A cross-border guide to the United States ecommerce, shipping, and importing goods

If you are looking to grow your ecommerce business into the United States (U.S.) , you have come to the right place. In our guide, created by Zonos' cross-border experts, you will find the following:

• Market and trade stats for the U.S.
• Landed cost information for the U.S.
• The U.S. Customs authority and refunds
• Shipping options and how to stay compliant in the U.S.
• Tips for exporting from the U.S.

Zonos grade for the United States' ease of importing goods: A 

Ease of doing business 5/5

• The U.S. is considered cross-border friendly due to its 14 trade agreements.
• The U.S. is the second-largest ecommerce market in the world.

Landed cost fairness 5/5

• The U.S. does not employ import taxes, and the average duty rate is low, which are both favorable factors for landed cost.
• The U.S. has a high de minimis value threshold, which is also favorable for landed cost.

Flexibility of legal regulations 4/5

• Customs and Border Protection (CBP) does not require sellers/importers to register for an import permit or license.
• Other government offices (FDA, FCC, etc.) may demand a license, permit, or other certification, based on the imported product(s).

Availability and accessibility of shipping 5/5

• There are many shipping services and carrier options due to the U.S.' large population (accounts for 4.25% of the worlds population (2020)), many of which are cross-border online shoppers.

Accessibility and variety of payment methods 5/5

• Available payment methods include VISA, Mastercard, American Express, ewallets, Discover, Apple Pay, PayPal, and Affirm.

Market opportunity 4/5

• The U.S. population and high percentage of internet users provide a potentially successful economy for retailers.

Key stats for the United States 

Landed cost for the U.S. 

Landed cost is the total price of getting a purchase to the customer's door, which includes:

• Product price
• Shipping
• Duties
• Taxes
• Fees (currency conversion, carrier, broker, customs, or government fees)

The U.S. de minimis, tax, and duty

Further explanation of duty, tax, and de minimis is provided below

Duty and tax de minimis

• Duty and tax de minimis: 800 USD

Based on the FOB value of the import

De minimis value

Duty and tax will be charged only on imports into the U.S. where the total FOB value of the import exceeds the U.S. de minimum value threshold (de minimis), which is 800 USD. Anything under the tax de minimis value will be considered a tax-free import, and anything under the duty de minimis value will be considered a duty-free import.

Import tax

• Sales tax replaces import tax

Most U.S. states do have a sales tax, but rates vary by state.

Sales tax

In lieu of import tax, the U.S. has state-specific sales tax laws that apply to business-to-consumer shipments. Importers must be aware of these laws so they know when they need to pay taxes and if they need to self-report. Domestic tax service companies like TaxJar can help you learn more about these laws and the best way to self-report these taxes.

Most international, small-to-medium-sized businesses (SMB) will be exempt from paying sales tax on imported goods because they don’t have “nexus”, but these laws vary widely so it is important to do your due diligence to avoid issues with CBP.

What are the criteria for sales tax nexus?

Sales tax nexus exists when the online retailer has a connection with a state, or when the destination state has a stipulation that requires the seller to collect and remit sales tax directly to that state. All nexus laws vary by state. In general, nexus exists in the followng instances:

1. If you have a retail or storage location, an employee who resides or regularly travels there to conduct business.

2. When your sales into that state reach a state-specific threshold for self-disclosure and reporting of those sales.

   1. More information, on how U.S. sales tax affects international sellers.

If this applies to you, then you may be required to collect, report, and remit sales tax to your state.

What are the sales tax rates?

• Each state, county, city, or town can have a unique tax rate.
• In addition, sales tax is “destination-based.” This means that if you have sales tax nexus in a destination state, you must calculate the sales tax rate based on where your recipient is located.

What if my shopper says they are exempt?

If a U.S. retailer asks to be exempt from tax for wholesale reasons or because they are a tax-exempt charity, they will provide you with a government-issued tax-exempt number. You will need to save that number in your accounting records to avoid having to pay the tax, late fees, and penalties in the event of an audit.

Import duty

• Average duty rate: 5.63%

U.S. duty rates can be Ad Valorem (as a percentage of value) or specific (dollars/cents per unit)

Import duty

The value for duty on goods imported into the U.S. is based on the total purchase value of the article(s) paid and is not established on elements such as quality, size, or weight. The Harmonized Tariff System (HTS) determines duty rates for essentially every existing item. CBP uses the Harmonized Tariff Schedule of the United States Annotated (HTSUS), which is a reference manual that then provides the appropriate tariff rates for all goods imported into the U.S.

The U.S. duty charges (only applied if over the de minimis value) have a fairly wide range, so to get an accurate estimate of what the total landed cost will be, including duties, shipping, and carrier fees, use the Zonos Quoter.

Merchandise processing fee

U.S. imports over the 800 USD de minimis value may be subject to a merchandise processing fee (MPF).

• The MPF is applied to shipments that go through formal entry equal to or over a 2,500 USD value.
• Shipments with an informal entry are valued under $2500 and will receive an MPF of 2.22 USD.
• Shipments between 800 USD- 2500 USD will receive a nominal processing fee in the range of 2.22 USD-15 USD.
• The minimum MPF is 27.75 USD for formal entry imports
• The maximum MPF that can be added to a shipment is 528.33 USD.

Landed cost examples

Below are sample landed cost breakdowns for the U.S. calculated using Zonos Quoter. Since the tax de minimis is 0 USD, tax will always apply:

Landed cost for a shipment to the U.S. below the de minimis value:

Landed cost for a shipment to the U.S. above the de minimis value:

Trade agreements

The U.S. has at least 14 trade agreements that offer a zero or highly discounted duty rate for goods made in a participating country. The most prominent of these trade agreements is the USMCA.

The United States-Mexico-Canada Agreement USMCA

The USMCA agreement provides special duty rate treatment on shipments between the U.S., Mexico, and Canada. On July 1, 2020, USMCA replaced NAFTA (North American Free Trade Agreement), which was one of the oldest and most well-known trade agreements.

The USMCA allows for minimal formal entry procedures and saves consumers money, encouraging global trade as a result. USMCA offers substantial savings for merchants importing goods made in the U.S., Canada, or Mexico, that meet the rules of origin requirements.

Each country that is part of USMCA calls the agreement by their own name:

• In the United States: United States-Mexico-Canada Agreement (USMCA)
• In Mexico: Tratado entre México, Estados Unidos y Canadá (T-MEC)
• In Canada: Canada-United States-Mexico Agreement (CUSMA)

What this legislation means for the U.S.:

Courier shipments

• The de minimis value remains 800 USD.
• Any shipments under the de minimis value are exempt from duty fees.

The U.S. is a member of the World Trade Organization

The U.S. is a member of the World Trade Organization (WTO). Therefore, the U.S. must abide by the most-favored-nation (MFN) clause, which requires a country to provide any concessions, privileges, or immunities granted to one nation in a trade agreement to all other WTO member countries. For example, if a country reduces duties by 10% for one country, the MFN clause states that all WTO members will have their duties cut by 10% into that country.

Customs resources 

The U.S. Customs authority

U.S. Customs and Border Protection

Customs refund in the U.S.

Customs refund in the U.S.

Shipping and compliance 

Top courier services

• DHL Express
• FedEx
• UPS
• USPS
• OnTrac

Depending on the courier, additional shipping fees may include:

• Tracking
• Insurance
• Fuel surcharge
• Remote delivery charge
• Signature fee
• Overweight or oversized fee
• Special handling fee
• Dangerous goods fee
• etc.

Documentation and paperwork

• Bill of lading or air waybill
• Commercial invoice

Visit Common Export Documents to get detailed information concerning documentation and paperwork needed for U.S. export and imports

Restricted, prohibited, and controlled items

Government agencies regulate imports.

Prohibited items:

• Drugs and medicine prohibited by the FDA
• Distilled spirit absinthe
• Merchandise from embargoed countries
• Items made with dog and cat fur
• Counterfeit trademark and copyrighted articles

Restricted items:

• Health and beauty: nutritional and dietary supplements, medicine and drugs, cosmetics, dental instruments, veterinary products, medical items, and pharmaceuticals
• Contact lenses and eyewear
• Consumer electronics: CD-ROMs, CD players, computers with CD/DVD drives, microwave ovens, televisions with cathode ray tubes, and infrared products
• Chemicals
• Tobacco products
• Wood and wood products
• Animal products
• Firearms
• Certain food items
• Home and living: tableware
• Automobiles
• And more

Legal regulations for businesses

To lawfully enter the U.S., imported products must arrive inside the port of entry, delivery of the product must be approved by CBP, and assessed duties must be paid. The importer is liable for the analysis and delivery of the goods.

Tips for exporting from the U.S. 

The International Trade Administration provides tools, assistance, and information on the requirements of exporting from the U.S. Depending on the goods or services, exporters may need a license or permit to export from the U.S. as a part of their business.

Next steps

• Decoding China- Learn how you can expand your business into the largest ecommerce market in the world.
• Decoding India- Learn all you need to know to expand your online business into India to reach 1.3 billion potential new customers.
• Decoding Australia- Australia’s growing ecommerce sales and high internet penetration makes it a great country for expanding your online business.
• Decoding Bermuda- Bermuda welcomes and recognizes the importance of e-business. Find out how you can expand your online business into the expanding economy of Bermuda.
• Decoding the UK- Find out all you need to know to expand your online business into the third-largest ecommerce market in the world.

References

• Do International Sellers Have to Deal with Sales Tax in the US? - TaxJar
• International Trade Administration
• U.S. Customs and Border Protegction
• What is Sales Tax Nexus - Learn all about Nexus