The de minimis tax exemption!

The de minimis tax exemption, Section 321 of the Tariff Act of 1930, is a law administered by U.S. Customs and Border Protection (CBP). This law allows shipments bound for American businesses or consumers with a retail value at or below $800 (per person, per day) to enter the United States free of duty and taxes.

The provision was intended for travelers to bring home their souvenirs without paying duties, but new laws have expanded what can be shipped, and the provision has changed from $5 to now up to $800 in 2016 under the Trade Facilitation and Trade Enforcement Act.

For now, companies like Temu and Shein are flooding the delivery carriers, boosting their volume while straining their profitability margins. Carriers must balance volume to help cover cost, efficiency, and revenue to maintain their desired profitability.

In the industry today, Congressional reform is being evaluated by U.S. lawmakers, but the change has positives and negatives depending on your viewpoint.

The opinions expressed do not necessarily reflect the views of the Firm, its clients, or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.