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April 2026, question 78
Valuation, Appraisement and Duty Assessment · Valuation
Luxury Resins, a Japanese producer of plastic materials, sold resin to Phone Cases Plus, an unrelated U.S. manufacturer, for $20,000. Later, Phone Cases Plus decides to pay a $2,000 royalty to Disney for the right to manufacture and sell Disney-branded phone cases. It makes these phone cases out of the resin purchased from Luxury Resins. What is the transaction value of the transaction between Luxury Resins and Phone Cases Plus?
- $18,000.00
- $20,000.00
- $22,000.00
- $2,000.00
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CBP's answer: B. B: $20,000.00
Royalties paid to third parties for use in the United States of copyrights and trademarks related to the imported merchandise are generally treated as selling expenses of the buyer and are not dutiable (152.103(f)). The $2,000 Disney royalty is therefore not added, and the transaction value stays at the $20,000 paid to Luxury Resins, so B is right.
Royalties or license fees paid to third parties for use, in the United States, of copyrights and trademarks related to the imported merchandise generally will be considered selling expenses of the buyer and not dutiable. 19 CFR 152.103(f)
Search for: Royalties or license fees paid to third parties
CBP's key cites: 19 CFR 152.103(f)
Question and key from CBP's April 2026 exam and answer key. The walk-through is ours; quotes are from the pinned editions in the reference viewer (HTSUS 2026 Basic, 19 CFR 2025 edition).