AMS Proposes to Raise Tax on Imported Upland Cotton by 11%
The Agricultural Marketing Service issued a proposed rule that would amend the Cotton Board Rules and Regulations to increase the supplemental assessment rate and change the Harmonized Tariff Schedule statistical reporting numbers that were amended since the last assessment adjustment. AMS said the changes are necessary to ensure that assessments collected on imported raw cotton and the cotton content of imported products are the same as assessments collected on domestically produced cotton.
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Would Increase Cotton Assessment 16%
AMS is proposing to increase the value assigned to imported cotton for the purpose of calculating the assessments1 on imported cotton by about 11% (from $0.012665 to $0.014109 per kilogram of imported cotton). According to AMS, this increase reflects the increase in the weighted average price of upland cotton received by U.S. farmers during the period January-December 2011.
(If the volume of cotton products imported into the U.S. in 2012 remains at the same level as in 2011, AMS said it expects the revised assessment rate to generate an additional $8.3 million in revenue.)
AMS Says Existing Exemptions Would Still Apply
AMS said that under the Cotton Research and Promotion Regulations, importers meeting certain criteria are exempt from assessments. For example, importers with line-items appearing on U.S. Customs and Border Protection (CBP) documentation with value of the cotton contained therein results of an assessment of $2.00 or less are not subject to assessments. In addition, imported cotton and cotton-containing products may be exempt from assessment if the cotton content is U.S. produced, cotton other than Upland, or 100% organic (if certain requirements are met). (See 7 CFR 1205.519.)
AMS said it compared the current import assessment table2 with the International Trade Commission’s 2012 HTS and information from U.S. Customs and Border Protection, and identified HTS statistical reporting numbers that have been removed. AMS proposed to change the import assessment table to reflect these changes.
(CBP has previously said that for articles which do not contain any cotton but are properly classified under an HTS number that is subject to a cotton assessment, the exemption number “999999999” should be reported in column 34 to indicate that no fee is required. See CSMS #92-000182 for instructions on the cotton assessment, including those on the other exemptions described above. (here)
1The total value of assessments is the sum of a flat rate levied on the weight of cotton imported and a supplemental assessment levied at a rate of five-tenths of one percent of the value of imported raw cotton or the cotton content of imported cotton-containing products.
2The import assessment table appears in 7 CFR 1205.510(b)(3)(ii).
(See ITT’s Online Archives 11083117 for summary of AMS increasing the assessment on imported cotton in August 2011 by about 16%.)
AMS contact -- Shethir Riva (540) 361-2726