New importers have probably come across the term “harmonized tariff schedule” or HTS code and they’re wondering, “what is HTS?” The short explanation is that an HTS code is a unique eight-to-10-digit number that identifies what products you’re shipping without the US customs agency having to open your packages to find out. Now that you know what an HTS code is, your next question is, “is it required?” Here’s your answer.
Over 200 countries use the Harmonized System (HS) to help customs officials identify products coming across their borders.
The HS is a six-digit number that classifies products into increasingly narrow categories. The first two digits are called a chapter and are a general category, such as 50, representing silk products. The next two digits are called a heading and narrow the product down a bit more, such as 07, which represents woven fabrics of silk. So, the first four digits of the HS would be 5007.
The next two digits are the subheading, which narrows the product down even further. For example, if digits five and six are 10, they would represent fabrics of noil silk. As such, the full HS number would be 500710. The United States uses a 10-digit HTS number, which includes a rate line for numbers seven and eight. If those numbers were 30, for instance, they would represent fabrics of noil silk that contain “85 percent or more by weight of silk or silk waste.”
The final two numbers for the HTS are sometimes used and sometimes not used. If your product can’t be narrowed down any further, the last two digits should be 00. If it can be narrowed down further, it will have two additional digits such as 20 for “Not jacquard woven: More than 127 cm in width.” Therefore, the full 10-digit HTS number for your product would be 5007103020.
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While an HTS number is not required on shipments, it is a best practice to include it on your shipping label. It will make your life a lot easier when your products go through customs because the agents will be able to see precisely what you are shipping without the need to open the package.
Your items have to be taxed correctly and the HTS number ensures that is done each and every time you have products shipped to the U.S.
As the importer, you are responsible for paying the correct amount of tax, so it’s important that you use an HTS number and make sure that it is as correct as possible.
This means that you use a full 10-digit code for your items if one is available. Avoid putting in zeros when there are numbers that fully describe the products you’re importing. Otherwise, you could end up getting fined for not using the proper code, whether done intentionally or not.
Even though the HTS code is not required for imports into the United States, it is recommended that you use one anyway. It just makes the process easier, ensures you’re paying the correct amount of tax, and helps prevent product loss.