Give me a break! Expanded tax and duty breaks for U.S. importers
The Trade Facilitation and Trade Enforcement Act (TFTEA) was signed into law in February of this year and brought in regulatory changes in several areas, including tax and duty exemptions at the U.S. border.
Tax and Duty Breaks According to TFTEA
Included in the TFTEA is an amendment to Section 321 of the Tariff Act, which provides that eligible entries – those valued below a certain dollar amount – can be imported free of taxes and duties. Up until March of this year, the threshold for such an exemption – the de minimis value – was $200 USD. Under the recent amendment, this value has been increased to $800 USD.
Benefits for US Importers
This means importers may generally bring in up to $800 USD worth of product into the U.S. free of duties and taxes (commonly called “clearing under Section 321”) and without the requirement that the entry be formally filed with U.S. Customs.
What to Be Aware Of
Importantly, there are exceptions and conditions that importers must be aware of.
- The shipment must be imported by a single person on a single day.
- Consolidated shipments addressed to one ultimate consignee will be considered one importation.
- Alcoholic beverages or perfume containing alcohol do not qualify (except where the aggregate fair retail value in the country of shipment of all merchandise contained in the shipment does not exceed $5 USD).
- No cigars or cigarettes will be exempted.
- Exemption is not allowed if Customs and Border Protection believes that the shipment is one of several lots covered by a single order or contract that was divided for the express purpose of securing free entry or for the purpose of avoiding compliance with any pertinent law or regulation.
- Exemption is not allowed in the case of any merchandise of a class or kind provided for in any tariff-rate quota.
- Exemption is not allowed if one or more Partner Government Agencies require information to fulfill their regulatory requirements.
Be Honest and Accurate
U.S. Customs is a serious place that doesn’t take lightly to fudging of numbers. Shippers, carriers, and importers who plan to make use of the de minimis exemption must have a clear understanding of the requirements and exceptions. Even if you know what’s required, you should still communicate with your carrier(s) to ensure they are clear on what is expected of them.
If in doubt, consult with an experienced customs broker who is familiar with the ins and outs of Customs requirements – and who keeps on top of regulatory changes.
Cole USA is Here to Help
Contact your local Cole USA office for additional information or assistance on this or any other U.S. Customs matters.
Information provided by: U.S. Customs Dept. - Cole International
