Customs Duty

A tariff or tax known as customs duty is imposed on merchandise when it is carried across international boundaries. The goal of customs duty is to safeguard each nation's economy, population, employment opportunities, environment, etc. by regulating the flow of commodities into and out of the nation, particularly those that are restricted or prohibited.

Import Duty Tax

A product that would be sold for less than its fair market value (anti-dumping) may be subject to import tariffs or custom duty tax in order to protect local manufacturing, to punish the country of import, or simply as a means of raising money for the government.

It is possible to express customs tax rates as a percentage of value or as dollars and cents per unit. The 2011 schedule has rates that range from 0% to 33% based on value. Rates could be based on the appropriate units for the specific category of commodities (per ton, per kilogram, per square meter, etc.). Certain obligations are split between value and quantity. Prior to recently, the United States had one of the lowest customs tariffs in the entire world, averaging just 3%. However, the US has the highest tariff rate among all developed countries as of May 2019 with a trade-weighted tariff rate of 4.2% due to increasing duties on Chinese goods.

How Is Customs Duty & US Import Tax Calculated?

Whether import tax and customs taxes are levied depends on two factors:

  • Country of import and product,
  • Product (as defined by the HS code).

Please be advised that contrary to rumors, international freight shipments costing less than $2,500 are still subject to Customs duty.

This false impression was most likely created by a mix-up between two other rules and the international freight customs duties rules. These additional regulations state that packages with a value of less than $2,500 can enter customs "informally" and that Customs is less strict when inspecting express freight (international courier) shipments.

Process Of Levying Duty

An airway bill or bill of lading with a description of the commodities is typically included with imported goods. They must be accompanied with an invoice that details the transaction value in order to be assessed for customs duties. The importer or CBP classifies the commodities listed on the bill of lading and invoice, and then computes the duty. Prior to the items being imported, the whole amount of this charge is due and payable immediately. The importer now does the majority of the assessments of commodities, and documentation is electronically submitted to CBP.

CBP grants permission for the import of the goods after duties have been paid. They can then be taken out of the foreign-trade zone, bonded warehouse, or port of entry.

If certain products are exported without being significantly altered after duty has been paid, the importer may request a refund of the duties. Duty drawback is the procedure for requesting a refund..


  • Customs duty, tariff, import tax, or import tariff are other names for import duty.
  • When imported products initially enter the country, import duty is assessed.
  • A number of international organizations and treaties directly affect import taxes.
  • Twitter
  • Facebook
  • LinkedIn
  • Instagram

Recommended Reading

SaaS Bookkeeping: Streamlining Finances in the Digital Age

SaaS bookkeeping transforms bookkeeping into a strategic asset by leveraging cloud technology, automation, integration, and flexible subscriptions. Key features like real-time reporting, customizable dashboards, and mobile access help businesses stay agile and competitive. Choose the right SaaS solution by considering business needs, scalability, user experience, and pricing to ensure long-term success and growth.

Read more

Tax Calendar 2024

The Tax Calendar 2024 provides a roadmap for individuals and businesses, highlighting key dates and actions mandated by federal tax laws, to ensure compliance and financial efficiency.

Read more

How Proper Bookkeeping Streamlines Your Business Tax Filing

Blend bookkeeping & tax services for streamlined business finances: Uncover deductions, simplify tax filing, year-round support. Partner with Fincent for a stress-free financial journey.

Read more