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US Import Tax

US Import Tax

Important Things to Know Before an Overseas Shopping Spree

Whether it’s fashion, art, wine, tobacco products, or rare jewelry, shopping for items that are hard to come by in the US is yet another perk of international travel. But when you shop abroad, don’t be surprised when Customs and Border Protection asks for duties to be paid.

Some travelers get caught unaware of US tax duty to be paid on items they purchase outside of the country. World travelers should make a point of understanding import taxes so there are no surprises after their next international shopping spree.

Personal Items: Do I Really Need to Declare?

Upon arrival in the United States from a foreign country, US Customs and Border Protection (CBP) agent(s) will meet you at the aircraft before the door opens. It’s standard procedure for border security to make sure the people aboard the aircraft match the passenger and flight crew manifest sent to them in advance.

After a general security sweep of the aircraft, you will be asked directly whether you have brought goods to “declare”. If you haven’t made any purchases outside the US, then it’s a simple answer: no. If you have made purchases, however, then you might need to provide receipts for each item so the appropriate tax can be collected.

Here are some of the thresholds and categories that require you to declare items purchased abroad:

  • Duty-free exemption on personal goods ($200, $800, $1,600 thresholds)If the goods you purchased abroad total more than $1,600 in purchase value, then you will always need to provide receipts for the items when asked. The tax rates to be collected will depend on whether the goods are clothing, alcohol, jewelry, tobacco, furniture, etc.

    The rates vary from less than 5% up to 40% depending on their import category. The list is much too long to cover here, but some basic research will help you to determine how much tax you will be expected to pay when you return with your imported goods.

    The threshold of $800 generally applies to Caribbean Basin or Andean countries, and certain EU countries with which the US has pre-negotiated trade tax on certain goods that cross the border. The full list can be found here.

    If you have been out of the US for less than 48 hours or more than once in a 48-hour period, your exemption limit is a mere $200. Any items purchased for more than $200 are therefore subject to US import tax and must be declared.

Artwork Tax in a Nutshell

Many clients who fly with us back to the United States bring collector’s items along with them. Original artwork, created by hand, is one of the few high-value categories of items that exist in its own special CBP heading of duty-free exemption.

If you buy art for your private collection and not for commercial purposes, you must declare its value, but you will not be required to pay any excess tax so long as the documentation supports the authenticity of the piece(s) you have purchased.

We’ve had numerous clients ask us and their flight brokers whether the art they are bringing home will be subjected to import tax. US Customs and Border Protection has drafted a helpful document outlining the policies regarding original artwork.

Keeping it Simple

While we are experts in the field of private jet charter, we are not by any means experts in international tax law. We are sharing this information to raise general awareness around the declaration of goods purchased abroad. If you require specific guidance about tax strategies for large purchases outside the United States or commercial trade in general, contact a US Customs broker or seek appropriate legal counsel.

US CBP retains the right to search all personal belongings of individuals re-entering the United States. If you fail to declare items purchased abroad, then you could be slapped with fines on top of the taxes or have your items seized. We have never had this happen to any of our clients, but we’ve heard stories of it happening to others.

Always play it safe — declare your goods purchased abroad and avoid unnecessary hassle.

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