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Paying Duty at Customs and Duty-Free Exemptions

Duty-free Exemption

The duty-free exemption, also called the personal exemption , is the total value of merchandise you may bring back to the United States without having to pay duty. You may bring back more than your exemption, but you will have to pay duty on it. In most cases, the personal exemption is $800, but there are some exceptions to this rule, which are explained below.

Exemptions

Depending on the countries you have visited, your personal exemption will be $600, $800, or $1,200. (The differences are explained in the following section.) There are also limits on the amount of alcoholic beverages, cigarettes, cigars, and other tobacco products you may include in your duty-free personal exemption.

The duty-free exemptions ($600, $800, or $1,200) apply if:

• The items are for your personal or household use.
• They are in your possession (that is, they accompany you) when you return to the United States. Items to be sent later may not be included in your $800 duty-free exemption.
• They are declared to Customs. If you do not declare something that should have been declared, you risk forfeiting it. If in doubt, declare it.
• You are returning from an overseas stay of at least 48 hours. For example, if you leave the United States at 1:30 p.m. on June 1, you would complete the 48-hour period at 1:30 p.m. on June 3. This time limit does not apply if you are returning from Mexico or from the U.S. Virgin Islands. (See the section on the $200 exemption.)
• You have not used your exemption, or any part of it, in the past 30 days. If you use part of your exemption - for example, if you go to England and bring back $150 worth of items - you must wait another 30 days before you are allowed another $800 exemption. (However, see the section on the $200 exemption.)
• The items are not prohibited or restricted as discussed in the section on Prohibited and Restricted Items. Note the embargo prohibitions on products of Cuba.

$200 Exemption
If you can't claim other exemptions because you've been out of the country more than once in a 30-day period or because you haven't been out of the country for at least 48 hours, you may still bring back $200 worth of items free of duty and tax. As with the exemptions discussed earlier, these items must be for your personal or household use.

Each traveler is allowed this $200 exemption, but, unlike the other exemptions, family members may not group their exemptions. Thus, if Mr. and Mrs. Smith spend a night in Canada, each may bring back up to $200 worth of goods, but they would not be allowed a collective family exemption of $400.

Also, if you bring back more than $200 worth of dutiable items, or if any item is subject to duty or tax, the entire amount will be dutiable. Let's say you were out of the country for 36 hours and came back with a $300 piece of pottery. You could not deduct $200 from its value and pay duty on $100. The pottery would be dutiable for the full value of $300.

You may include with the $200 exemption your choice of the following: 50 cigarettes and 10 cigars and 150 milliliters (5 fl. oz.) of alcoholic beverages or 150 milliliters (5 fl. oz.) of perfume containing alcohol.

$800 Exemption

If you are returning from anywhere other than a Caribbean Basin country or a U.S. insular possession (U.S. Virgin Islands, American Samoa, or Guam), you may bring back $800 worth of items duty-free, as long as you bring them with you (this is called accompanied baggage).

Duty on items you mail home to yourself will be waived if the value is $200 or less. (See sections on "Gifts" and "Sending Goods to the United States.") Antiques that are at least 100 years old and fine art may enter duty-free, but folk art and handicrafts are generally dutiable.

This means that, depending on what items you're bringing back from your trip, you could come home with more than $800 worth of gifts or purchases and still not be charged duty. For instance, say you received a $700 bracelet as a gift, and you bought a $40 hat and a $60 color print. Because these items total $800, you would not be charged duty, because you have not exceeded your duty-free exemption. If you had also bought a $500 painting on that trip, you could bring all $1300 worth of merchandise home without having to pay duty, because fine art is duty-free.

Tobacco Products: Passengers/travelers may import previously exported tobacco products only in quantities not exceeding the amounts specified in exemptions for which the traveler qualifies. Any quantities of previously exported tobacco products not permitted by an exemption will be seized and destroyed. These items are typically purchased in duty-free stores, on carriers operating internationally, or in foreign stores. These items are usually marked "Tax Exempt. For Use Outside the U.S.," or "U.S. Tax Exempt For Use Outside the U.S."

For example, a returning resident is eligible for the $800 exemption, which includes not more than 200 cigarettes and 100 cigars. If the resident declares 400 previously exported cigarettes, the resident would be permitted 200 cigarettes, tax-free under the exemption and the remaining 200 previously exported cigarettes would be confiscated. If the resident declares 400 cigarettes, of which 200 are previously exported and 200 not previously exported, the resident would be permitted to import the 200 previously exported cigarettes tax free under the exemption and the resident would be charged duty and tax on the remaining 200 not previously exported cigarettes.

The tobacco exemption is available to each person. Tobacco products of Cuban origin, however, are prohibited unless you actually acquired them in Cuba and are returning directly or indirectly from that country on licensed travel. You may not, for example, bring in Cuban cigars purchased in Canada. Persons returning from Cuba may bring into the U.S. no more than $100 worth of goods.

Alcoholic Beverages: One liter (33.8 fl. oz.) of alcoholic beverages may be included in your exemption if:

• You are 21 years old.
• It is for your own use or as a gift.
• It does not violate the laws of the state in which you arrive.

Federal regulations allow you to bring back more than one liter of alcoholic beverage for personal use, but, as with extra tobacco, you will have to pay duty and Internal Revenue Service tax.

While federal regulations do not specify a limit on the amount of alcohol you may bring back for personal use, unusual quantities are liable to raise suspicions that you are importing the alcohol for other purposes, such as for resale. Customs officers are authorized by Alcohol Tobacco and Firearms (ATF) make on-the-spot determinations that an importation is for commercial purposes, and may require you to obtain a permit to import the alcohol before leasing to you. If you intend to bring back a substantial quantity of alcohol for your personal use you should contact the Customs port you will be re-entering the country through, and make prior arrangements for entering the alcohol into the U.S.

Having said that, you should be aware that State laws may limit the amount of alcohol you can bring in without a license. If you arrive in a state that has limitations on the amount of alcohol you may bring in without a license, that state law will be enforced by Customs, even though it may be more restrictive then Federal regulations. We recommend that you check with the state government before you go abroad about their limitations on quantities allowed for personal importation and additional state taxes that might apply.

In brief, for both alcohol and tobacco, the quantities discussed in this booklet as being eligible for duty-free treatment may be included in your $800 (or $600 or $1,200) exemption, just as any other purchase would be. But unlike other kinds of merchandise, amounts beyond those discussed here as being duty-free are taxed, even if you have not exceeded, or even met, your personal exemption. For example, if your exemption is $800 and you bring back three liters of wine and nothing else, two of those liters will be dutiable. Federal law prohibits shipping alcoholic beverages by mail within the United States.

$600 Exemption

If you are returning directly from any one of the following 24 Caribbean Basin countries, your customs exemption is $600:

• Antigua and Barbuda
• Aruba
• Bahamas
• Barbados
• Belize
• British Virgin Islands
• Costa Rica
• Dominica
• Dominican Republic
• El Salvador
• Grenada
• Guatemala
• Guyana
• Honduras
• JamacaMontserrat
• Netherlands, Antilles
• Nicaragua
• Panama
• Saint Kitts and Nevis
• Saint Lucia
• Saint Vincent and the Grenadines
• Trinidad and Tobago

You may include two liters of alcoholic beverages with this $600 exemption, as long as one of the liters was produced in one of the countries listed above (see section on Unaccompanied Purchases from Insular Possessions and Caribbean Basin Countries).

Travel to More Than One Country

If you travel to a U.S. possession and to one or more of the Caribbean countries listed above (for example, on a Caribbean cruise), you may bring back $1,200 worth of items without paying duty. But only $600 worth of these items may come from the Caribbean country(ies); any amount beyond $600 will be dutiable unless you acquired it in one of the insular possessions.

For example, if you were to travel to the U.S. Virgin Islands and Jamaica, you would be allowed to bring back $1,200 worth of merchandise duty-free, as long as only $600 worth was acquired in Jamaica. (Keeping track of where your purchases occurred and having the receipts ready to show the Customs inspectors will help speed your clearing Customs.)

If you travel to any of the Caribbean countries listed above and to countries where the standard personal exemption of $800 applies - for example, a South American or European country - up to $800 worth of merchandise may come from the non-Caribbean country. For instance, if you travel to Venezuela and Trinidad and Tobago, your exemption is $600, only $200 of which may have been acquired in Venezuela.

$1,200 Exemption

If you return directly or indirectly from a U.S. Insular possession (U.S. Virgin Islands, American Samoa, or Guam), you are allowed a $1,200 duty-free exemption. You may include 1,000 cigarettes as part of this exemption, but at least 800 of them must have been acquired in an insular possession. Only 200 cigarettes may have been acquired elsewhere. For example, if you were touring the South Pacific and you stopped in Tahiti, American Samoa, and other ports of call, you could bring back five cartons of cigarettes, but four of them would have to have been bought in American Samoa.

Similarly, you may include five liters of alcoholic beverages in your duty-free exemption, but one of them must be a product of an insular possession. Four may be products of other countries (see section on Unaccompanied Purchases from Insular Possessions and Caribbean Basin Countries).

Gifts

Gifts you bring back from a trip abroad are considered to be for your personal use. They must be declared, but you may include them in your personal exemption. This includes gifts people gave you while you were out of the country, such as wedding or birthday presents,and gifts you've brought back for others.

Gifts intended for business, promotional, or other commercial purposes may not be included in your duty-free exemption.
Gifts worth up to $100 may be received, free of duty and tax, by friends and relatives in the United States, as long as the same person does not receive more than $100 worth of gifts in a single day. If the gifts are mailed or shipped from an insular possession, this amount is increased to $200. When you return to the United States, you don't have to declare gifts you sent while you were on your trip, since they won't be accompanying you.

By federal law, alcoholic beverages, tobacco products, and perfume containing alcohol and worth more than $5 retail may not be included in the gift exemption.

Gifts for more than one person may be shipped in the same package, called a consolidated gift package, if they are individually wrapped and labeled with each recipient's name. Here's how to wrap and label a consolidated gift package:

Be sure to mark the outermost wrapper with:

• the words "UNSOLICITED GIFT" and the words "CONSOLIDATED GIFT PACKAGE" ;
• the total value of the consolidated package;
• the recipients' names; and
• the nature and value of the gifts inside (for example, tennis shoes, $50; shirt, $45; toy car, $15).

Packages marked in this way will clear Customs much more easily. Here's an example of how to mark a consolidated gift package:

Unsolicited gift-consolidated gift package- total value $135
To John Jones-one belt, $20; one box of candy, $5; one tie, $20
To Mary Smith-one skirt, $45; one belt, $15; one pair slacks, $30.

If any item in the consolidated gift parcel is subject to duty and tax or worth more than the $100 gift allowance, the entire package will be dutiable.

You, as a traveler, cannot send a "gift" package to yourself, and people traveling together cannot send "gifts" to each other. But there would be no reason to do that anyway, because the personal exemption for packages mailed from abroad is $200, which is twice as much as the gift exemption. If a package is subject to duty, the United States Postal Service will collect it from the addressee along with any postage and handling charges. The sender cannot prepay duty; it must be paid by the recipient when the package is received in the United States. (Packages sent by courier services are not eligible for this duty waiver.)

Paying Duty

If you're bringing it back with you, you didn't have it when you left, and its total value is more than your Customs exemption, it is subject to duty.

The Customs inspector will place the items that have the highest rate of duty under your exemption. Then, after subtracting your exemptions and the value of any duty-free items, a flat rate of duty will be charged on the next $1,000 worth of merchandise. Any dollar amount beyond this $1,000 will be dutiable at whatever duty rates apply. The flat rate of duty may only be used for items for your own use or for gifts. As with your exemption, you may use the flat-rate provision only once every 30 days. Special flat rates of duty apply to items made and acquired in Canada or Mexico. The flat rate of duty applies to purchases whether the items accompany you or are shipped.

The flat duty rate will be charged on items that are dutiable but that cannot be included in your personal exemption, even if you have not exceeded the exemption. The best example of this is liquor: Say you return from Europe with $200 worth of items, including two liters of liquor. One liter will be duty-free under your exemption; the other will be dutiable at 4 percent, plus any Internal Revenue Service tax.

Family members who live in the same household and return to the United States together can combine their items to take advantage of a combined flat duty rate, no matter which family member owns a given item. The combined flat duty rate for a family of four traveling together would be $4,000.

If you owe duty, you must pay it when you arrive in the United States. You can pay it in any of the following ways:

U.S. currency (foreign currency is not acceptable).

Personal check in the exact amount, drawn on a U.S. bank, made payable to the U.S. Customs Service. You must present identification, such as a passport or driver's license. (The Customs Service does not accept checks bearing second-party endorsements.)

Government check, money order, or traveler's check if it does not exceed the duty owed by more than $50.

In some locations, you may pay duty with credit cards, either VISA or MasterCard.