How to Import into the US

Question

Do I have to pay import duty on items that have been exported from the United States that are being returned?

Answer

If you have an item that was previously resident in the United States, but for some reason was exported and is now being returned, be sure to inform US Customs about its status. Items previously exported are often considered duty free! This means that although you might have to pay a small entry fee, your goods will not be assessed taxes as a percentage of their value.

The logic behind this duty free status is simple – US Customs wants importers to pay an import tax at least once on items not made in the United States. That means that in general you can claim a duty free status under chapter 98 of the US Harmonized Tariff Schedule on items that were either made in the USA, or had already been imported previously.

When might this apply?

This scenario might come into play if:

• one of your products was exported, used in a foreign country, and is now being returned;
• you’re exporting something for repair;
• your item was exported as an exhibit for a trade show or similar;
• your item is a “tool of trade” used abroad temporarily.

Gotcha’s to avoid:

• Just because your entry is duty free does not mean you can avoid filing import paperwork. You might also be subject to processing fees.
• If your item was “advanced in value” while overseas, you will probably owe duty on the value of the improvement. Example: you exported a car made in the US and had a French radio installed. When the car returns, you will owe duty on the value of the radio but not the car.
• Depending on the product, there may be a three year window between the exportation and duty free re importation of your item.

Import tax or import tariffs (also known as import duties) in the United States generally refer to the taxes and fees charged by US Customs when importers bring goods into the country. They are assessed by government employees with US Customs at the port of entry, and are paid by the importer of record.

All goods entering the United States are subject to the same import procedure and the same tariff (tax) assessment, although every product has its own duty rate and some have a duty rate of zero!

Import taxes are the second largest source of revenue for the United States behind the Internal Revenue Service.

In addition to being revenue source, import taxes are used to control domestic market conditions and as a political tool. US Customs and the US International Trade Commission will raise and lower import taxes on particular goods to give domestic producers an edge over foreign imports. To exert political pressure, certain countries may be assigned a higher duty rate on their exports or may be embargoed (locked out) to prevent trade.

The primary criteria for import tariffs and taxes are:

• Country of origin
• Commodity type
• Intended use

and are determined using the US Harmonized Tariff Schedule, a yearly publication listing duty rates for a wide variety of import commodities. The USHTS also includes procedures and guidelines for determining import tax rates.

Question

I am trying to start a business in jewelry and clothes from India. I do not know how and where to start from. I want to make sure I have all the necessary licenses or documents that I may need in order to do this….please advice. Where do I start from? Which licenses do I may need? Any legal documents I may require to prove that I do have a small business in items such as jewelry, clothes home decor, etc. The jewelry is all artificial and clothes are our everyday usage type, nothing pricey or outrageous. All answers are welcome – thanks for your time.

Answer

India is an excellent choice for trading. They have a thriving textile industry (textiles are items made of fabric or cloth like clothing, table cloths, etc.) and are eager to do business with the United States. Before starting your business, you’ll want to check with your city, county, or state resources to confirm what requirements you’ll need to meet in order to operate. That’s outside the scope of this article, so I will leave that part to you. So far as importing your items are concerned, you’ll need the following:

Vendors

If you do not have one already, locating a reputable vendor will be a difficult part of the process. One of the advantages of dealing with Indian importers is the widespread use of English, which should make things easier. Once you have found a vendor, consider placing a sample or small quantity order to get an idea of transit times, quality of the goods, actual pricing after shipping, insurance, etc.

Licensing

No license is required to import the items you have described from India (or most countries). You can file the import paperwork yourself at your local port office, but since the process can be complicated, I highly suggest you consult with a Customs broker who is licensed to transact business on your behalf.

Documentation

All import shipments coming into the United States must be accompanied by the following documentation:

• Commercial Invoice stating the country of origin of the goods, their value, the currency used, and the number of units being imported.
• Packing List – listing quantity and weight for the goods.
• Customs form 3461 – A formal paper request to Customs to allow the entry of your import. A licensed Customs broker will be able to provide one to you.
• Customs form 7501 – This form serves as a receipt for US Customs and yourself. It lists the items being imported, their value and the approximate duty you will be expected to pay. This will also be provided by a Customs broker.

Other considerations

Before importing, take some time to research or pay for a sit down visit with your import broker. Talk to them in detail about the type of goods you intend to import (including pictures or samples) and where they will be coming from. They will be able to provide an estimate for the amount of duty you will be responsible for, the classifications for your merchandise, and will be able to advise you on any special trade programs that might be applicable.

Please note: This article is intended for informational purposes only and is not specific legal advice. As an importer, it is your responsibility to meet all the legal requirements for importing goods.