A clear breakdown of the terminology around import charges, how each is calculated, and which ones apply to your shipments.
In international trade, three terms create the most confusion: tariff, duty, and tax. A tariff is the government-published rate schedule that determines charges on imported goods. A duty is the specific payment calculated by applying the tariff rate to a shipment. Import tax is a general term encompassing all government-imposed charges on cross-border goods, including duties, fees, and levies.
Customs duties are calculated by multiplying the applicable tariff rate by the customs value (typically the transaction value of the goods). Additional fees like MPF and HMF are calculated as percentages of the customs value with minimum and maximum thresholds. Section 301 surcharges are layered on top of the base duty. Sales tax is calculated separately on the retail price at the point of consumer sale.
Understanding which charges are duties vs. fees vs. taxes determines your compliance obligations, refund eligibility, and cost optimization strategies. Duties may be eligible for drawback refunds on exports. Tariff rates can be reduced through classification engineering. Fees like MPF are non-negotiable but have caps. Knowing the difference helps you target the right cost-reduction lever.
The terms are closely related and often used interchangeably, but they have subtle differences. A tariff is the published schedule of rates set by the government. A duty is the actual amount of money you pay on a specific import based on the tariff rate. Think of the tariff as the rate card and the duty as the bill.
Customs duty is a charge specifically on goods crossing a national border, calculated based on the product classification and country of origin. Import tax is a broader term that can include customs duties, excise taxes, value-added taxes (VAT), and other levies imposed on imported merchandise.
Yes. Customs duties and sales taxes are separate charges. You pay duties at the time of import based on the HTS classification and customs value. Sales tax is collected separately at the point of sale to the end consumer, based on the state and local tax rate where the customer is located.
Beyond the base tariff duty, imports may incur the Merchandise Processing Fee (MPF) of 0.3464%, the Harbor Maintenance Fee (HMF) of 0.125%, customs brokerage fees, bond costs, and any applicable Section 201, 232, or 301 surcharges. These add 1-3% to the base duty amount.
The importer of record is legally responsible for paying tariffs to CBP. However, the economic burden is typically shared between the importer (through lower margins), the supplier (through lower FOB prices), and the consumer (through higher retail prices). The split depends on competitive dynamics.
MarginHub breaks down every charge on your imports—duties, fees, surcharges, and more—so you know exactly what you are paying and where to optimize.
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