The Harmonization Code and
In the last few years, the international community has standardized import and export classifications. This international agreement has led to the development of a Harmonized System of numbering import and export products. This is not a decision made only by the United States, but a decision made by the international business community. And like any governmental ordinance, it is complex.
How does this standardization affect you, the independent contractor or small business owner? When you ship products internationally, you are required to assign the products a code number that complies with the HS (Harmononized System) standard. Any business selling merchandise internationally has to assign a code number to shipped products. This code number is to appear on the invoice along with other standard export/tariff information. (Note: At this time, an individual selling a single item internationally from an auction site sale must complete standard custom forms, but does not have to assign a code number.) Also, if you sell to a U.S. business that in turn sells your product overseas, you may still need to assign a code number to your product. This is so your customer/client will add the correct HS number to its own invoices.
As of June 2003, the assigning of code numbers applies only to products, not to services. In other words, those who sell services (such as editing and writing) internationally do not have to assign a code number to their services. However, this ruling is very likely to change sometime during the next decade as the international coding system is expanded.
To learn more about international trade regulations, go to the Trade Information Center http://www.usitc.gov/tata/hts/. The top right column lists several links to HTS Tools including the Current Tariff Database. The following paragraph comes directly from the Tariff & Tax Information site:
Schedule B Export Codes
The following information has been taken directly from the Census Bureau's web site, http://www.census.gov/foreign-trade/schedules/b/
What is a HS (Harmonized System) number?
The Census Bureau's Schedule B Search Engine has a number of web-based resources for self-classifying HS numbers for your products. (Use the Census Bureau link above.) After identifying the HS number for your product, visit the Trade Information Center's tariff resource page to begin searching for duty and tax information.
If you have trouble classifying your product and need assistance, call the numbers listed below to speak with a commodity specialist at the U.S. Census Bureau Foreign Trade Division.
For other assistance with exporting U.S. products, please contact 1-800-USA-TRADE.
The following example shows how I applied this information on a specific project.
After doing initial research on appropriate sites, I called the Census Bureau division that handles assigning Schedule B (export) and Harmonization Codes (HC) for durable goods to verify my findings.
The Schedule B number for a pre-recorded video, in a cassette, having both sound and video, tape size greater than 6.5 mm but no more than 16 mm. (A half-inch tape is approximately 12.6 mm.): HC 8524.53.1040
The Schedule B number for a CD-ROM with text, sound, and video. (It does not matter if this is an individual CD-ROM or a set.): HC 8524.32.0000
The Schedule B number for a disc for laser reading systems for reproducing data, etc. in a machine readable binary form and capable of being manipulated. (Otherwise known as an educational DVD.): HC 8524.39.4000
The appropriate code number should be printed on all invoices for these products, along with your FEIN and other important business identifiers.