US Customs info post!
– Section 321 – Tax free imports for $800 or less.
– Taxation duties applied on higher value purchases
– Form 5106 requirements on $2500 or higher imports
***THE MORE YOU KNOW***
I wanted to share an informational post regarding customs. It can get very complicated, and so hopefully shedding some light on this issue should help you be more confident in purchases in the future!
US Customs: Duty Waiver Section 321 —
Section 321 is that special tax-free zone of $800 or less purchases are duty and tax free! Hooray!
Here are some more specific details:
–> If your seller writes the value in another currency, then Tax is applied!! J-Ports values all imports in USD on packages going to the US.
–> The $800 limit is for personal importations only (so businesses technically do not apply to this tax free threshold). If you are a business, just ensure that your PayPal name is used, and not your business name. [Extra info… customs don’t usually follow this to a golden rule. 99% of packages even addressed to businesses will still get through tax free Under $800]
–> The $800 limit is DAILY, but if you get two items arrive on the same day that have a combined total of $800 or more, you get taxed on both! [sometimes a Friday and Saturday package could be on the same flight… as it is counted on the day of importation… not the day of sale]. HOWEVER because it is very very hard to check this; again, 99% of packages that are under $800 will still get through as long as they are packed and invoiced separately.
–> Section 321 is applied on packages under $800…that have all paperwork filled out correctly. If there are mistakes on the paperwork, customs do have the right to apply duties on your package.
–> Tax imposed on importations must be paid by the customer. So even if the exporter uses the wrong currency, or flubs the paperwork completely, the customer must pay for tax duty! i.e. Make sure you buy from the pros (Like J-Ports)!
——————–
Purchases OVER $800:
Duties into the US are typically some of the world’s lowest tax rates. Europeans often get hit with 40% bills, and Canadian and Australian pay an extra 10% VAT/GST on top of the duty fees! Duty rates vary a LOT! However here are the most common duty rates that we use:
Leather Sports style bag: 4.5% duty
Small Laminated Plastic Wallet/Pouch 4.6% + 1.2cents
Leather Shoulder Bag 8% Scarf silk mix: 1.2%
Cotton (woven) Handbag 6.4% Nylon Handbag 7.6%
USED Clothing (Bulk) – 0%
USED Shoes – 0% —
That’s right! Used clothing is free…. IF you purchase more than 1 item!!! If clothes are individually declared, they can go up to about 20% – but if the clothes are in used condition, and sent in a weight bundle, 0% tax is applied. As you can see above, even if you purchase over $800, duty typically is not too much of a hit for United States residents.
Imports on over $2500; Form 5106
US residents must fill out at least once the 5106 Form when importing a shipment of a value over $2500. This for looks scary… but honestly it’s a piece of cake. You should only have to fill out your name, address and SSN (if you are personally importing) or EIN number (if you are importing through a business). There are a LOT of questions, but it can mostly be left blank. You should only have to do this ONCE, but if your regular supplier doesn’t have your EIN or SSN on file, you will have to do this every time. Border Protection needs a 5106 form for every business relationship between you and a supplier once the orders go over $2500.
But the more you understand, the better you can do some smart shopping! Sorry if this did get a bit complicated. The actual tax rules are MUCH more difficult, and so I tried to translate this into the easiest to understand format possible. Have a great day everyone!