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Tax Considerations

When individuals buy goods abroad and bring them back to the United States, they are subject to taxation on the value of those goods. Currently, travelers may bring back $400 worth of foreign-acquired goods without having to pay a duty on those goods, known as “duty free” merchandise. There are some important limitations to the duty free exemption:

  • travelers must have been outside the United States for at least 48 hours,
  • they may not have imported duty free goods within 30 days, and
  • they must be able to present the purchases for inspection upon their arrival at the port of entry.

After travelers have used their exemption on their first $400 worth of duty free goods, the next $1,000 worth of items they bring back for personal use or gifts are subject to duty, taxed at 10%. For some products, there are additional limits on the quantity they may bring into the United States duty free. For example,

  • 100 cigars,
  • 200 cigarettes, and
  • one liter of wine, beer, or liquor.

Depending on where travelers purchased some items, their duty free exemption may be higher. The exemption is $600 for goods purchased in any of 24 specific countries in the Caribbean and Central America. For a group of U. S. possessions (the U.S. Virgin Islands, American Samoa, and Guam), the exemption is $1,200.

Inside Tax Considerations