CHAPTER XXXVI CUSTOMS DUTIES 303. Tax on Imports. The national government collects a tax from persons who import certain kinds of merchandise into the United States from foreign countries. The taxes thus imposed and collected are called Customs Duties. The process of importing goods is, very briefly, as follows: The foreign shipper prepares an invoice of the goods, showing their value in the coinage of the exporting country. Invoices of goods with a value of more than $100.00 are certified by the United States consul in the foreign city. The consul retains one copy of the invoice and sends another copy to the collector of the United States port to which the goods are shipped. When the goods are delivered to the steamship company, the shipper receives a bill of lading, which is a receipt for the merchandise. This bill of lading and an invoice are sent to the American importer. When the goods arrive at port in this country, the importer presents the invoice and the bill of lading at the custom house, pays the duty, and receives his merchandise. Customs duties are of two kinds: ad valorem and specific. 304. Ad Valorem Duties. "Ad valorem " means: according to value. When an ad valorem duty is placed on goods, the tax is a certain per cent of the value of the merchandise. Ad valorem duties are not computed on fractions of a dollar. If the cents are less than fifty, they are dropped; if fifty or more, they are considered an additional dollar. To compute ad Valorem duty: Reduce the value of the goods stated in foreign money to United States money. Multiply the value by the tariff rate. The Secretary of the Treasury proclaims the value of foreign coinage in terms of United States money, and the most recent proclamation is used as the basis of money reduction. A copy of such a proclamation will be found on page 235. Problem. What is the duty on an importation of woolen dress goods valued at £30, the tariff rate being 35% ad valorem? SOLUTION. Value of shipment in foreign coinage, £30. Value in United States coinage, $146.00. 35% of $146.00 $51.10, amount of duty. = 305. Specific Duties. Specific duties are levied according to the quantity of the goods imported, without respect to their value. The rate is usually stated as a certain number of cents per pound, per hundred pounds, per ton (2,240 lb.), per yard, or other standard of measure. Allowance is sometimes made for tare and breakage. To compute specific duty. When the metric system of measurement is used in the foreign invoice, the quantity must be reduced to the American standards. Duties are not computed on fractions of a unit of measure. Fractions less than are dropped; or larger fractions are considered as an additional unit. Problem. The tariff rate on macaroni is 1 cent per pound. What is the amount of the duty on a shipment of 200 kilos of macaroni? 306. Ad Valorem and Specific Duties. In some cases both an ad valorem and a specific duty are levied on the same importation of merchandise. Problem. The duty on perfumery containing alcohol is 40 cents a pound and 60% ad valorem. What is the amount of the tariff tax on an importation of 10 kilos of perfumery valued at 970 francs? 307. The Tariff. Congress revises the tariff law at various intervals. The law prescribes the tariffs, or rates, to be charged on various imports. The free list comprises those articles on which no duty is placed. The following are some of the customs duties from a recent tariff. Artificial flowers, 60% ad valorem Cabbage seed, 6 cents per pound Castile soap, 10% ad valorem Cheese, 20% ad valorem Cigars, $4.50 per pound, and 25% ad valorem Cocoa, unsweetened, 8% ad valorem Cotton batting, 25% ad valorem Lithographed booklets, 7 cents per pound Oriental rugs, 50% ad valorem Tulip bulbs, $1.00 per thousand Woolen dress goods, 35% ad valorem Written Work Refer to the tariff rates above, and compute the duty on the following importations of merchandise. 1. 50,000 tulip bulbs from Holland. 2. Woolen dress goods from England, valued at 125 pounds sterling. 3. Castile soap from Italy, valued at 40 lires. 4. An invoice of cotton batting valued at £20 15s. 6d. 5. Lithographed booklets, weight 247 lb. 9 oz. 6. A shipment of cheese valued at 820 marks. 7. Silk ribbons from Paris, invoiced at 5,400 francs. 8. Toys from Germany, valued at 1,000 marks. 9. An invoice of 3,000 cigars from Germany. The cigars weigh 12 ounces per hundred, and are invoiced at 52 marks per thousand. 10. The tariff rate on Cuban cigars is 20% less than the rate applying to cigars shipped from other countries. What is the duty on a shipment of 7 cases, each containing 3000 cigars, weight 143 oz. per hundred; value, $50.00 per thousand? REVIEW PROBLEMS Written Work 1. The following differential piece work rates apply in a factory: What is the pay roll for the week, if the production records show the following? 2. An attorney takes $3,500.00 of accounts to collect for a merchant, under an agreement for commissions as follows: 10% on accounts less than 3 months old. 15% on accounts more than 3 months and less than 6 months old. 20% on accounts more than 6 months and less than 12 months old. 25% on accounts more than 12 months old. He makes collections as follows: $675.90 two months old. 139.80 four months old. 1,465.30 ten months old. 617.19 fifteen months old. What is his total commission and how much does the merchant realize from the collections? 3. Show the annual depreciation for 5 years on an asset which cost $15,000.00 with an estimated life of 12 years and an estimated residual value of $2,800.00. |