These codes are used to classify products for import and export shipments. Though sometimes used interchangeably, they are actually very different.
Harmonized Tariff Schedule of the United States (HTSUS) Code
The HTSUS code is used by U.S. Customs and Border Protection (CBP) to determine the tariff rate that should be applied to an imported product. CBP relies on the importer to provide the correct HTSUS code, which is then used to assess the duty rate and any applicable taxes.
The Harmonized Tariff Schedule code is a 10-digit import classification system that is specific to the United States. HTS codes, also called HTS numbers, are administered by the U.S. International Trade Commission (ITC) and are used for imports into the United Sates. It’s very important that all U.S. importers know and use the correct HTSUS codes, because commodity duties are assessed based on this classification. Incorrect classification of goods can lead to costly penalties and delays in customs clearance. Additionally, using incorrect HTSUS codes can also result in a violation of U.S. trade regulations.
The HTSUS code is divided into chapters, with each chapter covering a particular category of goods. Within each chapter, the code is further broken down into subheadings, which provide more specific information about the goods. An HTS code takes the same form as an HS code for the first six digits, and then has four differing last digits.
Using the correct HTSUS code can be a complex process, as there are over 17,000 unique codes. However, there are resources available to help importers determine the correct code for their goods. The U.S. ITC provides a searchable database of HTSUS codes on their website (source:hts.usitc.gov), and customs brokers can also assist with determining the correct classification.
HTS Example: Let’s look at an example for umbrellas: 6603.20.3000 HTS Code with the additional designation "For hand-held umbrellas chiefly used for protection against rain" (vs. 6603.20.9000, which is for all other hand-held umbrellas not chiefly used for protection from rain).
Schedule B Code
A Schedule B number is a 10-digit number used in the United States to classify physical goods for export to another country. The Schedule B is based on the international Harmonized System (HS) of 6-digit commodity classification codes. There is a Schedule B number for every physical product, from paperclips to airplanes.
Schedule B codes are administered and used by the U.S. Commerce Department, Census Bureau, Foreign Trade Division to collect and publish the U.S. export statistics. Schedule B numbers are required to be reported in the Automated Export System (AES) when shipments are valued over $2,500 or the item requires a license.
As with HTS codes, the first six digits of a Schedule B code should be the same as an HS number; however, the last four digits may be different even than the HTS code.
To find the Schedule B Code for your product, you can use the online Schedule B search tool provided by the U.S. Census Bureau. The tool is free to use and is updated regularly to reflect any changes in the Schedule B codes: Schedule B Search. Alternatively, you can also consult with a customs broker or a freight forwarder to determine the Schedule B Code for your product.
If you are planning to export a physical product from the United States, it is essential to ensure that you have the correct Schedule B Code. This code ensures that your product meets the regulatory requirements of the importing country and is essential for a successful export transaction.
Harmonized System (HS) Code
The Harmonized System (HS) Code is a standardized numerical method used to classify goods for international trade. It was developed by the World Customs Organization (WCO) and is currently used by more than 200 countries worldwide. Each country has its own customs regulations, but the Harmonized System provides a common language for identifying goods and determining the applicable customs duties and taxes.
HS codes are recognized in 98% of world trade. The Harmonized System classification is a six-digit standard, called a subheading, for classifying globally traded products. HS codes, also called HS numbers, are used by customs authorities around the world to identify the duty and tax rates for specific types of products as well as identifying products that are regulated for import or export.
HS codes can be used as a universal classification tool. Many governments add additional digits to the HS number to further distinguish products in certain categories. These additional digits are typically different in every country.
HS codes are not required, however omitting the HS code may cause the wrong duty and tax rate to be applied and can also delay customs clearance.
When you are completing export documentation, any documents that are used internationally, like the commercial invoice, should display the six-digit HS code instead of a longer code. If you use a 10-digit code, the numbers may not be accurate for the country of import.
The Harmonized System Code is updated periodically to reflect changes in technology and trade patterns.
What are the Main Differences Between HS and HTS Codes?
HS codes and HTS codes differ in that HS codes are used globally as a classification system by many nations, while HTS codes are exclusive to the United States. Additionally, HTS codes provide more detailed information about goods compared to HS codes. HS codes consist of six digits, while HTS codes have 10 digits and are specific to the United States.