Each person, including a crewmember, arriving in the United States who enters articles for his personal or household use, or as bona fide gifts not imported for sale nor for the account of another person, valued in the aggregate at not over $1,000 fair retail value in the country of acquisition, shall be assessed a flat rate of duty on the articles, as provided in § 148.102. The entry shall be made under subheading 9816.00.20 or 9816.00.40, Harmonized Tariff Schedule of the United States (19 U.S.C. 1202), and is subject to the limitations and conditions in this subpart. Except as provided in § 148.105, the flat rate of duty shall be assessed in place of any rates of duty other than free rates of duty. If the dutiable amount of the article(s) is over $1,000 fair retail value, the flat rate of duty provisions shall apply to the amount not over $1,000 fair retail value, and the excess amount shall be valued under section 402, Tariff Act of 1930, as amended (19 U.S.C. 1401a). The article(s) shall be classified under the appropriate subheading number of the tariff schedule. For purposes of this subpart, “fair retail value” in the country of acquisition means the price at which the merchandise is freely offered there for sale at retail and “country of acquisition” includes America Samoa, Guam, the Commonwealth of the Northern Mariana Islands, and the Virgin Islands of the United States.
Two examples of the application of this subpart are set forth below:
B returned from Europe where he acquired merchandise having a fair retail value of $1,950. Assume for purposes of this example that (1) in addition to the personal exemption of $400, $100 of the merchandise carries a free rate of duty, (2) allowances and exemptions have not been used within the past 30 days, and (3) all articles in excess of allowances and exemptions and duty-free articles are dutiable at rates other than the flat rate.
B presents his baggage to the Customs officer for examination and his declaration for verification. Duty is figured as follows:
| Fair retail value | Duty | |
|---|---|---|
| (a) The $400 personal exemption | $400 | |
| (b) Articles which carry a free rate of duty | 100 | |
| (c) The $1,000 flat rate of duty allowance calculated at: | 1,000 | |
| 4 percent (effective 01/01/01 through 12/31/01) | $40 | |
| 3 percent (effective from 01/01/02) | 30 | |
| (d) Balance of articles subject to duty at rates other than flat rate | 1 450 | (1) |
| Total | 1 1,950 | (1) |
Mr. and Mrs. B return from the U.S. Virgin Islands. During the trip, they acquired merchandise having a fair retail value of $4,900. Assume for purposes of this example that (1) in addition to the personal exemption of $1,200 for each returning resident, $100 of the merchandise carries a free rate of duty, (2) allowances and exemptions have not been used within the past 30 days, (3) all articles in excess of allowances and exemptions and duty-free articles are dutiable at rates other than the flat rate, and (4) Mrs. B made $400 in purchases on the trip, none of which carries a free rate of duty.
Mr. and Mrs. B present their baggage to the Customs officer for examination and their declaration for verification. Duty is figured as follows:
| Fair retail value | Duty | |
|---|---|---|
| (a) The $1,200 personal exemptions for residents returning from the U.S. Virgin Islands are grouped for a total of | $2,400 | |
| (b) Articles which carry a free rate of duty | 100 | |
| (c) The $1,000 flat rate of duty allowance calculated at: | 2,000 | |
| 2 percent (effective 01/01/01 through 12/31/01) | $40 | |
| 1.5 percent (effective from 01/01/02) | 30 | |
| (d) Balance of articles subject to duty at rates other than flat rate | 1 400 | (1) |
| Total | 1 4,900 | (1) |
[T.D. 78-394, 43 FR 49789, Oct. 25, 1978, as amended by T.D. 86-118, 51 FR 22516, June 20, 1986; 52 FR 12149, Apr. 15, 1987; T.D. 87-89, 52 FR 24446, July 1, 1987; T.D. 89-1, 53 FR 51266, Dec. 21, 1988; T.D. 97-75, 62 FR 46442, Sept. 3, 1997; T.D. 01-61, 66 FR 46218, Sept. 4, 2001]