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[U.S. Internal Tax and Incidental Expense]
■ Outline
Internal tax and incidental expense that are mandatorily imposed from a foreign country to U.S. are generally the followings: ① Federal Excise Tax, ② Merchandised Processing Fee(MPF), and ③ Harbor Maintenance Fee(HMF) if the delivery is via the shipment.
The federal excise tax includes the alcohol tax, tobacco tax, firearms and ammunition tax and fuel tax. However, the TSC system does not guide upon the state excise tax and incidental expense from the state government, and the local excise tax and incidental expent from the local government.
Hereafter described are mainly upon the target product of federal excise tax, incidental expense, and tax calculation and exempted target.
■ Federal Excise Tax
☉ Alcohol Tax
ㅇ Target
The most important role to import alcohols into U.S. is the Federal Alcohol Administration Act(AAA)이며, and its executive agency is the Alcohol and Tobacco Tax and Trade Bureau(TTB) under the US Department of Treasury.
Alcohols subject to the AAA are the followings: ① those who have more than 7% of alcohol ingredient within and ② distilled spirits (Vodka, Whiskey and etc.), wines and malt brewed liquors(Beers and etc.).
Thereby those liquors less than 7% of alcohol ingredients within are not considered as alcohols and/or are not regulated under the AAA, but also are considered as a kind of food, being regulated under the related regulations by the Food and Drug Administration(FDA)
ㅇ Calculation
Alcohol tax is regulated as the type of specific duty by the types of alcohols, and is calculated by multiplying the import quantity by tax amount per unit. (For example : $18 per each beer barrel)
Alcohol tax = import quantity X tax amount per unit
The TCS system doesn't adopt tax rates per package for the alcohol tax calculation, and please refer to the detailed alcohol tax rate information link written below.
- Alcohol tax rate information
https://www.ttb.gov/tax_audit/taxrates.shtml
ㅇ Exemption
- Beer used as a distilling ingredient
- Beer used by the international organizations and/or diplomatic representatives, and spent within U.S.
- Beer carried out of a brewery to dispose
- Alcohols to export
- Used for the purpose of scientific and/or medical experiments by an educational institution, hospital, laboratory and etc.
☉ Tobacco Tax
ㅇ Target
The most important role to import tobacco into U.S. is the Tobacco Control Act(TCA), and its executive agencies are the Food and Drug Administration(FDA) and the Alcohol and Tobacco Tax and Trade Bureau(TTB) under the US Department of Treasury.
Articles subject to Tobacco tax under the TCA are the followings:
1) Tobacco product
- Ccigars
- Cigarettes
- Smokeless tobacco : snuff or chewing tobacco
- Pipe tobacco
- Roll-your-own tobacco
2) Articles not tobacco, but subject to tobacco tax
- Cigarette tube
- Cigarette papers
ㅇ Calculation
Tobacco tax is regulated as the type of specific duty by the types of tobacco, and is calculated by multiplying the import quantity by tax amount per unit.
[For Example : (Small Cigarettes) $50.33 per 1000 units
Tobacco tax = Import quantity X tax amount per unit
The TCS system does not adopt tax rates per package for the tobacco tax calculation, and please refer to the detailed tobacco tax rate information written below.
- Tobacco tax rate information
https://www.ttb.gov/tax_audit/taxrates.shtml#Tobacco
ㅇ Exemption
- Tobacco provided to an employee of the manufacturer
- Tobacco used for experiment
- Tobacco exported to aborad, but re-imported into U.S.
- Tobacco to export
☉ Firearms and Ammunition Tax
ㅇ Target
- Pistols and Revolvers
- Other Firearms and Ammunition
ㅇ Calculation
Firearms and ammunition tax is calculated by multiplying the sale price of imported firearms and ammunition by the tax rate.
- Firearms and ammunition tax = Sale price X Tax rate
- Firearms and ammunition tax rate information
https://www.ttb.gov/tax_audit/taxrates.shtml#Firearms
ㅇ Exemption
- Those who manufacture and/or import articles less than 50 for a calendar year
- Firearms for sport subject to regulated specifications
- Antique firearms classified as antique for reasons of the manuracturing date, design, value and others of such.
☉ Fuel Tax
ㅇ Target
- Gasoline
- Diesel
- Kerosene
- CNG
- Aviation fuel
ㅇ Calculation
Fuel tax is calculated as the type of specific duty by the types of fuel by multiplying import quantity by tax amount per unit.
[For example : (Gasoline) $0.184 per each gallon
Fuel tax = Import quantity X Tax amount per unit
- Fuel tax information
http://www.irs.gov/publications/p510/ch01.html#d0e825
ㅇ Exemption
- Fuel used for additional production and/or sales
- Fuel to import
- Supply to vessel and/or aeroplane
- Government product
- Non-profit educational institution product
- For diplomats
■ Incidental expense
☉ Merchandise Processing Fee(MPF)
ㅇ Target
- Articles not subject to the reduction product under the U.S. tariff schedule chapter 98
- Articles not belong to U.S. possessions.
- Articles not adopted to the special tax(Special - Column 1)
ㅇ Calculation
MPF is calculated by multiplying the tax standard of imported product by MPF rate, and the tax standard means the price for the import declaration.
- MPF = Import declared price X MPF rate
In addition, MPF is estimated from a minimum fee of $25 ~ a maximum fee of $485 dollars for formal entries.
ㅇ Exemption
- Articles subject to the reduction product under the U.S. tariff schedule chapter 98
- Articles belong to U.S. possessions
- Articles adopted to the special tax(Special - Column 1)
☉ Harbor Maintenance Fee(HMF)
ㅇ Target
- Every article that is imported, via ocean freight, into a port within U.S.
ㅇ Calculation
HMF is calculated by multiplying the tax standard of imported product by HMF rate, and the tax standard means the price of the import declaration.
- HMF = Import declared price X HMF rate
In addition, HMF has no minimum or maximum standard to impose, unlikely MPF.
ㅇ Exemption
- Aviation and/or mail freight
- Articles imported, via ocean freight, into a port that doesn't impose HMF within U.S.
■ Others
Most countries impose VAT to each import, unlikely U.S. doesn't do so.
