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.
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.
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.
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.
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.
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.
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.
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.
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.