Pleasure and Vacation Travel

10. Duty-Free Shops

Many travelers are confused by the term "duty-free" shops. Travelers often think that what they buy in duty-free shops won't be dutiable when they return home and clear Customs. But this is not true: Articles sold in a duty-free shop are free of duty and taxes only for the country in which that shop is located. So if your purchases exceed your personal exemption, items you bought in a duty-free shop, whether in the United States or abroad, will almost certainly be subject to duty.

Articles sold in foreign duty-free shops are subject to U.S. Customs duty and other restrictions (for example, only one liter of liquor is duty-free), but you may include these items in your personal exemption. Articles sold in duty-free shops are meant to be taken out of the country; they are not meant to be used, worn, eaten, drunk, etc., in the country where you purchased them. Articles purchased in American duty-free shops are also subject to U.S. Customs duty if you bring them into the United States. For example, if you buy liquor in a duty-free shop in New York before entering Canada and then bring it back into the United States, it may be subject to duty and Internal Revenue Service tax.