Duty-Free Purchases - 2003-08-14

Many buyers become confused and misled when they see the term duty-free shop. Travelers think that what they purchase in duty-free shops will not incur duties upon their return to their home country and customs clearance. However, this is not true. Goods sold in duty-free shops are only exempt from customs and taxes in the country where the shop is located. Therefore, if your purchases exceed your personal exemption amount, the items you bought in a duty-free shop, regardless of whether the shop is in the U.S. or abroad, will certainly be subject to customs duties. Items purchased in duty-free shops in a foreign country are subject to U.S. customs duties and other legal restrictions (for example, only one liter of alcoholic beverage is duty-free). However, you can include these items within your personal exemption. The purpose of selling items in duty-free shops is to transfer them outside of that country, and you cannot use, wear, eat, drink, etc., them in the country where you made your purchase. Items purchased in U.S. duty-free shops will also incur U.S. customs duties if you bring them back to the United States. For example, if you buy one liter of alcoholic beverage in a duty-free shop in New York before entering Canada and then bring it back to the U.S., this item will likely be subject to customs duties and income tax.