When it comes to running a profitable eCommerce business, reducing shipping costs is a critical strategy. Section 321 allows businesses to take advantage of a US CBP law that virtually eliminates taxes and duties on imports.
In this article, we’ll take you through everything you need to know about Section 321, how it works, and how to use it to your advantage.
What’s Section 321?
Section 321 is a shipment type that allows goods to clear the U.S. Customs and Border Patrol (CBP), duty-free. Simply put, it’s a law that allows for shipments under a specific threshold value to be imported to the United States exempt from taxes and duties.
To qualify for Section 321 a shipment must have a value of less than or equal to $800 (known as the De Minimis). The CBP raised the De Minimis threshold from $200 to $800 as the result of the Trade Facilitation and Trade Enforcement Act of 2015 (TFTEA). The De Minimis only allows for one shipment of merchandise imported by one person (i.e., the business) in one day that may be imported free of duties and taxes. For shipments with a value higher than $800 consider DDP shipping.
The CBP requires the sender of a shipment to provide vital details like the quantity of goods in the shipment, the consignee, the total value, and the origin of the shipment. As your logistics partner, ShipTop ensures all required information is included on every shipment sent out.
What Does Not Qualify?
Section 321 does not apply to goods that require customs inspection, goods subject to the Countervailing (CVD) or Anti-Dumping Duty (ADD), and goods that are regulated by Participating Government Agencies (PGAs), like the USDA, FDA, or FSIS. In addition, cigarettes, cigars, and alcoholic beverages are excluded from Section 321.
Imports from China
The economic trade war between the United States and China resulted in the introduction of Section 301. This section places tariffs and duties on goods imported from China into the U.S.. Fortunately, Section 321 overrides Section 301 as long as the shipment meets the Section 321 requirements and the De Minimis threshold.
Section 321 provides a great opportunity for businesses importing products into the U.S. to reduce and virtually eliminate duties. In addition, businesses manufacturing goods in China and importing them into the U.S. are able to take advantage of Section 321 to override Section 301.
At ShipTop we are committed to staying up to date with international trade laws and requirements to ensure our clients are able to receive the industry’s best logistics service. We offer best-in-class fulfillment and shipping solutions to eCommerce businesses to grow and improve their bottom line.