1. Can the Discounted Import Price Support Transaction Value?
For U.S. .mports, federal law under 19 U.S.C. §1401a starts with the price actually paid or payable for goods sold for export to the United States, plus required additions. The discounted amount must reflect the agreement and payment obligations. Restrictions or conditions that fail statutory requirements can prevent use of this method.
Separate Retail Markdowns from Supplier Discounts
A retailer’s Black Friday promotion changes what consumers pay. It does not, by itself, reduce what the importer owes the foreign supplier. Include indirect payments for the seller’s benefit, such as a supplier debt settled by the buyer.
Establish When the Discount Became Effective
For an ordinary supplier discount, CBP looks for a pre-importation agreement, supporting documents, and an unconditional discount or conditions fulfilled before importation. Keep the dated purchase order, discount schedule, acceptance, and payment records. A discount tied to a future purchase target needs particular care if the target remains unmet when the goods arrive.
Under §1401a(b)(4)(B), a rebate or price decrease made or effected after importation is disregarded when determining transaction value. The date on a credit note alone does not resolve the issue. Check whether it records a qualifying earlier agreement or a new price concession.
2. Related-Party Prices Need Customs-Specific Support
Buying from an affiliate does not automatically prevent transaction value. Under §1401a(b)(2)(B), the price may qualify if the circumstances of sale show the relationship did not influence it, or it closely approximates qualifying test values.
Match the Pricing Evidence to the Imported Goods
An income-tax transfer-pricing study does not automatically establish an acceptable customs value. Compare products, periods, quantities, and commercial terms. One possible showing is that the price recovers all costs plus a profit equivalent to the seller’s overall profit on goods of the same class or kind over a representative period. Broader transfer pricing analysis addresses related tax issues, which apply distinct standards.
Distinguish a Pricing Formula from a New Rebate
Certain adjustments under an objective transfer-pricing formula established before importation may receive different treatment from a newly negotiated rebate. The written policy must predate importation and take Internal Revenue Code §482 into account. CBP also examines tax-return use, product-specific pricing and adjustment rules, supporting accounting details, and whether other conditions affect acceptance. The related-party price must independently qualify. A year-end journal entry alone does not support a downward adjustment.
3. Which Costs Must Be Added or Separated?
An accepted discount is only one part of customs valuation. Add statutory amounts only where they are not already included and sufficient information supports them. Without sufficient information for a required addition, transaction value cannot be determined under the statute.
Free Tooling, Components, and Other Assists
Goods or services supplied by the buyer free or at reduced cost for production and export can qualify as assists. Examples include components incorporated into the goods and molds used to produce them. The manufacturer’s zero purchase price does not establish the assist’s customs value. Retain acquisition or production costs and a supported allocation across the relevant units.
Engineering and design services have additional requirements, including that qualifying work be undertaken outside the United States. Do not apply that geographic limitation to molds or components.
Royalties and Other Statutory Additions
Royalties are not automatically dutiable. Review whether the payment relates to the imported goods and is required as a condition of their sale for export to the United States. Read the license and supply agreements together. Buyer-incurred packing, selling commissions, and qualifying resale proceeds accruing to the seller also require review. A genuine buying commission is not a statutory addition merely because the buyer pays it.
Freight and Insurance in the Invoice
International transportation, insurance, and related shipment costs are excluded from the price actually paid or payable. If included in an invoice total, support the excluded amount with actual charges. An Incoterm or estimated freight allowance alone may not establish the deduction. Foreign inland freight has specific rules under 19 C.F.R. §152.103(a)(5), so it should not be deducted automatically.
4. Alternative Methods and the Supporting Record
When transaction value cannot be used, the remaining methods follow a statutory sequence. Record why each preceding method is unavailable before moving to the next. If CBP disputes the chosen basis, a customs value review addresses the method and supporting evidence.
Apply the Six Methods in Order
| Order | Method | Principal Supporting Information |
|---|---|---|
| 1 | Transaction value | Sale, payment, and adjustment records |
| 2 | Transaction value of identical merchandise | Qualifying identical imports exported at or about the same time |
| 3 | Transaction value of similar merchandise | Qualifying similar imports with supported comparison adjustments |
| 4 | Deductive value | Qualifying U.S. .ales at the greatest aggregate quantity, less statutory deductions |
| 5 | Computed value | Materials, fabrication, profit, general expenses, and other statutory components |
| 6 | Fallback value | Reasonable adaptation of earlier methods within statutory limits |
Under 19 C.F.R. §152.101(c), the importer may request computed value before deductive value when filing the entry summary. Fallback does not permit arbitrary values or minimum customs values. Black Friday domestic sales may matter under deductive value if they meet its buyer, timing, quantity, and condition-of-sale requirements. A promotional price alone is insufficient.
Build an Entry-Specific Price Reconciliation
Create a worksheet linking each entry and SKU to the purchase agreement, invoice, actual or payable amount, accepted discount, additions, and supported exclusions. Record why the selected method applies. For alternatives, document why preceding methods were unavailable and identify the comparison, sales, or manufacturing records used.
Give the broker agreements and allocation schedules alongside the invoice. If figures remain uncertain, establish the appropriate reporting procedure before filing. Repeated differences between accounting totals and entry values warrant a broader customs compliance review, including whether previously filed entries require correction.
10 Nov, 2026
