Answer first
Core rule
Add the five statutory categories only to the extent each is not already included in the price actually paid or payable and sufficient information exists: buyer packing, selling commissions, assists, qualifying royalties or license fees, and resale proceeds accruing to the seller.
Authority and lookup route
Locate the rule before returning to the facts. Links point to government or official publications.
Reference lookup task
Locate the five additions and identify the phrase that prevents double counting.
Route: In §152.103, begin at paragraph (b)(1), then follow the cross-references for assists, royalties, and proceeds.
Worked example
The buyer pays $80,000 for 10,000 units, supplies a $20,000 mold free of charge for the full production run, and pays a separately stated $2,000 buying commission. What amount is added for these two items?
- 1Classify the mold as a production assist supplied by the buyer.
- 2Allocate the $20,000 assist over the 10,000-unit production run: $2 per unit.
- 3Treat the separately identified buying commission as nondutiable, unlike a selling commission.
- 4Add $20,000 for the shipment if it contains the full production run; add $0 for the buying commission.
Conclusion: $20,000 is added; the separately identified buying commission is not.
Common traps
- Adding a buying commission as though it were a selling commission.
- Adding a cost that the invoice price already includes.
- Allocating an assist over the wrong production quantity.