How to Know If You’re Using the Right HTS Code

Every importer has asked the same question: Am I using the right HTS code? 

It’s not small talk. That string of digits decides whether you’re paying the correct duties or quietly bleeding money. And Customs will eventually let you know which one it is.

Why HTS Codes Matter

The Harmonized Tariff Schedule is supposed to make trade uniform. Instead, it makes plenty of importers sweat. Behind every product description in the HTS is a set of rules that controls duty rates, admissibility, and reporting. Miss by a number and you’re either overpaying or underpaying. Overpaying erodes margins. Underpaying invites penalties. Neither is a good business model.

Signs You Might Have the Wrong Code

Most importers find out they’ve been using the wrong code the hard way: through an audit. But you don’t have to wait for Customs to tell you. Here are the usual giveaways:

• You’ve received a Request for Information (CF28). If Customs sends you one of these forms asking for marketing and descriptive literature about your imported product, because they suspect (know?) you’re using the wrong classification.
• The description doesn’t pass the smell test. If you’re stretching a definition to make it fit, you’re probably wrong.
• You took your supplier’s word for it. They might know their product, but not U.S. Customs. Big difference.
• There’s no paper trail. If you can’t prove how you got to your classification, you don’t have “reasonable care.” You just have a guess.

Reasonable Care vs. “It’s never been a problem before”

Customs gives importers some leeway under reasonable care. Show your work, prove you made a legitimate effort, and you avoid fines… even if you were off.

But when Customs decides you’re simply not trying, if you’re doing it a certain way because that’s how it was done before then that’s when penalties land. The same error that looked like an honest mistake yesterday is negligence today. Context matters, and Customs sets the context.

How to Get It Right

There’s no shortcut, but there is a process:

1. Read the actual text. Don’t stop at the first heading that sounds close.
2. Check prior rulings. Customs leaves breadcrumbs. Use them.
3. Don’t skip the details. Composition, function, and material.
4. Document your reasoning. If you can’t defend it, you don’t have reasonable care.
5. Call a professional. Sometimes the cheapest move is asking an expert before Customs asks you.

Stop Guessing

Treat HTS codes as a business decision, because every digit has financial and compliance consequences. If you’re not confident in your classifications, odds are good you’re paying for it one way or another.

At O’Meara & Associates, we help importers classify correctly, defend their choices, and avoid the expensive gray areas.

Contact us today and find out if your codes are protecting your margins… or cutting into them.