Import tax, also known as customs or duty, is the tax paid on a product or products brought from one country into another. This tax may be incurred whether you travel abroad, buy an item, and bring it home with you or whether you order an item from abroad by mail or over the Internet.

In the United States the system of import taxes for travelers is reasonably simple. When returning to the U.S., while still on the airplane or ship, you will be given a customs declaration form to fill out. On this form you tell the customs officer about anything you're bringing back that you did not have when you left the U.S. This includes items you purchased (including those bought in duty free shops or on the airplane or ship), received as a gift or inherited, as well as repairs or alterations to any items you took abroad and are bringing back with you. You are also asked to write in the amount, in U.S. currency, that you paid for each item, including any taxes. Customs officials may make random searches of baggage and if they find any item that should have been declared but wasn't that item may be confiscated.

Fortunately, simply declaring an item does not automatically mean you will have to pay tax on it. Travelers are allowed to import a certain dollar amount of goods without owing taxes. This amount is known as a duty free exemption. The exact amount of the exemption depends on the country you are returning from, but usually an individual can bring $400 worth of goods without owing taxes on those goods. Family members, including babies and children, who are traveling together and live in the same household can use a joint declaration to combine their individual exemptions. In most cases, items you have shipped that will be arriving later may not be included on the declaration form. However, there is an exception for products acquired in the U.S. Virgin Islands, American Samoa, Guam, or in a Caribbean Basin country. These items must be declared on the form when you are entering the U.S. even if they will be arriving later in the mail.

If the total value of your purchases exceeds your duty free exemption amount, you will be required to pay a flat rate duty (usually between 2% and 4%) on the next $1,000 worth of purchases over the exemption. Any amount over that $1000 will be then be dutiable at whatever rates apply for the country from which you are returning. Also, most items have specific duty rates, which are determined by a number of factors, including where the item was made, what it is made of, and where it was purchased. If you do owe duty, you will be required to pay it there at the customs check point. Payment is accepted in cash or by check and some locations also accept credit card payment.

You may also be charged duty when you mail items home from abroad or when you mail order a product that will be delivered from abroad. If your package requires payment of duty, customs officials will attach a form called a mail entry, which shows the amount of duty owed, and will charge a small processing fee, as well. When the post office delivers the package, it will also charge a handling fee. Usually the post office will mail you a card explaining that your package is being held for you and stating the amount of tax owed. The tax can be paid in cash at the post office or in some cases by check or even over the telephone by credit card. Once payment is received the item will be delivered. If the packages is delivered by an independent delivery service such as UPS, the driver will collect any taxes owed.

Although the U.S. customs system is fairly straightforward for travelers who are just bringing home a few souvenirs and gifts for the family, there are some potential problems to be aware of. More than one traveler has been mislead by the term duty free as it applies to items in duty free shops at airports and other points of entry. Buying an item in a duty free shop does not mean that you will not have to pay import tax on the item when you bring it home. Duty free only means that the price of the item in the duty free shop does not include the cost of taxes that would have been added to the item if it had been officially imported into the country where the shop is located. The shop owner did not have to pay the duty taxes, so that cost isn't passed on to the customer. However, when you bring an item you purchased in a duty free shop back to the U.S., you may have to pay import tax on it if you exceed your personal exemption.

Another problem can occur when you take a foreign-made item that you owned before leaving the U.S. out of the country. Unless you have acceptable proof of prior possession, these items may be subject to import tax every time they are brought back into the U.S. A document that fully describes the article, such as a receipt for purchase, bill of sale, insurance policy, or appraisal is usually accepted as proof of prior possession. Items such as cameras or watches, which can be easily identified by a serial number or other unique marking, can be taken to a U.S. Customs and Border Protection (CBP) office and registered before you leave the country. You will receive a Certificate of Registration, which is valid for as long as you own the article and will allow free entry of the item when you return. Naturally, even if you don't have proof of possession if these items can be included in your exemption you won't incur any tax.

With some items, the problem is not tax, but the fact that importing them is restricted in some way or prohibited entirely. Restricted items include cultural artifacts, firearms, and game and hunting trophies. Food items also carry considerable restrictions. Bakery products and cured cheeses are generally admissible, but fruit, vegetables, and processed or fresh meat products are usually either prohibited or restricted. As a general rule, those over 21 years of age can bring in 200 cigarettes or 50 cigars or four and a half pounds of smoking tobacco or proportionate amounts of each and up to one quart of alcohol without owing taxes. If you plan to bring in large amounts of cigarettes or alcohol, check with customs before you go to avoid any complications on return.

Others products are prohibited completely such as drug paraphernalia, absinthe, dog or cat fur, ivory, and articles with marks that are a counterfeit of a federally registered trademark. Merchandise from Afghanistan, Cuba, Iran, Iraq, Libya, Serbia, and Sudan is also prohibited.

If you are bringing in products with the intention to sell them, duty rates will be different. Commercial importers can consult the Harmonized Tariff Schedule, which describes classifications of different commodities and the rates of duty for each class of item.

There are a number things you can do ahead of time to make your stop at customs faster and easier. Whenever you buy anything abroad, keep the sales slip. Likewise, if you buy a valuable item in the U.S. that you'll be taking with you when you travel, keep the sales slip for that item, as well. Don't gift wrap the items you will need to declare and, if possible, pack them separately so they are easily accessible for inspection. Be sure your information about customs regulations comes from a reliable source. For instance, no matter what some shop owners abroad might tell you, you cannot prepay U.S. import tax at a shop abroad. The signs posted in the customs areas of airports can also give you useful guidance about how to clear customs. If you're concerned about an item you'd like to import, consult a customs consultant or a lawyer familiar with import and export law. The Interactive Tariff and Trade DataWeb, a free-of-charge government database run by the U.S. International Trade Commission, can also give you information on import tax rates.