Importers are expected to pay an import tax on virtually every item they import, but few know how much they owe until their shipments arrive in the US.
Many importers are overcharged by US Customs at the border because they did not purchase a copy of the US Harmonized Tariff Schedule and properly classify their imports.
Import taxes are based on the type of item you are importing and where it’s coming from.
How do I know how much I will owe for my imports?
Import taxes for every item imaginable can be determined using the United States Harmonized Tariff Schedule (HTSUS, USHTS, or HTS for short).
This exceptionally large book breaks down into categories virtually every product and commodity imported into the United States. Each line item contains a ten digit classification number, a product description, and a duty rate. Find your item and apply its rate to calculate what you will owe.
Do I have to classify my item?
Every item that comes into the US must be classified with the Harmonized Tariff Schedule. If you don’t classify your item, US Customs will charge you a fee to do it for you.
Before you let Customs classify your product, remember that import tariffs are the second largest source of revenue next to the IRS.
What are Import Taxes?
Import tax (also known as an import duty or import tariff) is collected by US Customs on every import that comes into the US.
Import taxes are a source of income for the US Government and are a way to restrict or facilitate the import of certain commodities.
There are three primary purposes behind the USHTS:
1. The US Harmonized Tariff Schedule is used to assess import duties and taxes on imports. The US Customs Service is the second largest source of revenue for the US Government, second only to the Internal Revenue Service.
2. The HTS is used to track import and export statistics for the US Department of Census. Each month hundreds of billions of dollars in goods and services are imported and exported from the United States. The Tariff Schedule is designed so that the Federal Government can effectively track the import and export of individual product groups into and out of the United States.
3. Lastly, the USHTS is a tool to enforce the United States political agenda. By raising and lowering duty rates and import restrictions from specific countries or around the world, the United States can exercise a certain amount of economic influence.
You can use the Tariff Schedule to calculate duties and taxes on imports. All imported products must be classified with the HTS before they will be allowed into the United States.