Duty drawback can return up to 99% of the duties you paid at the border — but “up to 99%” is a ceiling, not a promise. What you actually recover depends on how much duty you paid, how much of the goods leave the U.S., and which drawback rules apply. This guide shows exactly how the number is built, with worked examples.
Key takeaways
- The formula — Recoverable drawback = duties paid on qualifying goods × up to 99%.
- The base — Duty paid = entered (customs) value × duty rate (plus Section 301/232 tariffs).
- The 1% — CBP keeps ~1% to cover administrative costs.
- Partial exports — You only recover duty on the portion actually exported or destroyed.
- Substitution — Comparative-value rules can slightly lower the refund versus direct identification.
The basic formula
Every drawback calculation starts from the duty that was actually paid on the import:
Duty paid = Entered value × Duty rate (+ any Section 301 / 232 tariffs)
Recoverable drawback = Duty paid on exported/destroyed goods × up to 99%
The “entered value” is the customs value declared on your entry summary (CBP Form 7501) — usually the transaction price of the goods. The duty rate comes from the item’s HTS classification, plus any additional tariffs stacked on top.
Worked example 1: unused merchandise drawback
You import 10,000 units of a product:
- Entered value: $500,000
- Duty rate: 25% (base duty + Section 301)
- Duties paid: $500,000 × 25% = $125,000
Later, the goods don’t sell domestically and you export all 10,000 units in the same condition. Because the full quantity is exported:
- Recoverable drawback: $125,000 × 99% = $123,750
That’s the clean, best-case scenario — full export, direct identification, no excluded duties.
Worked example 2: partial export
Same import as above ($125,000 duties paid on 10,000 units). This time you export only 6,000 units and sell the rest in the U.S.
- Duty attributable to exported units: $125,000 × (6,000 / 10,000) = $75,000
- Recoverable drawback: $75,000 × 99% = $74,250
You recover duty only on what actually left the country. The 4,000 units that stayed in U.S. commerce keep their duties with CBP.
Worked example 3: manufacturing drawback
You import components, use them to build a finished product, and export the product:
- Imported components entered value: $800,000
- Duty rate: 15%
- Duties paid: $120,000
If 80% of the finished goods made from those components are exported:
- Recoverable drawback: $120,000 × 80% × 99% ≈ $95,040
Manufacturing claims tie the recovery to how much of the imported input ends up in exported product, documented through a bill of materials.
What counts in the base amount
Drawback isn’t limited to the base customs duty. The recoverable base can include:
- Base customs duties — the standard HTS duty rate.
- Section 301 and Section 232 tariffs — recoverable when export/destruction conditions are met.
- Merchandise Processing Fee (MPF) — recoverable on many claims, with limits on some substitution claims.
- Certain internal revenue taxes — for specific goods like distilled spirits.
Not recoverable: antidumping/countervailing (AD/CVD) duties and statutorily excluded merchandise. Excluding these is often the biggest reason a real refund lands below the theoretical 99%.
How substitution changes the math
With substitution, you match commercially interchangeable goods at the 8-digit HTS level instead of tracing exact units. The tradeoff: CBP applies comparative-value rules, so the recovery is generally based on the lesser of the duty on the imported goods or the duty that would apply to the substituted goods. For most importers the difference is small, but it means a substitution claim can recover slightly less than a direct-identification claim on the same goods.
Why the real number needs your entry data
The formulas above are the mechanics — but an accurate figure requires your actual import history: entry summaries, HTS codes, duty rates, and matched export or destruction records across the 5-year window. That reconciliation is where most of the work (and most of the missed money) lives.
Forge, an AI-native customs broker, ingests your import and export data, structures it automatically, and calculates your recoverable amount entry by entry — reviewed by a licensed broker before filing. It’s free to find out; success-based pricing means you only pay when the refund lands.
Related guides: What is duty drawback? · Do you qualify? · How to file a claim
This guide is general information, not legal or customs advice. Actual drawback amounts depend on your specific entries, classifications, and records. Talk to a licensed broker before filing.
Frequently asked questions
How is duty drawback calculated? +
Duty drawback is calculated as up to 99% of the duties, taxes, and fees originally paid on the imported goods that are later exported or destroyed. The base amount is the duty paid on the qualifying import entry (entered value multiplied by the duty rate), and CBP retains roughly 1% to cover administrative costs. For manufacturing and substitution claims, the recoverable amount is tied to the quantity of imported merchandise used in or matched to the exported goods.
What is the 99% rule in duty drawback? +
The 99% rule means CBP refunds up to 99% of the eligible duties, taxes, and fees paid on the import — the remaining 1% is retained to cover the government's administrative cost of processing the claim. So if you paid $100,000 in duties on goods that are fully exported, the maximum recoverable amount is about $99,000.
How do I calculate the duty paid on an import? +
Duty paid equals the entered (customs) value of the goods multiplied by the applicable duty rate for that HTS classification, plus any additional duties such as Section 301 or Section 232 tariffs. For example, $500,000 of entered value at a combined 25% rate equals $125,000 in duties paid — the base for a drawback calculation.
Does duty drawback include taxes and fees, or just duties? +
Drawback can cover duties, certain internal revenue taxes, and certain fees. The Merchandise Processing Fee (MPF) is recoverable on many claims, though there are limits on MPF recovery for some substitution claims. Antidumping and countervailing (AD/CVD) duties are generally not recoverable.
How is drawback calculated on a partial export? +
You only recover duty on the portion of the imported goods that is actually exported or destroyed. If you import 10,000 units and export 6,000, the drawback is based on the duty attributable to those 6,000 units — up to 99% of it. The rest stays with CBP because those goods remained in U.S. commerce.
How does substitution affect the drawback amount? +
Under substitution, you match commercially interchangeable goods at the 8-digit HTS level rather than tracing exact units. The recoverable amount is generally based on the lesser of the duty paid on the imported merchandise or the duty that would apply to the substituted merchandise, following CBP's comparative-value rules — which can slightly reduce the refund versus direct identification.
How much of my duties will I actually get back? +
In the best case — full export or destruction of duty-paid goods with clean records — you recover close to 99% of the duties paid. Real-world refunds are lower when only part of the inventory is exported, when substitution comparative-value limits apply, or when some duties (like AD/CVD) are excluded. A broker calculates the exact figure from your entry data.
