HTS Codes

What is an HTS code?

An HTS (Harmonized Tariff Schedule) code is a standardized numerical method of classifying traded products. These internationally-recognized codes, ranging from 6 to 10 digits, are used by customs authorities worldwide to identify products and determine applicable import duties, taxes, and regulations.

How HTS codes are structured

HTS codes follow a hierarchical structure:

• First 2 digits: Chapter number (broad category)
• Digits 3-4: Heading number
• Digits 5-6: Subheading (international level)
• Digits 7-10: National level detail (specific to each country)

Importance in international trade

HTS codes play a crucial role in global commerce by:

• Ensuring consistent product classification across borders
• Determining correct duty rates and taxes
• Facilitating customs clearance processes
• Enabling accurate trade statistics collection
• Supporting compliance with trade regulations

Common uses and applications

Businesses engaged in international trade use HTS codes for:

• Import/export documentation
• Customs declarations
• Trade compliance
• Market research
• Supply chain management
• Cost calculations for international shipping

HTS codes vs. HS codes

While often used interchangeably, HTS and HS codes have distinct characteristics:

• HS (Harmonized System) codes are the international standard, using 6 digits
• HTS codes are the U.S.-specific version, extending to 10 digits
• The first 6 digits of HTS codes match the HS code system
• Additional digits in HTS codes provide U.S.-specific product details
• HS codes are maintained by the World Customs Organization (WCO)
• HTS codes are managed by the U.S. International Trade Commission

Best practices for HTS classification

When working with HTS codes, organizations should:

• Regularly review classifications for accuracy
• Maintain detailed product documentation
• Consult customs brokers for complex items
• Stay updated on classification changes
• Consider binding rulings for uncertain cases

HTS codes are essential tools in international trade that help standardize global commerce and ensure proper duty assessment. While complex, understanding these codes is crucial for any business involved in importing or exporting goods.