De Minimis: Duty-Free Imports Valued at $800 or Less
In 2022, over 685 million shipments entered the U.S. under a relatively unknown customs provision called De Minimis.
What is De Minimis?
A U.S. Customs provision that allows eligible merchandise to enter free of duty and tax provided that the merchandise is imported by “one person on one day” and has an aggregate fair market value of $800 or less.
: LACKING SIGNIFICANCE OR IMPORTANCE: SO MINOR AS TO MERIT DISREGARD
Source: Merriam-Webster Dictionary
Over the past seven years, the usage of De Minimis has increased by 410%, in line with the rise of e-commerce.
Today, two types of clearances can be used for De Minimis shipments. One is a straightforward clearance handled by U.S. Customs based on manifest data. The second is Entry Type 86, handled by a customs broker.
What is Entry Type 86
Entry Type 86 is a relatively new type of customs entry. It requires fewer data elements than a typical '01' or '11' Entry Type. Also, it offers importers a way to legally enter low-value goods duty and tax-free.
This entry type provides the added benefit of allowing declaration to other government agencies like the Food and Drug Administration (FDA) or Environmental Protection Agency (EPA).
Effective February 15, 2024, Entry Type 86 has a new filing deadline. Importers must declare their shipment "prior to or upon arrival" or be required to use a standard entry type (example: '01', '11'). Previously, Importers had 15 days from the arrival of the cargo to file. Those using this clearance method should provide required customs-related data to their customs broker earlier to ensure usage.
Products Ineligible for Entry Type 86
- Merchandise valued over $800
- Merchandise subject to antidumping or countervailing duties
- Merchandise subject to absolute or tariff-rate quota, whether the quota is open or closed
- Merchandise subject to any tax imposed under the Internal Revenue Code that other agencies collect on imported goods.
- Alcoholic beverages and cigars (including cheroots and cigarillos) and cigarettes containing tobacco, cigarette tubes, cigarette papers, smoking tobacco (including water pipe tobacco, pipe tobacco, and roll-your-own tobacco), snuff, or chewing tobacco are not allowed.
- Shipments that are one of several lots covered by a single order or contract that are sent separately to secure free entry
When you clear U.S. Customs using Entry Type 86, there will be no duty or tax payment, 7501 Entry Summary detailing the entry, or liquidation period. Essentially, the entry is closed once U.S. Customs releases your goods.
Using De Minimis is a way to avoid paying high duties such as Section 301 China, 201 Solar, and 232 Steel and Aluminum tariffs on shipments valued at $800 or less once a day.
Let’s do the math!
USD 800 Value of Goods x 25% Section 301 Tariffs = USD 200 or more in potential savings
That’s a benefit!
Businesses can utilize De Minimis as part of their customs clearance strategy. De Minimis can reduce duty outlay when used correctly, making your merchandise more competitive or adding to your bottom line.
Entry Type 86 offers the added benefit of permitting other government agency declarations, something manifest clearances can not handle.
Contact us today! We can help you create a customs clearance strategy!
Business Development Manager - Customs & Trade Compliance
NNR GLOBAL LOGISTICS USA - Chicago