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Cotton Import Fee Exemption May be Removed

Friday, December 11, 2015
Sandler, Travis & Rosenberg Trade Report

The Department of Agriculture’s Agricultural Marketing Service has proposed to amend the Cotton Board Rules and Regulations to remove the cotton import de minimis provision, which exempts importers from paying the cotton fee on cotton or cotton-containing products when the line item value is $2.00 or less. This exemption was initially established to lessen the administrative burden of collecting the cotton fee where the costs of collection would exceed the value of the assessment. However, technological advances in U.S. Customs and Border Protection’s documentation process have reduced the collection costs so that they no longer exceed assessment rates of $2.00 or less.

For merchandise subject to the cotton fee, the total value of assessments levied on cotton imports is the sum of two parts. The first is based on the weight of cotton imported and levied at a rate of $1 per bale of cotton (500 pounds). The second is based on the value of imported cotton lint or the cotton contained in imported cotton products and levied at a rate of five-tenths of one percent of the value of domestically produced cotton.

AMS is accepting comments on this proposed rule no later than Jan. 11, 2016.

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