News & Publications

Ozone Depleting Chemicals: What an Electronics Importer Should Know

Some importers of electronics may be unaware of all of their tax liabilities.  While the importer may be fully aware of what duties and taxes are normally due upon importation of goods, many don’t know of the additional excise taxes that are placed on imported electronic goods, especially those utilizing Ozone Depleting Chemicals (ODCs) during the manufacturing process. 

ODCs have traditionally been used in the manufacturing process for printed circuit boards. In an effort to decrease the amounts of ODC usage, “[t]he Montreal Protocol on Substances that Deplete the Ozone Layer was designed to reduce the production and consumption of ozone depleting substances in order to reduce their abundance in the atmosphere, and thereby protect the earth’s fragile ozone Layer. The original Montreal Protocol was agreed on 16 September 1987 and entered into force on 1 January 1989.”1
   
As of January 1, 1990, any company that imports electronic items into the United States must pay excise taxes on all imported goods that fall under this protocol. 

The taxable items can be located in Imported Products Table (26 CFR 52.4682-3). This list contains the HTS number and the ODC that applies.  

Imported Products Table
Part I    Products that are mixtures containing ODCs
Part II    Products in which ODCs are used for purposes of refrigeration, air conditioning, creating an aerosol, or manufacturing electronic components 
Part III    Products that are not Imported Taxable Products

(    Part II contains: Electronic items not otherwise listed in the Table: Included in HTS chapters 84, 85, 90(

Over the years it has become common practice not to use ODCs in the manufacturing process, so there may not be many imports where this excise tax actually applies.  If the manufacturer doesn’t use ODCs in the manufacturing process, they can furnish the importer with a Manufacturer’s Letter. This letter from the manufacturer, outlining the process that is used to make the goods, should contain a statement as to when the manufacturer stopped using ODCs. This will result in any items from that supplier being treated as non-taxable.  

If you import electronics and have any additional questions on ODCs, the filing process, or if you need assistance obtaining letters from your manufacturing base, please contact Allyn International at sales@allynintl.com. 

Allyn International is a privately-held professional services firm established in 1992.  We are dedicated to providing high quality customer centric services and solutions for the global marketplace.  Allyn’s core products include global trade compliance, logistics sourcing, freight forwarding, supply chain consulting and tax management. 

 

This website uses a variety of cookies, which you consent to if you continue to use this site. You can read our Privacy Policy for details about how these cookies are used. Manage Cookies