Written and maintained by CASRAI Editorial Board
Last updated
General regulatory information, not legal or customs-brokerage advice. Valuation of a particular entry is decided on its own facts by the importer of record and U.S. Customs and Border Protection (CBP).
Short answer
Customs valuation is how CBP fixes the dollar value on which duties are assessed. Under 19 U.S.C. 1401a, imported goods are appraised by the first of six methods that can be applied, starting with transaction value: the price actually paid or payable for goods sold for export to the United States, plus listed additions. The other five methods are used in strict order only when the one before cannot be determined.
Definition and scope
Customs value and dutiable value are the everyday names for the appraised value under 19 U.S.C. 1401a. It is a statutory figure built from the transaction, not simply the number printed on a commercial invoice. It is reported on the entry summary (see CBP Form 7501) and sits beside the tariff classification you find through an HTS lookup: classification sets the rate, valuation sets the amount the rate is applied to. The appraised value is also the base for the Harbor Maintenance Fee.
The rules are in 19 U.S.C. 1401a and, in implementing detail, 19 CFR Part 152 Subpart E (sections 152.101 to 152.108). The responsible party is normally the importer of record, often working through a broker (see customs broker license).
How CBP appraises: the order of methods
Section 1401a(a)(1) lists the bases in sequence. Each applies only if the one before it cannot be determined (or, for the second, cannot be used because the transaction value fails the conditions in 1401a(b)(2)). An importer may ask for computed value to be tried before deductive value (1401a(a)(2); 19 CFR 152.101(c)).
Methods compared
| Order | Method | Statute | Regulation | Basis |
|---|---|---|---|---|
| 1 | Transaction value | 1401a(b) | 19 CFR 152.103 | Price actually paid or payable when sold for exportation to the United States, plus the statutory additions |
| 2 | Transaction value of identical merchandise | 1401a(c) | 19 CFR 152.104 | Value of identical goods exported at or about the same time, adjusted for commercial level and quantity |
| 3 | Transaction value of similar merchandise | 1401a(c) | 19 CFR 152.104 | Same approach using similar goods; if several values exist, the lower or lowest is used |
| 4 | Deductive value | 1401a(d) | 19 CFR 152.105 | Starts from the U.S. resale unit price in the greatest aggregate quantity, then deducts profit, general expenses, transport and duties |
| 5 | Computed value | 1401a(e) | 19 CFR 152.106 | Built up from materials and fabrication, profit and general expenses, assists and packing |
| 6 | Fallback | 1401a(f) | 19 CFR 152.107 | The earlier methods reasonably adjusted, using information available in the United States |
Section 152.108 lists bases that may not be used, including prices of U.S.-produced goods, domestic prices in the exporting country, minimum values, and arbitrary or fictitious values.
What goes into transaction value
Transaction value is “the price actually paid or payable for the merchandise when sold for exportation to the United States”, plus amounts for five items listed in 1401a(b)(1), and no others: (A) packing costs incurred by the buyer, (B) any selling commission incurred by the buyer, (C) the value, apportioned as appropriate, of any assist, (D) a royalty or license fee related to the goods that the buyer is required to pay as a condition of the sale, and (E) proceeds of any later resale, disposal or use that accrue to the seller. An addition counts only to the extent it is not already in the price and is based on sufficient information; if sufficient information is missing, transaction value is treated as one that cannot be determined and CBP moves to the next method.
An assist is something the buyer supplies free of charge or at reduced cost for the production or sale for export of the goods: materials and components incorporated in them, tools, dies and molds, goods consumed in production, and engineering, design or plans undertaken outside the United States (1401a(h)(1)(A)). The regulation values an assist at the cost of its acquisition and requires apportionment in a reasonable manner appropriate to the circumstances (19 CFR 152.103(d), (e)).
Added versus not added: a question list for your broker
| Item on or behind an equipment invoice | Treatment |
|---|---|
| Packing costs the buyer incurs | Added if not already in the price (1401a(b)(1)(A)) |
| Buyer’s selling commission | Added (1401a(b)(1)(B)) |
| Tooling, molds or design work the buyer supplied to the manufacturer free or cheaply | Added as an assist, apportioned (1401a(b)(1)(C)) |
| A royalty or license fee the buyer must pay as a condition of the sale | Added (1401a(b)(1)(D)) |
| International ocean freight and insurance | Not part of transaction value: 19 CFR 152.103 Example 4 excludes the ocean freight and insurance (C.I.F.) charges |
| Foreign inland freight on an ex-factory price | Not added on an ex-factory price; freight already included in the price stays in it (19 CFR 152.103(a)(5)) |
| Construction, assembly, maintenance or technical assistance after importation, and transport after importation | Excluded if identified separately from the price (1401a(b)(3)(A)) |
| Customs duties and certain other Federal taxes payable because of the importation | Excluded if identified separately (1401a(b)(3)(B)) |
The “identified separately” condition is the practical point: charges that are bundled into one invoice line cannot be pulled out afterwards by assumption. Ask for them to be itemized.
Where it matters for labs, clinics and supply decisions
Laboratory and clinical equipment often involves exactly the items above: freight and installation quoted with the instrument, software or calibration licences, and tooling or design supplied by the buyer. A related entry topic is the customs bond. Questions worth putting to a broker before an order ships:
- Are freight, insurance, installation and training itemized separately from the equipment price on the invoice?
- Does any royalty, software licence or commission accompany the sale, and is it a condition of it?
- Did we supply anything to the manufacturer free or at reduced cost?
- Is the seller related to us, and does anything restrict how we may use or resell the goods?
When transaction value cannot be used
Under 1401a(b)(2)(A), transaction value is the appraised value only if: there are no restrictions on the buyer’s disposition or use, other than those imposed by law, limiting the geographic area of resale, or not substantially affecting value; the sale or price is not subject to a condition or consideration whose value cannot be determined; no part of resale proceeds accrues to the seller unless an adjustment can be made; and the parties are unrelated, or related but the price is acceptable. Related parties pass if the relationship did not influence the price, or if the price closely approximates a comparison value (1401a(b)(2)(B)). Because the definition requires a sale for exportation to the United States, an arrangement with no sale has no transaction value to start from, and the later methods come into play.
Common misunderstandings
- “Invoice price is customs value.” The invoice price is the starting point. Additions are made and separately identified exclusions are removed. The regulation treats the price “without regard to its method of derivation”, so discounts and formulas are accepted as the agreed price (19 CFR 152.103(a)(1)).
- “Freight is always dutiable.” International ocean freight and insurance are excluded in the regulation’s own example, and foreign inland freight is not added on an ex-factory price (but stays in the price if the invoice already includes it). Post-importation transport is excluded when identified separately.
- “A related-party price is automatically rejected.” It is accepted when the circumstances show the relationship did not influence the price or the test values match closely.
- “CBP can pick any method.” The order is fixed by statute, apart from the importer’s option to request computed before deductive value.
FAQ
What is customs value?
It is the appraised value of imported goods under 19 U.S.C. 1401a, on which ad valorem duties and the Harbor Maintenance Fee are assessed. Most imports are valued by transaction value.
What is transaction value in customs?
The price actually paid or payable for goods sold for export to the United States, plus packing costs, selling commissions, assists, required royalties and license fees, and resale proceeds that accrue to the seller.
What are the customs valuation methods?
Six, in order: transaction value; transaction value of identical merchandise; of similar merchandise; deductive value; computed value; and the fallback method.
What is dutiable value?
Another name for customs value: the appraised value after the statutory additions and exclusions, to which duty rates are applied.
Sources
- 19 U.S.C. 1401a, Value (Cornell LII): law.cornell.edu/uscode/text/19/1401a, checked 2026-11-01.
- 19 CFR 152.103, Transaction value (Cornell LII): law.cornell.edu/cfr/text/19/152.103, checked 2026-11-01.
- 19 CFR Part 152 Subpart E, Valuation of Merchandise (sections 152.101 to 152.108, eCFR): ecfr.gov/current/title-19/chapter-I/part-152, checked 2026-11-01.
