Deductive Value is the third method in the customs valuation hierarchy under 19 U.S.C. § 1401a(d). It applies when transaction value and the transaction value of identical or similar merchandise cannot be used.
Deductive value starts with the unit price at which the imported merchandise (or identical or similar merchandise) is sold in the United States in the greatest aggregate quantity, to unrelated buyers, at or about the date of importation. The importer then deducts:
- Commissions or profit and general expenses earned on U.S. resale
- Usual transportation costs within the United States
- Customs duties, federal taxes, and other federal fees payable on importation
- Costs of further processing in the United States (when applicable)
If the merchandise is not sold at or about the date of importation, the importer may use the price at which it is first sold within 90 days of importation. If the merchandise is sold only after further processing in the United States, the importer may elect a further-processed deductive value at the time the goods are sold in their processed form.
Deductive value is most useful for consignment imports, sale-on-arrival transactions, and situations where there is no sale for export but there is an established U.S. resale price. It is less common than transaction value because most U.S. imports occur under a contract of sale.
An importer may elect to reverse the order of deductive and computed value under § 1401a(a)(2), and many importers do — computed value is often more straightforward for goods produced by related parties or imported on consignment.