Archives September 24, 2002 admin
Advice on US Customs for Returning Residents
Posted by Foie Gras on April 29, 1998 at 08:06:43:
I post this in the hope that you can learn from my experience, since it may save you a significant amount of money. In summary, beware of being overcharged by US Customs on re-entering the US after making an expensive watch purchase overseas.
Presently, there are significant savings which can be made, in some cases, when an expensive watch is purchased overseas. This motivated me (and I’m sure has motivated others) to buy watches during trips outside the USA. I have just returned yesterday from such a trip, and brought back with me two Stainless Steel watches costing in total $7200.
Prior to leaving our shores I had some time on my hands at the airport and visited our friendly US Customs agents in Portland Oregon to register the watch I was wearing on the trip to avoid having to pay duty on it when I returned. Since the agents weren’t busy (during a lull in arrivals) I discussed the issue of watch duties with them. Surprisingly, these agents were quite knowledgeable on the subject, and opened the customs manual to the relevant pages to discuss the rules with me.
The following pertains specifically to mechanical watches of 17 or more jewels, whether self-winding or not. In summary, the first $400 (of total dutiable items) is passed free, the next $1000 is assessed a flat rate of 10%, and THEN THE FUN BEGINS!!
For a watch made of “base metal,” which would include Stainless Steel and titanium, among others, 60% of the value is assigned to the movement, which has a trivial duty of approximately $2.00, 30% to the case (which is dutied at about 5%, and 10% is assigned to the band or bracelet, which is taxed at about 11%. Therefore, the first $1400 will be
For a watch made of “precious metals,” such as gold, platinum, etc., the treatment of the first $1400 is the same as above, e.g. about 7%. Additional value is assessed at about 5% for the case which is assigned 90% of the value, and the movement gets a trivial charge for 10% of the value, or a net total of about 5% for such a watch in excess of $1400.
Please note that the initial $1400 is on the total, so if you bought several watches, you would go into the lower rates immediately on the 2nd, 3rd, etc. watches.
In any event, prior to returning to our shores, I calculated the duty owed on my purchase as approximately $250. Imagine my surprise when the first US Customs agent I encountered (in Chicago) told me I would owe 5.9% on my watches, which would have been a substantial overcharge!! I politely informed him that I thought this was too high, and he then turned me over to his supervisor who was similarly uninformed about the correct charges!! The supervisor then told me that when they add up the various duties, it is usually more than 5.9%, so they just use this number to save us
Ultimately, the supervisor found the correct pages in her manual, and I was charged $260, almost two hundred dollars less than the initial quote. As you can see, I paid a CORRECT TOTAL duty of about 3.6%, including the impact of the 7% rate on the first $1400.
The point of this post is to warn you that individual US Customs agents, in fact multiple ones at any one station, can be woefully
Hope this helps.