An HTS code is a unique 7-10 digit number used to classify specific imported products. The length of the HTS code varies from country to country. HTS codes used in the U.S. are 10 digits.
The first 6 digits of the HTS code are derived from the HS (Harmonized System) code. The Harmonized System is maintained by the WCO (World Customs Organization) and followed by all participating countries.
The HTS code is used in a variety of ways, all relating back to international trade.
In the United States, HTS codes are used in the following ways:
When importing into the U.S. importers are required to provide accurate HTS codes for their imported goods. CBP (Customs and Border Protection) agents use the HTS code to calculate and assess import duties and determine product compliance.
Any coffee, tea, or spice products
Applies to both flavored and unflavored teas
Includes non-fermented green tea in packaging of 3kg or less
Tariff Code 10
Identifies country-specific duty rate
National Heading 15
An optional further breakdown of the commodity ie. certified organic
Digits 1 and 2 (HS Chapter)
These numbers note the chapter within the HS nomenclature that applies to the goods. There are 99 total chapters within the HS, broken down into 21 sections. These sections and chapters represent the broadest categories that products can be classified under.
For example, all coffee, tea, and spices are classified under chapter 9. Therefore, the HTS code for any coffee, tea, or spice products will begin with 09.
Digits 3 and 4 (HS Heading)
These digits represent the specific heading within the broader chapter of the HS.
For example, the heading for the HTS code above is 02 which applies to both flavored and unflavored tea. Chapter headings follow a numeric order beginning with 01, continuing with 02, and so on until there are no more headings. There is no limit to the number of headings included within each chapter.
Digits 5 and 6 (HS Subheading)
These numbers represent the subheading within the specific heading. In short, an additional subcategory of a larger category.
In the example above, the subheading is 10 which includes non-fermented green tea in packaging of 3kg or less. Some HS and HTS codes will have 00 as their subheading which indicates there are no further category breakdowns within the HS for that particular commodity.
Digits 7 and 8 (Tariff Code)
Digits 7 and beyond are used to identify country-specific information. In the U.S. digits 7 and 8 signal the specific import duty rate for the product. For example, the HTS code above is subject to an import duty rate of 6.4% of the value of the goods from countries in which the U.S. has no trade agreement.
However, a product classified as 0902.10.90 has a zero, or free, import duty rate applied to it. The difference between the two products in this case is noted by different numbers for digits 7 and 8 and is different enough to warrant a different rate of duty.
Digits 9 and 10 (National Heading)
The final two digits of an HTS code are present to identify an optional further breakdown of the commodity. As noted earlier, the U.S. uses 10 digit HTS codes. However, many commodities contain 00 for digits 9 and 10. This occurs when there is no further breakdown of the commodity beyond the duty rate digits for 7 and 8.
When there is a unique value for digits 9 and 10, it is typically used for statistical reporting. In some cases, though, the final 2 digits are used to signal important information to CBP agents or representatives from PGA’s.
In our example above, the last two digits indicate that the green tea is organic. When the HTS code changes to 0902.10.10.50, this shows that the tea is not organic. However, the rate of duty for both remains the same.
While it’s nice to know how to read and understand HTS codes, it’s not a necessity if you’re working with a Customs Broker. Licensed Customs Brokers have extensive knowledge and experience when it comes to understanding HTS codes. If you’re tired of spending hours and hours analyzing HS codes and making sure you have the right one, our experts are here to help you.
HTS classification can vary based on a number of factors, including a product’s composition, its form and its function. As a result, it can be difficult to pinpoint exactly how your product should be classified.
By using the HTS search lookup tool, you should be able to find your product’s correct HTS code. After inputting a product name or keyword, the tool will pull up a list of matches that you can use to verify that you have the correct code.
It’s possible to use the General Rules of Interpretation to narrow down your search as well. The GRI governs the classification of all products and provides a guideline for assigning International Harmonized System (HS) codes.
Customs brokers are also a reliable resource for confirming whether or not the HTS code you are using is correct. Customs brokers and import consultants are experts in tariff classification and can ensure that you’re using the correct HTS code.
If you’re still having trouble, you can reach out to Customs and Border Protection to get confirmation. CBP is able to offer a binding ruling on product classification and duty requirements, eliminating any opportunity for error.