Everything You Need to Know About Import Duty and Taxes When Importing Products into the USA
Taxes and import duty are due every time you import goods into the US, whether by a commercial entity or private individual. The method of valuation is free on board or FOB. This means that the taxes and import duty payable are being calculated exclusively on the imported goods’ value. But, certain duties are based par in quantity and part in value. Aside from duty, imports may also be subject to Merchandise Processing Fee and in certain instances, to Federal Excise Tax and sales tax.
Take note that the United States’ Customs Territory includes the 50 states of the US, Puerto Rico and the District of Columbia. Thus, Puerto Rico will apply similar tariff rates and codes as the United States but this has its own unique fiscal jurisdiction.
The Duty Rates
In the US, duty rates can be ad valorem or as percentage of value or these can also be specific or cents or dollars for every unit. The duty rates can range from 0 to 37.5 percent with average duty rate of 5.63 percent. Certain goods will not be subject to duty like antiques more than 100 years old, original paintings and certain electronic products.
The Preferential Duty Rates
The US has signed the Free Trade Agreements with several countries. For entitlement to the preferential tariff treatment, a product should meet the originating criteria established by Rules of Origin of the individual FTAs. A COO or Certification of Origin is needed upon importation so that the preferential duty rates will be applicable.
The Sales Tax
The sales tax will not be automatically charged on the imported goods. But, the CBP or Customs and Border Protection declarations have been made available to the state tax representatives which may claim the state taxes from importers every now and then.
The Minimum Thresholds
Taxes and duty will not be charged when the FOB is as much as $800.
Custom Fees and Other Taxes
The CBP collects federal fees and taxes on behalf of the rest of the federal agencies such as the Internal Revenue Service which depends on the good being imported. The user fees will depend on the mode of transportation and type of entry.
The Federal Excise Tax is being imposed on the imports of tobacco and alcoholic beverages.
MPF or Merchandise Processing Fee is being charged on the information and formal entries. The MPF on the informal entries can be $1, $2, $6, or $9 for every shipment which depends on mode of transportation, and if the entry release is automated or manual and prepared by a personnel from CBP. The MPF on the formal entries as applicable for the imports of commodities more than $2500 has been set at 0.3464% of the goods’ value with minimum charge of $25 and $485 maximum charge.
The Duty Refunds
In the event of overpayment duty, re-export or the return of the imported products to their seller, the importer will be entitled to the duty refund.
If you need any any help, check out this duty Calculator for importing products to the USA. The given link is for the USA, but that website has also other countries listed. On this website you will find more info too.