Due to some updated classification on the LongMill and certain products that we make, orders that were placed after June 2nd may have had reduced duties and taxes on their orders. We’ve changed orders placed (not shipped) after June 2nd to a DDP or DAP status (Delivery Duty Paid or Delivery at Place), which means that any brokerage, duties, and taxes were paid by us.
We let customers know that there may be duties and tariffs at checkout, on our shipping page, and in our emails that are sent out before orders get shipped because we want them to be prepared for them when or if the bill comes. However, many folks don’t read everything, so we’ve had to work with some customers who’ve accused us of not letting them know, which is why we’ve been looking into ways to take over the tax-paying process ourselves.
At this time we are in the process of making sure the system and communication to UPS is working so that we don’t have any unexpected surprises, but so far over the last few weeks, we haven’t seen any customers needing to pay for duties and taxes on their orders.
Duties and Taxes to the US and USMCA
One of the major confusions with our American customers has been in navigating duties and taxes on their orders. According to one of the tax calculation agents we reached out to about figuring out duties and taxes, one of the reasons that Americans aren’t familiar with duties and taxes is because the US has one of the highest de-minimis values in the world and most customers never have been charged. That means that most shipments entering the US with a value lower than $800USD do not get charged duties and taxes, and shipments above $800USD will be assessed for duties and taxes at the border.
There is a trade agreement called the USMCA (an updated version of NAFTA) which provides preferential tariffs on certain items that fall under certain categorizations. Because the majority of parts and materials come from Canada and within North America, the LongMill, with the proper self-certification, is allowed a preferential tariff treatment of 0%. This means that when the LongMill ships from Canada to the US, the LongMill won’t have a tariff.
Without USMCA, duties and taxes rates on all the products we currently sell are between 2.9 and 3%. So if your order was valued at $1800USD, then you’d pay roughly $54USD plus $20-$40ish in brokerage fees. However, now that we have certified the LongMill with USMCA, duties won’t apply.
While we may not have to pay duties and taxes on the LongMill, we do still need to pay a brokerage, or entry preparation fee. This means that UPS charges a fee to submit and do the paperwork to clear the LongMill for entry. We’ve worked with UPS to apply a discount on the brokerage fees, so that these fees should be around 40-50% lower than before. Originally, brokerage fees accounted for around $25-40 per order, but now should be around $12-20 instead.
For the time being, we have been absorbing these fees and paying them on behalf of the customer. We’re still deciding if we should pass them along to the customer in the future, but it seems likely that we’ll continue to pay for them as they are a minor cost overall of the machine.
What does it mean for you?
Well, for the time being, it means that you probably won’t get billed duties and taxes when ordering a LongMill from us anymore. Thus:
- Saving around $75-120 per order in duties and taxes
- Slightly faster shipping times to the US with streamlined clearance
In a way, this is a post to let people know that this transition is happening and to answer people’s confusion on why they haven’t been getting any bills for the last few weeks from UPS.
We’re not making any promises that new orders won’t have duties and taxes that you’ll have to pay. We’re also not making promises or saying that if you got a bill for duties and taxes at any point that we’ll pay them for you. But, over the last few weeks, we’ve updated on our customs documentation to bill all duties, taxes, and brokerage fees to us and it appears on our side that they haven’t been sent to the customer.
If you placed an order after June 2nd and still got a bill, please let us know so we can make sure our system is working correctly.