Harbor Maintenance Fee: The 0.125% Rate, Who Pays, Exemptions

Key Points

• The harbor maintenance fee (HMF) is 0.125 percent of the value of commercial cargo for the use of a port, with no minimum and no maximum.
• Imported cargo pays when it is unloaded at a port subject to the fee, and the fee is paid on the entry summary together with the merchandise processing fee.
• Domestic shipments and foreign-trade zone admissions pay the fee on a quarterly summary rather than on an entry summary.
• Air cargo, truck and rail cargo from Canada or Mexico not unloaded at a covered port, and exports are not charged.
• A foreign shipment unloaded in Honolulu is not exempt, because the Alaska, Hawaii and possession exemptions cover only domestic movements.

On this page

1. What the harbor maintenance fee is and how it is calculated
2. Which shipments pay the fee
3. Exemptions from the fee
4. Common harbor maintenance fee entry errors
5. What importers should do
6. Key references

The harbor maintenance fee is a charge of 0.125 percent of the value of commercial cargo, imposed for the use of a port. It has no minimum and no maximum, and it applies to cargo unloaded at a port subject to the fee unless an exemption applies. Importers pay it on the entry summary alongside the merchandise processing fee.

The links in this article go to the primary documents: the statutes, regulations, and official agency pages themselves. Read the source.

What the harbor maintenance fee is and how it is calculated

The fee is imposed by 26 U.S.C. 4461, with the related rules on who is liable and what is exempt in 26 U.S.C. 4462. CBP collects the fee and the procedures for paying it are in 19 CFR 24.24.

The rate and the base

• Rate: 0.125 percent of the value of the commercial cargo.
• No floor: there is no minimum fee, so even low-value shipments are charged.
• No cap: there is no maximum, so the fee scales with cargo value, unlike a fee that stops at a fixed amount.

Because the fee is a percentage of value, it is not a duty. It does not depend on the tariff classification or the country of origin, and it is charged separately from any ordinary, Section 232, Section 301, or AD/CVD duties on the same goods.

Which shipments pay the fee

Imports

Imported cargo pays the fee when it is unloaded at a port subject to the fee. The trigger is the unloading at the port, not the type of entry. A vessel shipment that is unloaded at a covered port and then moved in bond to an inland location for entry still has the fee due, even though the entry is filed far from the water.

For imports, the fee is paid on the entry summary together with the merchandise processing fee. The two charges are calculated differently and should not be confused. The sibling article, Harbor Maintenance Fee and Merchandise Processing Fee: Customs Entry Errors, covers how the two fees interact on an entry. This article covers the fee itself.

Domestic shipments and foreign-trade zone admissions

Not every payer files an entry summary. Domestic shipments that move by water between covered ports, and merchandise admitted to a foreign-trade zone, pay the fee on a quarterly summary instead. The party responsible for those shipments reports them for the quarter rather than paying shipment by shipment at entry.

Exemptions from the fee

The exemptions follow from the way the fee is framed: it is a charge for using a port. Cargo that does not use a covered port, or that Congress or the courts have placed outside the fee, is not charged.

Cargo that does not use a covered port

• Air cargo: cargo arriving by air does not pay the fee.
• Truck and rail from Canada or Mexico: cargo arriving by truck or rail over a land border that was not unloaded at a port subject to the fee is not charged.

Exports

Exports do not pay the fee. The Supreme Court held in 1998 that the fee could not be charged on exports, so no export shipment should carry it.

Domestic movements named in the statute

26 U.S.C. 4462(b) names certain domestic movements that are exempt:

• cargo moving between the mainland and Alaska, Hawaii, or a possession of the United States; and
• cargo loaded and unloaded within the same one of those places.

These exemptions describe domestic movements only. A foreign shipment unloaded in Honolulu is not exempt, because it is an import unloaded at a port subject to the fee, not a movement between the mainland and Hawaii. The same logic applies to foreign cargo unloaded in Alaska or at a port in a possession.

Humanitarian and government cargo

Certain humanitarian cargo and certain government cargo are also exempt. Confirm the specific category in the statute and in 19 CFR 24.24 before relying on it, since these exemptions are defined narrowly and the entry should reflect the basis for the exemption.

Common harbor maintenance fee entry errors

Fee charged on an air shipment

Air cargo is exempt, yet the fee sometimes appears on an air entry, often because of a template or a mode of transport entered incorrectly. Check the mode of transport first, then confirm the fee line was not populated by default.

Fee missed on a vessel shipment entered inland

A vessel shipment that was unloaded at a covered port and moved in bond is easily treated as an inland entry with no port use. The fee is still owed because the cargo was unloaded at the port. When the entry is filed at an inland port, confirm how the cargo arrived and where it was unloaded.

Fee computed on the wrong value

The fee is 0.125 percent of the value of the commercial cargo. Applying the rate to a figure that does not match the cargo value on the entry produces an incorrect fee in either direction. Reconcile the base used for the fee against the entry values, and recheck it whenever a value is amended.

If an error surfaces after an entry has liquidated, the timing rules matter. See Customs Protest Deadline: 180 Days From Liquidation Explained.

What importers should do

• Check the mode of transport and the port of unloading on every entry before the fee line is finalized, so air and land-border cargo is not charged and vessel cargo is not missed.
• Flag in-bond vessel movements so the fee is paid even when the entry is filed at an inland location.
• Verify that the fee is calculated at 0.125 percent of the cargo value on the entry, with no minimum or maximum applied.
• For domestic shipments and foreign-trade zone admissions, confirm who files the quarterly summary and that every covered movement is on it.

Key references

• 26 U.S.C. 4461: imposes the harbor maintenance fee on the use of a port.
• 26 U.S.C. 4462: defines liability and the exemptions, including the domestic movements in subsection (b).
• 19 CFR 24.24: CBP procedures for paying the harbor maintenance fee.
• CBP: agency landing page for guidance on fees and entry filing.
• Harbor Maintenance Fee and Merchandise Processing Fee: Customs Entry Errors: companion article on entry mistakes.