Explainer: How do Schedule B numbers, HTS codes, and HS codes work?
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We understand that the logistics industry involves complex processes, regulations, and definitions that can be overwhelming to navigate. Cole's Explainer series breaks down key concepts into bite-size knowledge that's easy to consume.
In this Explainer, we examine what Schedule B numbers, HTS codes, and HS codes are and how they work in the U.S.
What are Schedule B numbers, HS codes, and HTS codes?
Schedule B Numbers & HS Codes
Schedule B codes are a 10-digit number used by the U.S. government to both classify and monitor exports from the U.S. The first six digits of the Schedule B number consist of the Harmonized System (HS) Code number. HS codes are the standard numerical method for customs authorities across the globe, making it easier for nations to classify imported and exported goods.
There are more than 9,000 Schedule B numbers, so the process can seem overwhelming at first glance. However, the U.S. Census Bureau offers a search engine tool that can help you find the Schedule B number that matches your goods.
The Harmonized Tariff Schedule (HTS) is an internationally recognized tariff or numbering system used to classify goods within international commerce. The HTS is also used to determine other reporting requirements and the applicability of various trade programs and import restrictions. Importers who buy goods overseas and bring them into the US also need HTS codes for reporting to CBP prior to arrival, including party-specific information and the origin of the goods.
CBP uses the HTS codes and other information to determine whether an item is subject to duties and taxes when it enters the country. The HTS codes are used by U.S. Customs and Border Protection (CBP) and other governmental agencies to determine rates of duty and admissibility of the merchandise.
How to find a Schedule B code for your products
There are thousands of codes available to classify goods, so you will need to access the Schedule B search tool to find the right one. The Schedule B search engine allows you to describe your product and then narrows down the search by letting you select the assumed characteristics of the products. This process provides you with a Schedule B number and a list of legal notes related to the goods.
Determining the correct number code can be extremely complex, so the Census Bureau offers training resources and assistance to properly classify the products you’re bringing over the border. Scenarios where you’re shipping multiple items as part of a set, such as a bicycle that the buyer assembles, can require additional clarification when the sets aren’t straightforward to classify. Businesses that import textiles and apparel sets must refer to a unique set of rules that govern those types of Schedule B numbers.
In some cases, importers will need to use the Customs Rulings Online Search System (CROSS) to retrieve legal rulings that determine the classifications of specific types of goods.
What are HS codes used for?
Companies exporting to the United States will need the correct HS code for the products they send across the border. HS numbers depend on both the product and the country that exports the product, so the same product will likely have a different number from one country to another. Businesses should provide both the Schedule B number and the HS code as part of the total export and import shipping process.
HS codes are also used to:
- Classify shipments of goods to foreign countries.
- Provide Automated Export System (AES) reports for shipments that require licenses or have a value above $2,500.
- Determine what the import duty rates will be for the product.
- Check if products qualify for reduced tariffs according to free trade agreements.
- Determine if there are other governmental reporting requirements.
- Fulfill a complete set of documentation required to ship products, alongside paperwork such as commercial invoices and certificates of origin.
- Collect data for research stats and market research studies.
- Comply with U.S. laws and regulations.
The more you know!
We invite you to continue growing your knowledge base by exploring our earlier Explainer posts:
U.S. Customs. It's what we do.
- 6 reasons why your goods are held up at Customs
- Five biggest challenges in the Freight Forwarding industry
- Freight updates November 15, 2023: latest news and updates on the worldwide supply chain
- CARM R2 Update - Get ready for implementation
- How to reduce taxes and tariffs when importing goods repaired across the border