Why do you have to declare what you bought when you go through customs?

December 17th, 2009

Customs can be confusing, tiresome, and tedious – and that’s before you reach the hour-long line at JFK. Before getting off the plane (or crossing the border from Mexico) you’ll have to fill out a customs form detailing exactly what you bought and how much it cost. What’s the point though? And why does the government care?

The U.S. government isn’t actually interested in whether you are bringing jeans or a pair of shorts back – it cares that you are bringing something back. Just like people can’t freely enter the country, there are also laws governing which items can be brought back. Items already illegal in the U.S. (like Cuban cigars) are obviously banned, but the government also looks at the value of your purchases. In most situations, if the total dollar value of your items is above $800, there will be a duty (tax amount) assessed on that extra value. If you purchased $923 in clothes, you will only be taxed on $123 and not the full amount. It may seem like the government is making you pay unnecessarily, but they’re actually cutting you a break.

When you buy something in the U.S., no matter how much it costs, you will also be paying a tax on the good. When you’re at customs, you actually are being allowed $800 of tax-free goods – that’s a pretty good deal. Above that amount, the government is only collecting what it normally would receive had you been shopping in the U.S.

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