Low-Value Shipments and Congressional Duty

There are thousands of ways for government to better accommodate business’ and consumers’ interests.  One of them is in adjusting customs duties on low-value shipments from abroad.

When we return from travel to the U.S., we are allowed to import up to $800 in goods without paying customs duty.  Those purchases are scrutinized by US Customs and Border Protection (CBP) to discover items considered dangerous, or to which special limits apply such as for alcohol and tobacco.

In contrast, when we buy from an international source and have those goods shipped, customs duty applies to any value above $200 (called the “de minimis” value threshold).

Shippers and vendors are required to fill in lengthy forms and CBP must inspect them.  Of course the goods are scrutinized for dangerous content.  The paperwork and duty paid may feel like a mere nuisance to an individual consumer, but when repeated millions of times a year, they are a costly process for the small businesses involved and they add to shipping delay.

Fortunately, some in Congress see a way to clear this double standard of where customs duty applies.  A bill called “Low-value Shipment Regulatory Modernization Act of 2013,” would raise the de minimis value threshold from $200 to $800.  The tax revenue foregone by this bill is small (CBO estimated it at $37 million in 2011) and that revenue is offset by savings from reduced paperwork effort by CBP staffers, by the private sector importer (usually a small business for transactions this small), by the vendor and by the shipping firms such as DHL, FedEx, TNT, UPS, and the US Postal Service.

The private sector savings have been estimated at between one-half to one full paid-day per transaction.  Raising the international threshold would lower these transaction costs for taxpayers, consumers and shippers, and induce a small increase in economic vigor – something our economy needs.  In addition, it would also lower the consumer transaction fees for online purchases through eBay, Amazon and others, and that means lower costs for American consumers.

If it were not a tax issue, this accommodation would have been embraced earlier.  The CBP could have addressed the issue itself because current law authorizes it to set the de minimis level at $200 or higher.

Congress has a duty to act on a small issue that’s good for consumers.  That action ought to receive bipartisan approval.

Alan Daley is a retired businessman who lives in Florida and who writes for The American Consumer Institute Center for Citizen Research

 

FacebooktwitterredditlinkedinFacebooktwitterredditlinkedin