US De Minimis 2026: The $800 Rule Has Ended for Sellers

The Section 321 de minimis exemption used to let shipments worth $800 or less enter the United States free of duty and without a formal customs entry. It’s the reason low-priced direct-to-consumer shipping into the US worked for international sellers. For sellers, that exemption no longer exists. It has been suspended for goods from every country since 29 August 2025, and Congress has repealed it for commercial shipments with effect from 1 July 2027.

This guide explains what Section 321 did, how it ended, how customs duty differs from US sales tax, and what international sellers should do now. It’s accurate as of 28 October 2026. UK sellers should also read selling to US customers from the UK, which covers Royal Mail, DDP shipping and the 10% tariff on UK goods.

US Customs Duty vs. US Sales Tax — Two Separate Systems

These are often confused. They’re run by different agencies, have different thresholds, and work independently.

	US Customs Duties	US Sales Tax
Administered by	CBP (Customs and Border Protection) — federal	State Departments of Revenue — 45 states + DC
Applies to	Physical goods entering the US from abroad	Taxable sales to customers in a state where you have nexus
Threshold	None for sales. The $800 de minimis is suspended (only personal gifts of $100 or less are still exempt)	Typically $100,000 revenue per state; $500,000 for CA/TX/NY
Collected by	CBP at the border, through the carrier, postal clearance partner or customs broker	You at checkout (or the marketplace facilitator)
Rate	Varies by HTS code and country of origin, plus any Section 301 or 232 tariffs	Varies by state and product type
Who pays	The importer of record: you (if you ship DDP) or your buyer (if you don’t)	Your customer (you collect and remit)

A customer who gets a duty bill on delivery is dealing with a federal CBP charge. A customer who sees sales tax at checkout is dealing with a state tax. These are separate charges, from separate authorities, under separate laws.

Both can apply to the same order. An international seller can collect California sales tax at checkout (a state obligation), and the same parcel still owes customs duty at the border (a federal obligation). Since August 2025, that’s true whatever the parcel is worth.

What Section 321 Provided

Section 321 of the Tariff Act of 1930 (19 U.S.C. 1321) lets the government admit low-value goods without formal entry and free of duty and tax. The threshold rose from $200 to $800 in 2016 under the Trade Facilitation and Trade Enforcement Act.

While it applied:

Shipments worth $800 or less per person per day could enter duty-free
No formal customs entry was needed (no CBP Form 3461 or 7501)
No HTS classification was needed on the entry
The carrier sent CBP basic data electronically (shipper, recipient, description, value)

A $50 item from a seller in China, the UK, Canada or Australia reached a US customer with no customs friction and no extra charge. That model has now ended.

How De Minimis Ended: 2025 to 2027

Pressure built from 2023 over lost tariff revenue, the competitive gap with US retailers who pay duty, and the difficulty of inspecting billions of small parcels. Then it moved quickly:

Date	What happened
January 2025	CBP proposed rules to restrict de minimis for goods subject to trade remedies. CBP later said these weren’t the right approach and replaced them
2 May 2025	De minimis ended for goods from China and Hong Kong
4 July 2025	The One Big Beautiful Bill Act became law. Section 70531 repeals de minimis for commercial shipments from 1 July 2027
30 July 2025	Executive Order 14324 suspended de minimis for all countries, effective 29 August 2025
20 February 2026	The Supreme Court ruled in Learning Resources, Inc. v. Trump that IEEPA doesn’t authorise tariffs. The same day, Executive Order 14388 continued the de minimis suspension under 19 U.S.C. 1321
24 June 2026	CBP issued interim final rules indefinitely suspending de minimis for mail and for all other modes
24 July 2026	A new postal informal entry process started for mail worth up to $2,500. Only the owner or buyer of the goods, or a licensed customs broker, can file
13 August 2026	The Court of International Trade upheld the suspension in Axle of Dearborn v. Department of Commerce
22 October 2026	CBP moved the compliance date for extra postal data rules (for regulated goods) to 20 January 2027
1 July 2027	Statutory repeal for commercial shipments takes effect

Practical status as of 28 October 2026: there’s no duty-free threshold for goods you sell into the US, from any country. Every commercial shipment is dutiable and needs an entry with a classification, country of origin and value. The only part of Section 321 that still works is the separate exemption for bona fide gifts worth $100 or less, sent by one individual to another. Businesses can’t use it.

What duty applies now?

A shipment that used to enter duty-free now pays:

The normal (MFN) duty rate for its HTS code. Many consumer goods are low or free.
Any country-specific tariff. After the Supreme Court ended the IEEPA tariffs from 24 February 2026, a 10% Section 122 surcharge applied until 24 July 2026. Since then, Section 301 “forced labour” tariffs of 10% or 12.5% have applied to 60 economies. The UK, Canada, Mexico and India are among those at 10%. China and most others pay 12.5%, and Chinese goods can also owe the older Section 301 tariffs.
Section 232 duties on steel, aluminium and some other goods, instead of the Section 301 tariff.

The Section 301 tariffs are being challenged at the Court of International Trade, but they’re still collected while the case runs.

The Impact on International Drop-Shippers

International drop-shipping, where a manufacturer or wholesaler abroad ships straight to US customers, depended on Section 321 more than any other model. Every one of those parcels is now dutiable. Duty is due on a $15 order just as on a $1,500 one, and the parcel has to clear customs with full data.

The customer either:

Pays the duty on delivery (DAP, Delivered at Place): high friction, frequent refusals
Pays nothing extra, because you prepaid it (DDP, Delivered Duty Paid): a better customer experience, with the duty built into your price

Sellers have responded by:

Moving stock into US warehouses and paying duty once, in bulk, on import. This creates physical nexus for sales tax in the warehouse states. See Amazon FBA and the Physical Nexus Trap
Sourcing from countries with lower tariff rates
Raising US prices or adding a duties line at checkout

The “Per Person Per Day” Rule

While Section 321 applied, the $800 limit was per person per day. That mattered for frequent buyers and for sellers splitting orders:

Several packages to one buyer on the same day, adding up to more than $800, could lose the exemption
CBP could refuse Section 321 treatment if goods were split across shipments to stay under the limit
Legitimate orders near the limit were fine. Deliberate splitting to avoid customs was a violation

With the exemption suspended, splitting orders no longer saves any duty. Every shipment is dutiable anyway. Under-declaring values to cut duty is a customs violation, and the One Big Beautiful Bill Act added civil penalties for misusing exemptions.

Sales Tax Applies Separately

A common mistake: “if customs handles my parcel, I don’t owe sales tax”, or the reverse. Customs duty and sales tax are separate obligations, and the end of de minimis doesn’t change sales tax at all.

If you have economic nexus in Texas, because your sales into Texas passed $500,000, and you ship a $300 item from a UK workshop to a Texas customer:

Customs duty: the normal rate for the product plus the 10% Section 301 tariff for UK goods, paid by you (DDP) or the buyer
Texas sales tax: 6.25% state plus any local rate, collected by you at checkout and remitted on your Texas sales tax return

Paying duty doesn’t cover sales tax, and collecting sales tax doesn’t cover duty. If you sell through Amazon, Etsy or eBay, the marketplace collects the sales tax, but the duty is still yours or your buyer’s.

How Unexpected Customs Bills Destroy the Customer Experience

When a parcel ships DAP, the carrier collects the duty and usually its own fee from the customer before releasing the parcel. Before August 2025 most low-value parcels never triggered this. Now every one does, unless the seller ships DDP.

Common outcomes:

Refused parcels: the customer won’t pay the unexpected bill
Chargebacks: the customer disputes the charge because the item cost more than advertised
Negative reviews: about “hidden import fees”
Lost repeat business: even if the order completes, the customer doesn’t come back

The fix is DDP: you calculate and prepay the duty, then build it into your price or show it at checkout. DHL Express, FedEx, UPS and many postal operators (such as Royal Mail’s Postal Delivered Duties Paid service) offer duty-paid shipping to the US. Some marketplaces now require it. Etsy has required DDP for orders shipped into the US from abroad since 9 July 2026.

Practical Strategy for International Sellers in 2026

Assume every US order is dutiable. There’s no value below which duty disappears, and there won’t be one after the statutory repeal in July 2027.

Classify your products. Find the HTS code and country of origin for each product, and work out the total rate: the MFN rate plus any Section 301 or 232 duty. UK sellers can start with the commodity code finder, since the first 6 digits are the same in the US.

Ship DDP for consumer orders. Prepay duty through your carrier or postal operator, and price it in.

Set US-specific prices. Duty is a percentage of the value, so it rises with your price. To cover it fully, divide your target price by (1 − duty rate).

If you source from China: expect the 12.5% Section 301 forced-labour tariff on top of MFN, plus the older Section 301 tariffs for many products. Compare that with sourcing elsewhere or importing in bulk.

If you’re considering US-based fulfilment: you pay duty once on the bulk import, with a customs broker as importer of record, and ship domestically after that. But stock in a state immediately creates physical nexus there. See Amazon FBA and the Physical Nexus Trap.

Watch the courts. The Section 301 tariffs are under challenge, and IEEPA duties paid before 24 February 2026 are refundable to the importer of record through CBP. Neither brings back de minimis.

More Guides Coming Soon

Detailed guides for sellers affected by the end of de minimis:

HTS Classification Guide for DTC Sellers — how to classify your products, find your duty rate, and dispute an incorrect classification
DDP vs. DAP: International Shipping Incoterms Explained — when to use each and how to set up your checkout for DDP
US Customs Broker Guide — when you need one, how they work, and what they cost

Selling to US customers from the UK — tariffs on UK goods, Royal Mail, DDP shipping and US sales tax
US Sales Tax Overview
Amazon FBA and the Physical Nexus Trap
Foreign Sellers Guide to US Sales Tax Compliance
Form 5472 and the Foreign-Owned LLC Trap