Duties, Taxes, Fees, and Duty Drawback
This domain tests how the duty obligation is computed, deposited, and later recovered. Know the rate structures, the user fees, and the strict eligibility rules for drawback.
Rate structures and fees
- Ad valorem (percentage of value), specific (per unit or weight), and compound (both).
- Merchandise Processing Fee: 0.3464% ad valorem, with a floor and ceiling adjusted each fiscal year (FY2025: $32.71–$634.62). Always verify the current Federal Register notice.
- Harbor Maintenance Fee: 0.125% on commercial ocean cargo.
- Chapter 99 provisions (Section 301, safeguards, AD/CVD) layer additional duties on top of the Chapter 1–97 rate.
- Estimated duties are deposited with the summary; liquidation fixes the final amount.
Drawback (19 U.S.C. §1313)
- Refund rate is 99% of duties, taxes, and fees paid.
- Claims are filed within 5 years of importation or exportation, depending on the type.
- Unused merchandise - direct identification or substitution, with substituted goods classified in the same 8-digit HTSUS subheading.
- Manufactured - exported article produced with imported materials; same-kind substitution available.
- Records must prove the import-export link; CBP audits these closely.
Worked example
An importer pays $5.00 per unit on 10,000 units and exports 8,000 units unused within five years, supported by matching 8-digit substituted goods. Refund = 8,000 × $5.00 × 0.99 = $39,600. The 2,000 units retained domestically generate nothing.
Traps that cost marks
- Using the old three-year deadline.
- Substituting merchandise that matches only at the 6-digit level.
- Omitting MPF from the refund calculation while assuming HMF is refundable.
- Claiming drawback without a document trail tying export to import.