Import duty is a tax the U.S. government charges on goods you bring into the country from abroad

When you order something from overseas or a company imports products to sell in the United States, import duty (also called tariff or customs duty) is a percentage or flat fee added to the cost. The duty is calculated based on what the item is, where it comes from, and how much it weighs or costs. You pay it to U.S. Customs and Border Protection (CBP) before the goods clear customs and reach you.

The amount varies widely. A shirt from Vietnam might have a 16% duty, while a car part from Japan could be 2.5%, and some items have no duty at all. The government uses these duties to protect domestic industries, generate revenue, and sometimes to enforce trade policy with specific countries. If you're ordering a single item online, the seller or shipping company often collects the duty at delivery. If you're importing goods for business, you'll work with a customs broker who calculates and files the duty payment on your behalf.

Key Takeaways

  • Import duty is a tax on goods entering the United States, calculated as a percentage of the item's value or as a flat fee depending on the product type and country of origin.
  • U.S. Customs and Border Protection (CBP) collects the duty before releasing your shipment, and the amount is based on the Harmonized Tariff Schedule, which classifies every type of product.
  • For personal online purchases, the shipping carrier or marketplace often collects duty at delivery; for business imports, a customs broker handles the calculation and payment.
  • Duty rates change based on trade agreements, tariffs imposed on specific countries, and the classification of the item, so the same product can cost different amounts depending on when and where you order it.
  • If you believe the duty charged is wrong, you can file a protest with CBP within one year, but you must pay the duty first to take possession of the goods.

How the duty amount is determined

The Harmonized Tariff Schedule (HTS) is the official list that CBP uses to assign a duty rate to every product that enters the country. Each item gets a 10-digit code, and that code determines the percentage or dollar amount you owe. For example, a wool sweater has a different code and rate than a cotton one, even though they look similar. The rate also depends on the country the item comes from—goods from countries with free trade agreements with the U.S. often have lower or zero duties, while goods from countries under tariffs pay higher rates.

The duty is usually calculated on the item's declared value (what you paid for it, plus shipping and insurance). If you order a $50 jacket from Canada with a 16% duty rate, you owe $8 in duty. If that same jacket comes from a country with a 25% tariff, you owe $12.50. The exact rate depends on the product classification and current trade policy, which can change. Tariffs imposed on specific countries—like those on Chinese goods—can add 10% to 25% or more to the cost of affected items.

When you pay duty on personal purchases

If you buy something online from an international seller, the duty is usually collected at delivery. When your package arrives at a U.S. port, CBP inspects it and assigns a duty amount. The shipping carrier (UPS, FedEx, DHL) or the marketplace (Amazon, eBay) then notifies you of the amount owed. You pay it to the carrier or through the marketplace before the package is released to you. This process typically adds 5 to 10 business days to delivery time, though it can be longer if CBP needs to inspect the item more closely.

Some sellers and marketplaces now offer "duties paid" shipping, meaning they collect the duty upfront and include it in the price you see at checkout. This removes the surprise charge at delivery but usually costs more overall because the seller adds a markup. If you refuse to pay the duty, the package is returned to the sender at your expense, and you lose the item and the original purchase price.

How businesses handle import duty payments

Companies that import goods regularly work with a customs broker, a licensed professional who handles all the paperwork and duty calculations. The broker files the entry documents with CBP, classifies the products using the HTS, and calculates the exact duty owed. The company pays the broker, who then pays CBP on their behalf. This process is called "entry" and must happen before the goods leave the port or warehouse.

Businesses can also use a bonded warehouse, which allows them to store imported goods without paying duty immediately. They pay duty only when the goods leave the warehouse and enter the U.S. market for sale. This is useful for companies that import large quantities and want to manage cash flow. Some businesses also use a Foreign Trade Zone (FTZ), a special area where goods can be stored, processed, or assembled without paying duty until they're sold domestically.

What happens if duty is not paid

If you don't pay the duty on a personal purchase, CBP holds the package and eventually returns it to the sender. You lose the item and the money you spent. If you're a business and don't pay duty on imported goods, CBP can seize the shipment, and you may face penalties or legal action. The government can also place a hold on future shipments from that importer until the debt is settled.

If duty is owed but not paid within a set timeframe (usually 15 days for personal shipments), interest accrues on the amount. For business imports, unpaid duties can result in fines of 20% to 40% of the duty owed, plus the original duty amount and interest. The debt can also affect your credit if it's referred to a collection agency.

Disputing a duty charge

If you believe CBP classified your item incorrectly or charged the wrong duty rate, you can file a protest. You must pay the duty first to take possession of the goods, then submit a written protest to CBP within one year of the date the duty was assessed. The protest should explain why you think the classification or rate is wrong and include evidence, such as product specifications, invoices, or expert opinions on the item's composition.

CBP reviews the protest and either upholds the original decision or adjusts the duty. If you disagree with their decision, you can appeal to the U.S. Court of International Trade. This process can take several months to over a year, and you won't recover the duty you paid unless CBP or the court rules in your favor. For business imports, a customs broker can help file the protest and gather the necessary documentation.

Duty rates and trade policy changes

Duty rates are not fixed—they change based on trade agreements, tariffs imposed by the government, and changes to the Harmonized Tariff Schedule. When the U.S. imposes tariffs on a specific country (as happened with Chinese goods starting in 2018), rates on affected products can jump significantly. Conversely, when a free trade agreement goes into effect, rates on goods from that country may drop to zero.

These changes can happen suddenly and affect the cost of items you're ordering. If you're importing goods regularly, it's worth checking the CBP website or working with a customs broker to understand current rates for your products. Rates also vary by season—some agricultural products have different duties depending on the time of year. The CBP Tariff Schedule is updated regularly, and you can search it by product code or description to find the current rate for any item.

Frequently Asked Questions

Do I have to pay import duty on everything I order from outside the U.S.?

No. Some items have zero duty rates, and very small shipments (under $800 in value) may be exempt from duty under the de minimis rule, though this is changing. Most personal purchases over $800 and all business imports are subject to duty based on the item's classification and country of origin.

Can I avoid paying import duty by having the seller mark the package as a gift?

Gifts under $100 in value are exempt from duty, but CBP inspects packages and can determine if a declaration is false. Deliberately misrepresenting the contents or value of a shipment is customs fraud and can result in penalties, seizure of goods, and legal consequences.

What's the difference between import duty and sales tax?

Import duty is a federal tax on goods entering the country, paid to CBP before the item reaches you. Sales tax is a state or local tax paid when you purchase an item domestically. You may owe both—duty on the import, plus sales tax when the item is delivered to you, depending on your state's rules.

How long does it take to pay duty and receive my package?

Once CBP assesses the duty, you typically have 5 to 10 business days to pay before the package is released. Payment to the carrier or marketplace is usually processed within 24 hours. Total delivery time can be 1 to 3 weeks longer than domestic shipping because of customs inspection and processing.

What if the seller says they'll pay the duty for me?

Some sellers offer to cover duty costs, but this is rare and usually only for high-value items or repeat customers. If a seller agrees to pay, confirm this in writing before you order. If duty is charged at delivery and the seller doesn't reimburse you, you'll need to contact them to dispute the charge.