Background: Customs Inspection User Fee (CUF)
On June 25, 1999, the Miscellaneous Trade and Technical Corrections Act of 1999 (Public Law 106-36) was signed into law. The user fee provisions of the law became effective 30 days after the law was signed. The Act was designed to make miscellaneous and technical changes to various trade laws, including the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), as amended. The amendments made several changes affecting U.S. Customs and Border Protection (“CBP”)'s administration of user fees.
These enacted changes authorized two things: (1) continuation of the $5.00 fee for those passengers aboard commercial vessels or aircraft arriving in the United States from places outside the United States other than Canada, Mexico, and the United States territories, possessions, and adjacent islands, and (2) establishment of a new fee of $1.75 per passenger arriving aboard commercial vessels from Canada, Mexico, or the United States territories, possessions, and adjacent islands. Territories and possessions of the United States include American Samoa, Guam, the Northern Mariana Islands, Puerto Rico, and U.S. Virgin Islands. Adjacent islands, in accordance with the Immigration and Nationality Act, include St. Pierre, Miquelon, Cuba, the Dominican Republic, Haiti, Bermuda, the Bahamas, Barbados, Jamaica, the Windward and Leeward Islands, Trinidad, Martinique, and other British, French, and Netherlands territory or possessions in or bordering on the Caribbean Sea.
On October 22, 2004 the President signed the American Jobs Creation Act of 2004 (Pub. L. 108-357). Section 892 of the Act amended 19 U.S.C. § 58c to renew the fees established under COBRA, which would have otherwise expired March 1, 2005, and to allow the Secretary of the Treasury to increase such fees by an amount not to exceed 10 percent in the period beginning fiscal year 2006 through the period for which fees are authorized by law. It is noted that the law specifically mentions the Secretary of the Treasury, even though CBP is now a component of the Department of Homeland Security. Regulations concerning user fees, among other customs revenue functions, were retained by the Secretary of the Treasury pursuant to Treasury Department Order No. 100-16.
The regulatory procedures for collecting railroad car user fees and air and vessel passenger fees are described in 19 C.F.R. 24.22
On October 21, 2011, Public Law 112-42 was enacted. This law eliminated the exemptions previously set forth in 19 U.S.C. § 58c(b)(1)(A)(i) for those arrivals of passengers whose journeys originated in Canada, Mexico, or any adjacent island. Thus, only arriving passengers whose journeys originated in a territory or possession of the United States, or originated in the United States and were limited to territories and possessions of the United States, are exempt from the customs user fees prescribed by 19 U.S.C. § 58c(a)(5). As of November 5, 2011, each person that issues a document or ticket to an individual for transportation by a commercial vessel or commercial aircraft into the customs territory of the United States from Canada, Mexico, or any adjacent island shall collect from that individual the fee prescribed by 19 U.S.C. § 58c(a)(5), and comply with all other collection and remittance requirements currently set forth in 19 U.S.C. § 58c(d).
In accordance with the Fixing America’s Surface Transportation Act (FAST Act) enacted on December 4, 2015, Public Law 114-94, and as announced in the Federal Register (85 FR 45646), customs air passenger, vessel passenger and railcar fees will be increased by 8.933 percent from the base year of Fiscal Year 2014 to account for inflation.
Effective October 1, 2021, the CUFs will be increased to $6.11 for nonexempt air and vessel passenger arrivals, $2.14 for exempt vessel passengers arriving from certain locations and $9.16 for the arrival of each loaded or partially loaded passenger or commercial freight railroad car. Prepayment of railcar fees will be increased to $111.01 for the annual prepayment per railcar. The new fee amounts are also recorded in Table 1 of the General Notice issued by CBP regarding the fee increases and published in the Federal Register (86 FR 40865).
Background: Immigration Inspection User Fee (IUF)
Amendments to the Immigration and Nationality Act. 8 U.S.C. 1356, passed in 1986 allowed the INS to begin charging a fee for the inspection of passengers on commercial aircraft or vessels. The fee was initially set at $5.00 per passenger in 1986, increased to $6.00 per passenger in 1993 and to $7.00 per passenger in May 2002. The legislation that increased the fee to $7.00 introduced a second fee of $3.00 per passenger effective February 27, 2003. The fee applied to vessel passengers whose journey originated in the U.S. territory, Canada or Mexico. Passengers to whom the $3.00 fee applied had previously been exempt.
The regulatory procedures for collecting INS air and passenger user fees are described in 8 C.F.R. 286.1 – 286.7. The regulations outline the procedures for the collection and remittance of the fees to INS. (These fees are now remitted to the Customs and Border Protection’s, Revenue Division)
Responsibility for Collection and Remittance
It is the responsibility of carriers, travel agents, tour wholesalers or other parties issuing tickets or travel documents to collect the fee from all passengers who are subject to the fee and remit such fees to CBP. Airline tickets should be marked in accordance with the ARC Industry Agents Handbook, SATO Ticketing Handbook, or the individual carrier's procedures manual and should separately identify the fees with a notation on the ticket or travel document issued to the passenger to indicate that the required fee has been collected. Tickets or travel documents not reflecting payment of the fee at the time of issuance will require collection at the time of the carrier's departure from the U.S.
Payments are due in U.S. dollars no later than 31 days after the close of the calendar quarter in which the fees were required to be collected. (See due dates below.)
Checks or money orders drawn on a U.S. Bank in U.S. funds (should be made payable to “U.S. Customs and Border Protection” and sent to:
U.S. Customs and Border Protection
Revenue Division - User Fee Team
6650 Telecom Drive
Indianapolis, IN 46278
|Customs Passenger User Fee (CUF)|
|Period (Quarterly)||Due Date|
|Payment must be received by CBP no later than 31 days after the end of the quarter in which the fees were required to be collected from the passenger.|
|Immigration Passenger User Fee (IUF)|
|Period (Quarterly)||Due Date|
|Payment must be received 31 days after the calendar quarter in which they are required to be collected except for July, August and September.|
|Customs Railcar Fee (CUF)|
|Period (Monthly)||Due Date|
|Payment must be received by CBP no later than 60 days after the end of the month.|
|Current Fee Chart|
|Customs air passenger fee||$6.11 per passenger|
|Customs vessel passenger fee (non- exempt areas)||$6.11 per passenger|
|Customs vessel passenger fee (exempt areas)||$2.14 per passenger|
|Immigration air passenger fee||$7.00 per passenger|
|Immigration vessel passenger fee (non- exempt areas)||$7.00 per passenger|
|Immigration vessel passenger fee (exempt areas)||$3.00 per passenger|
|Customs railroad car fee||$9.16 per loaded or partially loaded rail car|
Remittance of fees collected shall be accompanied by a statement which includes:
- Name and address of the air/sea carrier or tour wholesaler remitting payment;
- Taxpayer ID number (EIN);
- Calendar quarter covered;
- Number of tickets for which fees were required to be collected;
- Amount collected and remitted;
- A breakdown of the fees being paid, if more than one fee is being combined on a single check;
- Carriers contracting with tour wholesalers shall supply the tour wholesaler's name, address, taxpayer ID number, and the number of passenger seats blocked.
Common Causes for Underpayment
Listed below are some of the common causes of underpayment of user fees to U.S. Customs and Border Protection.
Failure to collect and remit customs user fees on all tickets issued/sold both in and outside of the U.S.:
- on one-way tickets into the U.S.
- from employees not traveling on duty status
- on frequent flyer bonus tickets
- on non-revenue tickets, including infants traveling for free
- from departing passengers whose tickets do not indicate a payment of user fees for their arrival into the U.S.
Failure to collect and remit similar immigration arrival processing fees on all tickets issued/sold both in and outside of the U.S. For further information on the remittance of these fees, contact the U.S. Customs and Border Protection Revenue Division, User Fee Team at telephone (317) 381-5400 or e-mail CUFIUFHelp@cbp.dhs.gov.
Failure to collect and remit similar agriculture arrival processing fees on all tickets issued/sold both in and outside of the U.S. For further information on the remittance of these fees, contact the Animal and Plant Health Inspection Service, Debt Management Team, at (877) 777-2128.
Failure to collect and remit similar IRS passenger departure fees on all tickets issued/sold both in and outside of the U.S. For further information on the remittance of these fees, contact the IRS at (800) 829-1040.
Failure to collect and remit TSA passenger fees on all tickets sold. For further information on the remittance of these fees, contact the TSA at (571) 227-2323. Failure to collect and remit FAA passenger facilities charge for individual airports on all tickets issued/sold both in and outside of the U.S. For further information on the remittance of these charges, contact the FAA at (202) 267-8825.
Failure of charter operators to properly collect and remit passenger user fees.
Failure to collect user fees based on ticketed passengers, rather than arriving passengers, as required by Title 19 United States Code 58c for customs user fees, Title 8 United States Code 1356 for immigration user fees, and Title 21 United States Code 136a for agriculture user fees (and corresponding regulations).
Consequences of late payment or not collecting and remitting fees
19 C.F.R. § 113.64(b), as amended, now allows CBP to issue a demand for liquidated damages to an international carrier (or its surety) when that carrier fails to collect and remit certain user fees, or when those fees are untimely remitted. (Payments are considered timely only when received on or before the due date. CBP does not consider post-marked dates)
Interest – Interest on customs user fee debt is determined using the Internal Revenue Service rate as provided by 26 U.S.C. §§ 6621 and 6622. Interest on immigration user fee debt is determined using the Treasury rate as provided by 31 U.S.C. 3717.
Penalty – late pay penalty on immigration user fee debt that is more than 90 days delinquent in accordance with 31 U.S.C. 3717(e)(2)
Damages –Liquidated damages occur as a result of a breach of the terms and conditions of a bond. A CBP bond is a contractual agreement between the bond obligators, i.e., the principal (e.g., importer of record,) and the surety (underwriter of debt). CBP functions as a third party beneficiary to a CBP bond. Liquidated damages may be assessed for two times the amount of customs user fees that were paid late or not remitted at all.
Surety Demand – If the bond principal fails to comply or remit payment of assessed liquidated damages, CBP will demand payment of liquidated damages from the surety to the principal’s bond.
Cross Servicing - In accordance with Title 31, Code of Federal Regulations, Part 285, subpart A, Section 285.2, CBP will refer to the Department of Treasury, delinquent debt over 120 days for immigration user fees. Legally enforceable debt shall be referred to the Secretary of the Treasury for the purposes of cross-servicing the debt. Among other steps, the debt, including a service fee, will be deducted from any federal income tax refund payable to you
All air and sea carriers, tour wholesalers, and other parties collecting and remitting the fees are responsible for maintaining sufficient documentation for CBP to verify the accuracy of the fee collection and remittance. Such information must be made available for inspection upon CBP’s demand. Such documentation shall be maintained in the United States for a period of 5 years from the date of fee calculation. Each such affected party shall provide to CBP the name, address, and telephone number of a responsible officer who is able to verify any statements or records required to be filed or maintained under this section, and shall promptly notify CBP of any changes in the identifying information previously submitted. See 19 C.F.R. Part 163.4(a) (7)
If additional information is needed concerning the collection and remittance of U.S. Customs and Border Protection air/sea passenger user fees, please contact:
U.S. Customs and Border Protection
Office of Finance, Revenue Division
Debt Management Branch- User Fee Team
6650 Telecom Drive, Suite 100
Indianapolis, IN 46278
Phone: (317) 381-5400
Fax: (317) 715-9407