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What is the difference between HS codes, HTS codes, and tariff codes?

Harmonized System (HS) codes are internationally standardized 6-digit codes used to classify traded goods. Harmonized Tariff Schedule (HTS) codes are 10-digit extensions of HS codes used by the U.S. to determine import duties and regulations. Tariff codes generally refer to classifications used to impose duties on imports, varying by country and often based on the HS system.

Why is HS code classification important?

HS codes are important because they’re the language of international merchandise trade. Not only is HS classification a mandatory requirement for customs, but submitting an inaccurate HS code can result in an overpayment or underpayment of duties and taxes or a violation of trade compliance laws, which can lead to goods being delayed at the border and an assessment of penalties and fines.

Can I use the same HS code for multiple products?

It’s not recommended to use the same HS code for multiple products if they’re different in composition, form, or function. HS codes are assigned based on the specific characteristics of the product, so each product should be classified under the appropriate code that best describes its attributes.

How often do HS codes change?

HS codes are periodically reviewed and updated by the World Customs Organization (WCO) to ensure that they reflect changes in technology, trade practices, and new products entering the market. The most recent version of the HS (HS 2022) became effective on January 1, 2022. However, many countries still use older HS versions, which are noncompatible with HS 2022.

How can I automate HS code classification?

Automated HS code classification is achieved through the deployment of ML and AI technology. Avalara Tariff Code Classification offerings combine an intuitive AI-enabled tool with machine learning and human expertise.