Two members of the Senate Finance Committee have introduced the Last Sale Valuation Act, legislation that would eliminate the practice of using first sale, which is used by some importers to reduce duty exposure. Senators Bill Cassidy and Sheldon Whitehouse said the bill would require duties to be calculated based on the last sale price before goods enter the United States, rather than an earlier manufacturer-to-middleman transaction.
Trade professionals pushed back, noting that first sale is a lawful valuation method established by the U.S. Court of Appeals for the Federal Circuit in 1988 and is not a loophole. Companies using first sale face extensive documentation requirements and are often highly compliant. An U.S. International Trade Commission report from 2008 found that first sale was used less than 3% of the time in late 2008 and the first three quarters of 2009, representing about 2.4% of total import value. However, as tariff rates have increased, in many cases significantly above most-favored-nation rates, interest in first sale has grown, with some companies realizing substantial duty savings.
Critics of the bill argue that eliminating first sale would not necessarily prevent other lawful duty-reduction strategies and that the program tends to make economic sense primarily for higher-volume importers, while others find that the compliance costs may outweigh potential savings. While some suggest the bill could simplify oversight by U.S. CBP, industry experts note that the burden of proving first sale eligibility already rests largely with importers.
At this time, the legislation remains in the early stages of the congressional process. It has been introduced but has not advanced further, and there are multiple procedural steps required before it could become law. As such, it is too early to assume the bill will pass in its current form or at all. While companies may wish to remain informed and begin evaluating potential impacts as part of future planning, there are no immediate changes to current valuation rules. We will continue to monitor developments and provide updates as they become available.