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What does an HTS code mean?

HTS is Harmonized Traffic Schedule. HTS codes are unique 10 digit numbers used to calculate the duty or tax on imported goods from other countries.

The United States International Trade Commission (USITC) maintains the HTS codes. However, the Department of Homeland Security Customs and Border Protection unit (CBP), enforces them.

HTS Codes: Key Terms

The many acronyms and terms used to describe ecommerce processes can make it difficult to understand. We’ve compiled a list of terms and acronyms that are used to describe international imports.

Harmonized System

The Harmonized System is a language that can be used to code and identify goods traded internationally. It is also defined as the nomenclature used by almost all countries for their tariffs on transportable goods and trade statistics. The latest version was introduced in the HS system 2022.

HS Code

A six digit code used to classify each item imported. The first two digits indicate the chapter, while the middle two are the chapter heading. The last two digits highlight the sub-headings within the chapter heading.

HTS Code

This is a 10-digit code used to classify imported items. The first six digits are an HS Code, the next two digits highlight the US Subheading for the HS Code, and the final two digits make up a statistical suffix.

World Customs Organization

A non-profit, intergovernmental organization that represents 183 different customs administrators from around the world. The WCO created and maintains the HS System to create uniformity in customs laws across countries.

US Customs and Border Protection

An official government agency that makes legally-binding decisions on the importation into the United States of goods.

Schedule A code

Schedule B codes, which are maintained by the US Census Bureau based on HS codes, are 10 digit codes used to categorize exports from the United States.

An introduction to the HTS

Most countries classify imports and determine the tariff using the HS code. The United States, however, uses the HTS. It was introduced on January 1, 1989. The HTS, unlike the previous tariff schedules is based upon the HS.

How HTS works

The HTS classifies imports based on product characteristics such as name, function and composition. The USITC website has the latest version of the HTS, which is divided into 99 chapters and 22 sections. It identifies a variety of items. The beginning of each section and chapter includes notes that provide important information.

Three chapters of the HTS serve different purposes. Chapters 98 and 99, for example, are reserved for use in the national market while chapter 77 is reserved only for future use.

The HTS has been categorized by chapters and headings, which make up the code HTS for each product. The HTS contains over 10,000 codes for specific products. In Section II, Chapter 10, “Cereals” is classified. This information is important if you are importing cereals into the US. This chapter contains duty rates, descriptions and HTS codes of goods like barley, oats and rice.

HTS code structure

The HTS code is composed of 10 digits, and it can be broken down into 5 sections. The first six digits of an HTS code are the international HS numbers. Take a look at an HTS code in more detail:

Chapter: These numbers are the same in all countries.
The next two digits indicate the chapter within the HTS. These numbers are consistent across countries.
Subheadings: These two numbers classify subheadings within a chapter and are consistent across all countries.
Subheadings (tariff rates lines): These two numbers determine the duty rate and are specific for the United States.
These two numbers are essentially statistical suffixes. These are unique to the United States, and are used to collect trade data.

HTS

Now you know the structure of the HTS codes, try to classify “certified organic durum (seed).”

This is a breakdown of HTS codes: 101.19.00.25

What are HTS codes

HTS codes are available in the HTS PDFs for each chapter. These can be downloaded from the HTS site. You can also search the HTS Database, but you will need to disable any ad-blockers in order to fully utilize it.

Let’s say we want to import Cinnamon. You can find the HTS code of cinnamon in Chapter 9 which has a two-digit numerical value.

All products in Chapter 9 start with the same two numbers (e.g. 09). The product is further classified using a 10-digit HTS code that syndicates the statistical suffix to the heading/subheading.

The HTS code is very important to understand because it will tell you what the tariff or duty on a good imported. Duty rates are divided into three sub-columns: Column 1 (General), Column 2 (Special), Column 3. The HTS contains three different types of duty rates, namely, ad valorem (or ad value), specific and compound.

Let’s look at an example: the HTS code (0906.20.00.00), which is for crushed or ground Cinnamon. According to Column 1 (General), the importation of this item is tax-free and free for most countries. If the item is imported into the HTS from China, the additional duty rate is 7.5%. This is stated under heading 9903.88.15 in Chapter 99, Temporary Legislation. According to Column 2, the rate of duty for this item imported from Cuba or North Korea is 11C/per kilogram.

By sourcing your products in a cost-effective way, you can increase your profits.

The consequences of incorrect HTS code usage

Using HS code incorrectly can impact your business. This includes penalties, delays and increased inspections. US Customs and Border Protection published a publication on informed compliance that highlights some of these effects. You can avoid problems with HTS codes if you do the following:

Verify that the HTS codes supplied by suppliers and forwarders are accurate to ensure correct classification.
The correct code is preferred over the one with the lowest tariff rates. Consult the General Rules of Interpretation, and if you are unsure, seek assistance from the USITC.
Understanding the current trade agreements and programs that could affect tariff rates on specific goods. Details can be found in the General Notes section of the HTS.

How to add HS codes for your Shopify products

HS codes can be vital for international shipping and for importation of goods. Shopify doesn’t support adding 10 digit HTS codes, but it does allow you to enter the first six digits as an HS code.

Add an HS Code to your Shopify products:

Select Products in the left-hand menu bar after logging into Shopify.
Click Add Product at the top-right side.
Scroll down until you see the Customs Information section.
This is the place where your product was manufactured. This is usually where the product was manufactured.
Fill in the HS (Harmonized Systems) code field.
Find your product, and select the six-digit code displayed on the screen.
Enter manually the code if it is longer than 10 numbers.
Click on Save.

Note that you can add the HS code via a CSV or bulk editor within Shopify admin.

Importing into the US? Stay compliant

By understanding HTS and HS code and knowing how to use them, you can avoid headaches while importing goods from abroad into the US.

Knowing these codes will help you make informed decisions about where to import and where not to import.

You can easily bring your products across the border if you classify your items using HTS codes.

HTS code FAQ

Am I required to comply with HTS?

You must follow the HTS to remain in compliance with the law and import goods into the US. Visit the USITC’s website to find out more about this system of classification, including contact information and an About page.

Shopify allows merchants to use the HTS code.

Shopify does not accept 10-digit HTS codes. You can, however, enter the six-digit HTS code on the platform.

How can I find out the HTS number of my goods?

Use the official HTS Search Tool (please read the disclaimer before using).

2) You can search within a particular chapter of the HTS Online.

Use Google but cross-check it with official HTS.

What’s the difference between HS codes and HTS codes?

HTS codes (Harmonized Tariff Schedule Codes) are used by the US Customs to determine tariffs and duties applicable on imports. Globally, HS codes are used to identify products.

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Author: Adeel Qayum

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