Harmonized Tariff Schedule Code (HTS Code)

Harmonized Tariff Schedule codes, or HTS codes, are numbers that identify goods and products shipped internationally. They’re used to assess duties and tariffs and to monitor international trade statistics. For businesses importing goods to the U.S., HTS codes can provide an estimate of the cost of customs duties.

An HTS code is a 10-digit number administered by the U.S. International Trade Commission that represents information about the products being imported to the country. HTS codes are used to determine tariffs on imported goods and to monitor the flow of products across borders. Businesses receiving goods from abroad must use proper HTS codes to label their shipments.

The HTS code includes a product’s HS code, plus four additional digits.

An HS Code, sometimes referred to as a Harmonized System Code or a Harmonization Code, is a six-digit number that identifies goods and products traded internationally. The Harmonized System is the international standard for identifying imported and exported goods, administered by the World Customs Organization. HS codes are reviewed and updated annually. 

Some countries may add numbers for country-specific details—for example, the U.S. adds four digits to the end of the HS code to create the HTS code. Those additional digits, as described above, determine the tariffs that are to be paid on imports.

HTS codes have two primary elements: the HS code and the appended four digits that designate import fees. Those final four digits are determined by the U.S. International Trade Commission.

The HTS code is punctuated by periods after the first four and six digits. For example: 9506.62.4030

Here’s a breakdown of what each number indicates: 

HS code structure: product information

• Digits 1-2: Represent the chapter of the HS code nomenclature, identifying the general category of goods. 
• Digits 3-4: Represent the heading within the chapter, providing more specific information about the goods. 
• Digits 5-6: Represents the chapter’s subheading, with even more granular detail about the product. 

HTS code structure: tariff information

• Digits 7-8: Establish the tariffs that must be paid on an import. 
• Digits 9-10: Track data about international imports.

Here's an example of an HTS code for decaffeinated, organic coffee:

And here is how the code appears in USITC documentation:

U.S. Customs uses HTS codes to track the goods being imported into the country and to determine which tariffs or duties must be paid on the imported goods. They are used by the United States Census Bureau to determine the weight, value, and quantities of goods traded internationally and to track country-to-country trade. They are also used to verify that the goods being traded are legally admissible and not subject to additional regulation.

It's important to have the correct HTS code because there are potential consequences when products are improperly labeled. If your products are classified incorrectly, you could face penalties for fraud or other offenses. You're more likely to get hit with fees or even the seizure of your goods if the government argues that these errors allowed you to save on tariffs and duties or to import goods that would otherwise be restricted or prohibited.

As an importer, you're responsible for any issues that come with having an incorrect HTS, so it's important to verify that you have the correct code. Even if your exporter provides you with a code, it may be partial or contain only the HS information. You can use the search function of the U.S. International Trade Commission to find the HTS code for your product.

You can also use the full PDFs from the USITC to verify that you have the correct HTS. When selecting the HTS code for your goods, read carefully to be aware of any exceptions that might affect the classification of the product you are importing.

You will need to use an HTS code when submitting the necessary documentation for importing goods from abroad. The code will help you to account for the fees incurred when importing items from a specific country. 

HTS codes address differing tariff rates based on the country of origin. These rates will depend on the U.S.’s trade relations with the country. The U.S.’s trade relations with other nations could be standard or have special rates associated with free trade agreements or abnormal trade relations like those associated with sanctions. 

The HTS database may also contain notes associated with tariffs applied to a specific country aside from the U.S. general sanctions regimes. For example, there are special notes about duties related to goods from China, Russia, and Belarus.

Navigating the HTS database and using HTS codes correctly can help to prevent future unwanted issues or penalties. The consequences of using incorrect codes can be serious, especially if you appear to be using the system to your advantage. Keep these common pitfalls in mind in order to protect your business.

Understand who is responsible for the HTS code

As the importer, you're responsible for using the correct HTS code. Your supplier and freight forwarder may also declare the HTS code, but because you are the importer of record, government agencies will hold your business responsible. Verify the codes that you are given to ensure that they are accurate.

Use the most correct HTS code (not the cheapest)

Sometimes, you may import an item that could be described in several ways and, therefore, could fit under several codes. Choose the code that's most correct and applies to the condition and status of your goods at the time they cross the border rather than the code that could plausibly cut your duties the most. In short, your code should agree with what a customs agent would assign if examining the package.

Keep track of trade agreements

Trade agreements and disputes can change the duties and tariffs you must pay. Some trade agreements cut or eliminate tariffs on certain goods. Notes and special categories in the HTS are important to track so you can stay up to date on the latest changes to tariffs when importing goods and potentially capitalize on cost savings.

While HTS codes are used to classify goods imported into the United States, Schedule B codes are used for goods exported from the United States. Schedule B is published by the U.S. Census Bureau and is also based on the HS, using harmonized codes for the first six digits of the Schedule B number. While some Schedule B and HTS codes can be the same, they may also differ. When you are importing goods, always use an HTS code; when you are exporting, always use Schedule B.