, the process depends on the value and type of item. Goods worth USD2,000 or less are usually released by customs authorities, and you’re then required to pay any duties when you collect them at the post office.

3. Commercial import duties

Commercial shipments have more complex import requirements. You may find it easier in this case to use a customs broker to deal with the documents required. You can then pay your broker for their fees as well as import duties. Or, if you go it alone, you’ll pay the customs authorities directly when your goods are released.

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Don’t forget that you can save when you’re trading internationally, if you use your Wise for business account.

You can settle supplier invoices and pay customs duty in multiple currencies, using the real exchange rate and low conversion fees.

How to calculate import duty in the US?

Commercial import duty calculations don’t have to be tricky. However, you do need to know the commodity code – or HTS code – for the goods you’re importing. Once you have that, you’ll be able to calculate the import duty required. Here’s an example:

Let’s say you’re importing men’s leather belts, with a value of USD10,000.

First you’ll need to find the right HTS code. You can get this using an online HTS lookup tool. In this case, the number you need is 42033000 which covers leather and leather composite belts.

You can then find the applicable levels of customs duty depending on where you’re importing from. Our shipment comes from a country which enjoys normal trade relations with the US, so the tariff is 2.7%.

That means you’ll need to pay customs duty of USD270 for this shipment, plus any other applicable fees.

Custom duties exemptions

If you’re bringing souvenirs home from a vacation, or having something sent to the US that you’ve purchased online, you may benefit from customs duty exemptions. It’s worth noting that exemption rules are complex and depend on the goods in question, and where they originate. 

Here are some examples. If you’re traveling home from a vacation trip you’ll probably have a duty free exemption of USD800. This limit is raised to USD1,600 if you’re arriving from a US insular possession like Guam. However, if you’re out of the US for less than 48 hours, or travel frequently you might find your allowance is reduced to USD200.

If you’re importing goods you bought on the internet worth USD800 or less, they’ll usually be cleared automatically by the customs authorities with no fees. However, there may be duties if you’re sending an item to someone else as a gift, which is worth over USD100. 

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Import duties - FAQs

1. Where and how to pay import duties?

How you pay import duties will depend on how the item arrives in the country. You can work with a customs broker for larger shipments, or pay at a post office for a lower value item. If you’re traveling and bringing in goods for personal use you may find your purchases are subject to customs duty exemptions. If there is duty to pay, you can usually settle the bill at your point of entry into the US.

2. How to find import duty rates?

Commercial import duty rates depend on the type of product and the country of origin. You can look up the product using its HTS code, and find the relevant US import duty. Your customs broker can help with this - or the customs authorities may prepare the invoice for you for lower value items.

3. Import taxes vs custom duties

Usually these phrases are used interchangeably. Customs duties are tariffs or taxes which must be paid when importing certain goods into the US.

4. What is commodity code?

A commodity code is used to identify products being imported into the US, to make sure the correct import tax is paid. The code used is based on the Harmonized Tariff System and also known as an HTS code.

What is the merchandise processing fee (MPF)?

The merchandise processing fee (MPF) is charged by the US customs authorities based on the value of the item being imported. There are different charges depending on the type of shipment. Lower value items may be charged USD2 - USD9, while higher value shipments are charged a percentage of the value which can run from USD27.23 to USD528.33.