Duty-Free as Tools of Trade

Posted on January 15, 2020

What do an MRI machine, a screwdriver, and a laptop have in common? A random assortment of goods for sure, but each of these products, as well as many other items, could be eligible for duty-free importation under the US Customs Provision: Tools of Trade. According to Customs and Border Protection (CBP), tools of trade are defined as instruments, equipment, or apparatus that are necessary for the exercise of a trade or profession.  

Now you may be wondering, what exactly constitutes a tool of trade? Is the product you are importing eligible for duty free status?

In order to be considered a tool of the trade and receive preferential duty treatment, the item must (1) be exported from the United States with the intent for temporary use abroad and (2) be re-imported into the United States by the individual (or account) who originally exported it.

For instance, a software developer who brings a laptop overseas to design a new computer program for a foreign customer would be able to re-import the laptop duty free. On the other hand, a company who exports a repair/replacement part abroad for use in a machine that is unexpectedly taken out of commission shortly thereafter, would not be considered tools of the trade as the item was not intended for temporary use.

Regular service calls and temporary exports could be resulting in significant import costs for your company; the tools of trade provision offers duty exemptions for these types of importations. The nuances of this provision can be time consuming and overwhelming. It is advisable that you or your trade compliance consultant carefully review your products before exportation to ensure an efficient and advantageous re-importation.

For assistance in navigating these nuances, Allyn International has a dedicated team of Trade Compliance Specialists and Licensed Customs Brokers who can manage this process for you.

If you would like more information on whether your products are considered tools of trade or other potential duty savings, please contact Ally International at sales@allynintl.com.

Contributor: Kyle James 


About Allyn International 

Allyn International is dedicated to providing high quality, customer centric services and solutions for the global marketplace. Allyn's core products include transportation management, logistics sourcing, freight forwarding, supply chain consulting, tax management and global trade compliance. Allyn clients range from small local businesses to Fortune 500 firms. Allyn conducts business in more than 20 languages and has extensive experience in both developed and emerging markets. Highly trained experts are positioned throughout North and South America, Europe and Asia. Allyn’s regional headquarters are strategically located in Fort Myers, Florida, U.S.A., Shanghai, P.R. China, Prague, Czech Republic, and Dubai, U.A.E. For more information, visit www.allynintl.com.