Import duty and import taxes are far and away one of the most confusing subjects for importers to master. Import duty refers to the tax an importer must pay to the US Government in order to bring foreign products into the commerce of the United States.

Import duty can be calculated in a variety of ways, but most import duties are figured as a percentage of the declared value of the commodity. Import duty differs from product to product and is dependent on the commodity being imported, its declared value, its country of origin, and other factors like anti-dumping legislation and quota controls. Import duty values can be as low as zero or as high as 100% (or more) of the product’s declared value.

When is import duty due?

Import duty is due for payment when the goods arrive in the United States at a US Customs port with the intent to unload the goods and enter them into the commerce of the United States.

Who is responsible for paying the import duty?

Paying the import duty is the responsibility of the importer, who is indebted to the Government of the United States for the importation of their goods. Making a payment to a third part (an agent or Customs broker) is not in itself sufficient for repayment. Importers are charged with the responsibility of ensuring that the debt is settled.

How do I pay import duty?

Import duty payments can be made in two ways:

  • Through a licensed Customs Broker (usually by check or bank draft made out to the broker, or separate checks to US Customs and the broker).

  • Or directly via check or bank draft to US Customs.

What if I fail to pay the import duty?

The importer is obligated to pay import duty against any merchandise they’ve commissioned for import. Failure to pay can result in a lien against the merchandise, or in the case of a deceased, bankrupt or insolvent importer, a claim against their estate.

Are there any imported items exempt from import duty?

Some imported items qualify for a duty charge of zero percent, while others are exempted entirely from import duty. Those that are exempted include:

  • Household and personal effects.

  • Books, instruments, and other professional equipment employed overseas and returned.
  • Containers whose contents have been exported and are being returned to the US.
  • Items exported for repair (although import duty may be charged on the repaired portion of the item).
  • Animals (domestic) temporarily exported for pasturage purposes and returned within eight months.
  • Other re-imported items which are specifically allowed for.

How much import duty do I owe?

Import duty is based on the imported item’s Harmonized Tariff Schedule classification. Every item imported into the US is identified by a ten digit HTS classification that determines its rate of duty. Prior to importing an item, first locate its classification number and reference it in the tariff. If your import originates from a country with normal trade relations with the US (not Cuba, Syria, North Korea, etc.) your import duty will be listed next to the item’s classification in the first column. The import duty may be based on a percentage of the declared value, a per-unit minimum charge, its weight or mass, or a combination. You can use an online lookup tool to find hts codes, or you can look them up directly in the Harmonized Tariff Schedule.

Types of Import Duty

What is the estimated import duty?

At the time of import, the import duty paid is based on a reasonable estimate of the import duty due. This amount is only an approximation and is not the finalized import duty total.

What is liquidated import duty?

Import duty that has been finalized by the US Customs Service is referred to as liquidated. Often import duties are liquidated “as entered” under the estimated import duty.

What are marking duties?

Marking duty is assessed to cover additional costs required to properly mark an importer’s goods with the appropriate country of origin marking.

What is countervailing duty?

Countervailing duty is an additional import duty levied by the US Government against foreign countries who subsidize the import of products into the US at the expense of domestic producers. Countervailing import duty is designed to discourage this practice.

What is anti-dumping duty?

Similar to countervailing duty, anti-dumping duty is levied against products imported into the US below their market value. Typically this is done drive domestic producers out of business and control market share.

Conclusion

Although difficult for first time importers, the rules surrounding import duty are standardized from port to port. They are adjusted occasionally with the changing Harmonized Tariff Schedule, but the principles behind them remain the same. Understanding how import duties affect import shipments is an important part of international trade and should be considered carefully prior to import.