Customs Duty

Customs Duty

Customs Duty: Do you need to pay it?

According to the definition given by Customs Border Protection (CBP), Customs Duty is a tariff or tax imposed on goods when transported across international borders. Customs duty is also known as import duty, tariff, or import tariff. The purpose of Customs Duty is to protect each country’s economy, residents, jobs, environment, etc.   Customs clearance controls the flow of goods, restrictive and prohibited goods in and out of the country. Each article has a specific duty rate, which is determined by a number of factors, including where the article is coming from, where it was made, and what it is made of.

Customs Border Protection (CBP) is the U.S. agency responsible for collecting duty and for controlling the flow of goods, including commercial and retail items, animals, personal effects, and hazardous goods, in and out of the US.  Goods not yet cleared through customs are held in a customs bonded facility, until processed. All authorized ports have secure customs bonded warehouses.

How Are Duty Rates Determined?

The Harmonized Tariff System (HTS) provides duty rates for virtually every item that exists. The HTS is a reference manual that is several inches thick and is maintained by the World Customs Organization (WCO). Items are given international recognized codes and descriptions. The rates of duty are based on the commodity and may also differ depending on what country the imported goods were manufactured. Preferential duty rates may apply where a Trade Agreement exists between two or more transacting countries.

Gallagher Transport’s experienced brokers spend months learning how to properly classify commodities in order to determine its correct duty rate.   For instance an example that US International Trade Commission gives in order to explain Duty Rates is: What if you wanted to know the rate of duty of a wool suit. A classification specialist will need to know, does it have darts? Did the wool come from Israel or another country that qualifies for duty-free treatment for certain products? Where was the suit assembled, does it have any synthetic fibers in the lining?

Your broker will take the time to ask you a lot of questions about the products you are importing. It is important to get the duty classification correct in order to give an accurate duty rate, and ensure correct filing with the CBP. Please be aware that the duty rate you request is only as good as the information you provide and the CBP has the final determination.

Free Quote

If this all seems confusing, don’t worry, we can help! Our experienced brokers ask you all the questions they need to know in order to give you an estimate on your customs duty.


Call us today on 303-365-1000 for a free estimate of your customs duty.