Understanding HTS Codes for Importing Products into the US

Introduction

Importing products into the US as an ecommerce business can be challenging, but understanding HTS codes is crucial to navigate customs procedures. HTS codes, or Harmonized Traffic Schedule codes, classify imported goods and determine applicable duties or traffic taxes. In this article, we cover the significance of HTS codes, their structure, the consequences of improper usage, and how to ensure compliance.

Understanding HTS Codes

• HTS codes are unique 10-digit numbers used to classify imported goods and determine duty or tax rates.
• They are maintained by the United States International Trade Commission (USITC) and enforced by the Department of Homeland Security's Customs and Border Protection (CBP).
• Proper usage of HTS codes is essential to comply with customs regulations and avoid penalties or seizures.

Key Terminology Related to HTS Codes

• The Harmonized System (HS) is a universal language for coding and identifying internationally traded goods.
• HS codes are six-digit codes that classify imported items, while HTS codes extend to 10 digits, providing more specific information about the US subheading and statistical suffix.
• The World Customs Organization (WCO) maintains the HS system, and the US Customs and Border Protection (CBP) oversees customs regulations in the United States.
• The US Census Bureau maintains the Schedule B codes, which are 10-digit international codes used to categorize goods exported from the US.

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A Brief History of HTS

The HTS was introduced on January 1, 1989, and is based on the HS system.Understanding the history of HTS codes helps establish their relevance in the current customs landscape.

How HTS Codes Work

HTS codes classify imported goods based on characteristics such as product name, function, and composition.The HTS is organized into sections and chapters that cover a wide range of items.Each HTS code consists of 10 digits, with the first six digits representing the international HS number.The remaining four digits provide more specific information about the chapter, heading, subheading, and statistical suffix.

The Structure of HTS Codes

HTS codes are divided into five sections: chapter, heading, subheading, subheading (tariff rate lines), and statistical suffix.Each section represents a different level of classification, allowing for precise identification of goods.

Locating HTS Codes

HTS codes can be found in the specific HTS PDFs of each chapter, available for download on the USITC government website.

Alternatively, you can search the HTS database online.

It's important to verify the accuracy of the codes provided by suppliers and freight forwarders and cross-check the information with official sources.

Consequences of Improper HTS Code Use

Improper usage of HTS codes can lead to penalties, delays, heightened inspections, and even seizures by customs authorities.It's crucial to ensure the accuracy of the codes provided by your suppliers and to use the correct code instead of choosing the most beneficial one.Familiarizing yourself with the trade agreements and programs in place can also help you navigate the tariff rates for specific goods.

Ensuring Compliance with HTS Codes

To stay compliant with HTS codes, verify the accuracy of the codes provided by your suppliers and freight forwarders.Use the correct code rather than the one with the lowest tariff rate, and consult the General Note section of the HTS for trade agreement details.Compliance with HTS codes is necessary to avoid potential issues with customs authorities.

Adding HS Codes to Shopify Products

Shopify doesn't support 10-digit HTS codes but allows you to add the first six digits of an HTS code as an HS code.This enables merchants to input the appropriate codes for their products and comply with customs requirements.

Conclusion

Understanding HTS codes and their significance in the import process is crucial for ecommerce businesses operating in the US. Proper usage of HTS codes ensures compliance with customs regulations and helps avoid penalties, delays, and seizures. By accurately classifying your products and staying informed about trade agreements and programs, you can navigate the customs process with ease and make informed decisions about your international sourcing. Mastering HTS codes can contribute to the success of your ecommerce business in the competitive online market.

FAQs

Do I need to comply with the HTS?

Yes, to remain compliant with the law when importing goods into the US, you must comply with HTS codes. The USITC website provides detailed information about the classification system and guidelines for compliance.

Does Shopify allow merchants to use HTS codes?

While Shopify doesn't accept 10-digit HTS codes, it allows merchants to enter the first six digits of an HTS code as an HS code. This enables compliance with customs requirements.

Where can I find the HTS number for my goods?

There are multiple ways to find the HTS number for your goods, such as using the official HTS search tool available on the USITC website, searching within a specific chapter of the current HTS online, and cross-checking information using reliable sources like the official HTS and Google searches.

What's the difference between HS and HTS codes?

HS codes are used globally to identify traded goods, while HTS codes specifically determine the tariffs and duties applicable to imports in the United States.

How can HTS codes benefit my ecommerce business?

Mastering HTS codes can help you make informed decisions about importing goods, ensure compliance with customs regulations, and avoid potential penalties and delays. By sourcing products in a cost-effective manner and staying compliant, you can maximize the success of your ecommerce business.

By Biggs