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April 18, 2014 — A weekly look at Wyoming business questions from the Wyoming Small Business Development Center (WSBDC), part of WyomingEntrepreneur.Biz, a collection of business assistance programs at the University of Wyoming.
By John C. Privette, WSBDC regional director
“Do I pay an import tariff on the women’s wool sweaters I source from Costa Rica?” Terri, Torrington
You need to determine if U.S. Customs will levy a tariff/duty (a tax levied by governments on the value including freight and insurance of imported products) on the imported textile product. How do you find this information?
The first step is to determine the Harmonized Tariff Schedule (HTS) for the product -- a 4-6 digit code. The HTS code is an international classification system administered by the World Customs Organization. It is used by customs officials worldwide to levy tariffs and duties on imported products and for statistical reporting.
In the U.S., the import classification system is called the "Harmonized Tariff Schedule of the United States Annotated (HTSA)," and the U.S. export system is called the "Schedule B.” The U.S. Census Bureau maintains statistics for U.S. imports and exports.
The U.S. Census Bureau Schedule B Search can be found at http://www.census.gov/foreign-trade/schedules/b/index.html. It allows you to search for the product using keywords (sweater, wool) and obtain the HTS four-digit code and the first six digits of the Schedule B number. In this case, the product code is 6110.11.
Once the HTS code is determined, the FTA Tariff Tool on the http://www.export.gov website informs you if a free trade agreement exists between the U.S. and Costa Rica to provide preferential tariff treatment for the women’s wool sweaters you plan to import into the U.S. You are in luck: The U.S. Customs allows you to import the women’s wool sweaters tariff/duty free into the U.S., at least through 2015.
Now, you just need to work with the exporter to finalize pricing, documentation and shipping logistics to determine the landed costs for the women’s wool sweaters to your place of business. The landed costs serve to establish your retail price.
A blog version of this article and an opportunity to post comments is available at http://wyen.biz/blog1/.
The WSBDC is a partnership of the U.S. Small Business Administration, the Wyoming Business Council and the University of Wyoming. To ask a question, call 1-800-348-5194, email firstname.lastname@example.org or write 1000 E. University Ave., Dept. 3922, Laramie, WY, 82071-3922.