Tariff (Import Duty)
Definition
A tax charged on imported goods, usually a percentage of their customs value, based on the product's HTS code and country of origin.
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Formula
Duty = Customs Value × Duty Rate %Duties belong in landed cost and flow to COGS as units sell, not into a general expense account. With rates changing often, they have become one of the biggest swing factors in product margins.
Rates can stack: a base rate plus additional tariffs by country. Watch for: product prices set before duty changes that have not been revisited, because margins may have shrunk without anyone noticing.
Example
A $100,000 shipment with a 25% total duty rate costs $25,000 in duties, which adds $2.50 per unit to a 10,000-unit order.