8.2 Customs User Fees: Merchandise Processing Fee and Harbor Maintenance Fee

8.2 Customs User Fees: Merchandise Processing Fee and Harbor Maintenance Fee

Core Regulatory Tenet: Merchandise Processing Fee (MPF) under 19 U.S.C. § 58c / 19 CFR 24.23: 0.3464% ad valorem subject to annual FAST Act minimum and maximum statutory caps ($33.58 / $651.50 for FY 2026) | USMCA and qualifying FTAs completely exempt from MPF | Harbor Maintenance Fee (HMF) under 26 U.S.C. § 4461 / 19 CFR 24.24: 0.125% ad valorem on commercial vessel cargo at declared U.S. ports with NO minimum or maximum cap | FTAs provide ZERO exemption from HMF.

The Statutory Origin and Architecture of Customs User Fees

In addition to basic customs duties, importers are required to pay statutory user fees established by Congress to offset the administrative and infrastructure costs of commercial border operations. Two primary user fees appear on nearly every formal customs entry summary (CBP Form 7501):

1. Merchandise Processing Fee (MPF): Enacted under Section 13031 of the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) (codified at 19 U.S.C. § 58c) and implemented at 19 CFR 24.23 to reimburse the U.S. Government for customs commercial processing and automated clearance systems.
2. Harbor Maintenance Fee (HMF): Enacted under the Water Resources Development Act of 1986 (codified at 26 U.S.C. §§ 4461–4462) and implemented at 19 CFR 24.24 to finance the dredging and maintenance of commercial channels and ports by the U.S. Army Corps of Engineers.

Customs brokers must navigate the distinct valuation bases, statutory caps, transport mode requirements, and exemption rules that separate these two exactions.

---

Merchandise Processing Fee (MPF) Mechanics (19 CFR 24.23)

Under 19 CFR 24.23, MPF is assessed on commercial merchandise entering the customs territory of the United States. The fee structure depends directly on whether the shipment is entered under formal or informal entry procedures.

All of these amounts took effect October 1, 2025 under CBP Dec. 25-10 and are adjusted every fiscal year for inflation under the FAST Act. The 0.3464% rate itself is unchanged.

Formal Entry MPF Calculation and the Capping Mechanism

For formal commercial consumption entries (typically merchandise valued over $2,500), MPF is assessed at the statutory ad valorem rate of 0.3464% (0.003464) of the entered customs value. Under Section 32201 of the Fixing America's Surface Transportation (FAST) Act of 2015 (Public Law 114-94), Congress mandated that COBRA user fees be adjusted annually to reflect changes in the Consumer Price Index (CPI-U).

For standard CBLE exam testing, candidates must understand how the Minimum Cap and Maximum Cap partition all formal entries into three distinct mathematical zones:

1. The Minimum Cap Zone (Low-Value Formal Entries): When the calculated fee (0.003464 × Value) is less than the minimum cap — statutory base $25.00, adjusted to $33.58 for FY 2026 — the calculated amount is discarded and the importer pays the flat minimum.
   • Minimum Cap Boundary: $33.58 / 0.003464 ≈ $9,694
   • Rule: Any formal entry with a customs value of about $9,694 or less pays $33.58.
2. The Variable Ad Valorem Zone (Mid-Range Formal Entries): For entries valued between about $9,694 and about $188,077, the fee is computed exactly as MPF = Entered Customs Value × 0.003464.
3. The Maximum Cap Zone (High-Value Formal Entries): When the calculated fee exceeds the maximum cap — statutory base $485.00, adjusted to $651.50 for FY 2026 — the fee stops accumulating and the importer pays the flat maximum.
   • Maximum Cap Boundary: $651.50 / 0.003464 ≈ $188,077
   • Rule: Any formal entry with a customs value of about $188,077 or more pays $651.50. A shipment valued at $10,000,000 pays the same $651.50 as a shipment valued at $200,000.

HOW TO HANDLE THE CAPS ON EXAM DAY: The caps are inflation-adjusted every fiscal year and are published in a Federal Register notice, not in 19 CFR 24.23 — for FY 2026 they rose to $33.58 and $651.50 effective October 1, 2025 under CBP Dec. 25-10, reflecting a 34.331% cumulative FAST Act adjustment to the statutory base amounts. Because the caps are not in the designated regulations, CBLE questions almost always state the applicable minimum and maximum in the question stem. Use the figures given in the question; use the current published figures for real-world work.

Statutory MPF Exemptions and Special Programs (19 CFR 24.23(c))

Certain categories of merchandise are statutorily exempt from MPF or receive special valuation deductions under 19 CFR 24.23(c):

• Preferential Free Trade Agreements: Originating merchandise entitled to preferential tariff treatment under designated FTAs is completely exempt from MPF. Eligible agreements include:
  • USMCA (United States-Mexico-Canada Agreement - SPI "S" / General Note 11)
  • CAFTA-DR (Dominican Republic-Central America FTA - SPI "P" / General Note 29)
  • Chile FTA (SPI "CL" / General Note 26)
  • Singapore FTA (SPI "SG" / General Note 25)
  • Colombia TPA (SPI "CO" / General Note 34)
  • Peru TPA (SPI "PE" / General Note 32)
  • Panama TPA (SPI "PA" / General Note 35)
  • Israel FTA (SPI "IL" / General Note 8)

  EXAM CAUTION: The Generalized System of Preferences (GSP) has never exempted merchandise from MPF. Goods entered under GSP pay the full 0.3464% MPF, subject to the minimum and maximum caps. Note also that GSP authorization lapsed on December 31, 2020 and has not been reauthorized, so GSP-eligible goods currently enter at Column 1 General rates and pay MPF in the ordinary way.

• HTSUS Chapter 98 Special Provisions:
  • Subheading 9801.00.10 (American Goods Returned): Completely exempt from MPF under 19 CFR 24.23(c)(1)(iv).
  • Subheading 9802.00.80 (Assembled Articles with U.S. Components): Under 19 CFR 24.23(b)(1)(i)(B), MPF is assessed solely on the foreign value added (entered customs value minus the cost or value of U.S. fabricated components). For example, if goods valued at $100,000 contain $40,000 in U.S. components, MPF is assessed on $60,000 ($60,000 × 0.003464 = $207.84, which falls between the caps).
• Foreign Trade Zones (FTZ Weekly Entries): Under 19 U.S.C. § 58c(a)(9)(C) and 19 CFR 146.63(c), an FTZ operator approved for weekly entry procedures files a single consolidated formal entry summary per week, paying only one maximum MPF ($651.50 for FY 2026) for all goods transferred into the customs territory that week.

---

Harbor Maintenance Fee (HMF) Mechanics (19 CFR 24.24)

The Harbor Maintenance Fee (HMF) is assessed on commercial cargo loaded onto or unloaded from a commercial vessel at designated U.S. deepwater ports. Implemented at 19 CFR 24.24 and codified at 26 U.S.C. §§ 4461–4462, HMF differs sharply from MPF in both mathematical structure and administrative scope.

The Core Computation Formula

HMF is assessed at a flat ad valorem rate of 0.125% (one-eighth of one percent, or 0.00125) based on the commercial cargo value (CBP User Fee Code 501):

Harbor Maintenance Fee (HMF) Formula: Commercial Cargo Value (USD) × 0.00125 = Harbor Maintenance Fee

Critical Characteristics and Exam Distinctions

1. NO MINIMUM AND NO MAXIMUM DOLLAR CAP: Unlike MPF, HMF has no statutory floor and no statutory ceiling. The 0.125% calculation applies linearly across all cargo values. A $5,000 vessel entry pays $6.25 in HMF; a $20,000,000 entry pays $25,000.00 in HMF.
2. Mode of Transportation Limitation: HMF applies exclusively to commercial vessel shipments loaded or unloaded at ports declared in 19 CFR 24.24 (ports with federally maintained channels). HMF is never assessed on:
   • Commercial air cargo (airports are not ocean ports);
   • Truck border crossings (e.g., Laredo, Detroit);
   • Rail cross-border shipments; or
   • Ports not listed in 19 CFR 24.24 (privately dredged or shallow waterways).
3. THE FREE TRADE AGREEMENT TRAP: Free Trade Agreements provide ZERO exemption from HMF. Even if merchandise qualifies for duty-free and MPF-free treatment under USMCA, CAFTA-DR, or the Chile FTA, if that cargo arrives in the United States aboard a commercial vessel discharging at a declared port (e.g., Houston, New Orleans, Newark, or Los Angeles), the importer must pay the full 0.125% HMF.
4. Unconstitutionality of HMF on Exports: In the landmark Supreme Court decision United States v. United States Shoe Corp., 523 U.S. 360 (1998), the Court held that collecting HMF on commercial exports violates the Export Clause of the United States Constitution (Article I, Section 9, Clause 5), which prohibits taxes or duties on exports from any state. Consequently, HMF is legally collected only on commercial imports, admissions into Foreign Trade Zones, domestic vessel movements between certain ports, and cruise passenger vessels.

---

Side-by-Side Comprehensive Matrix: MPF vs. HMF