Buying MMC Golf Carts: “How are the Taxes and Handling Fees Calculated

Addressing a question from a potential client: “Hi sunny, how are the taxes and handling fees calculated?  I changed the delivery address from my house in NJ to my house in DE because DE should not have any sales taxes.”

When importing a golf cart from China to Delaware, several factors influence the calculation of taxes and handling fees. Here's an overview of the typical costs involved:

1. Import Duty/Customs Duty:

   • The import duty rate for golf carts can vary, but it is generally around 2.5% to 4% of the declared value of the golf cart.

   • This rate is determined by the Harmonized Tariff Schedule (HTS) code applicable to golf carts. You can find the specific rate by looking up the HTS code on the U.S. International Trade Commission (USITC) website.

2. Value Added Tax (VAT):

   • The U.S. does not impose a VAT on imports.

3. Merchandise Processing Fee (MPF):

   • For shipments with a declared value over $2,500, the MPF is 0.3464% of the value of the goods, with a minimum fee of $27.75 and a maximum fee of $538.40.

4. Harbor Maintenance Fee (HMF):

   • If the goods are transported through a U.S. port, the HMF is 0.125% of the value of the commercial cargo shipped through identified ports.

5. Customs Broker Fees:

   • If you use a customs broker to handle the import paperwork, you will incur fees for their services. These fees can range from $100 to $500, depending on the complexity of the shipment.

6. Shipping Costs:

   • The cost of shipping the golf cart from China to Delaware varies depending on the shipping method (e.g., sea freight, air freight), the size and weight of the shipment, and the shipping company used.

7. Insurance:

   • It's advisable to insure the shipment, which adds to the cost. The insurance cost is typically around 0.5% to 2% of the shipment value.

Calculation Example

Suppose the declared value of the golf cart is $10,000. Here's a rough breakdown of the costs:

1. Import Duty: 3% of $10,000 = $300

2. MPF: 0.3464% of $10,000 = $34.64 (minimum fee applied if less)

3. HMF: 0.125% of $10,000 = $12.50

4. Customs Broker Fees: Approximately $200 (this can vary)

5. Shipping Costs: Varies, assume $1,000 for sea freight

6. Insurance: 1% of $10,000 = $100

Total Estimated Costs: $300 (duty) + $34.64 (MPF) + $12.50 (HMF) + $200 (broker) + $1,000 (shipping) + $100 (insurance) = $1,647.14

This total does not include any additional fees that may apply, such as storage fees, delivery fees from the port to your location, or any specific state taxes that may apply upon registration of the golf cart.