MPF, HMF, and IRT: the fees you can recover beyond the duty

A drawback estimate should not stop at ordinary customs duty. If the import entry included recoverable Merchandise Processing Fee (MPF), Harbor Maintenance Fee (HMF), or an Internal Revenue Tax (IRT), those amounts can increase the claim base before the 99% drawback factor is applied.

The key is not whether the charge looks like a tariff. The key is whether it was a duty, tax, or fee imposed under federal law upon entry or importation and is allowable under the drawback regulations. 19 CFR § 190.3 expressly includes internal revenue taxes that attach upon importation, merchandise processing fees under 19 CFR § 24.23, and harbor maintenance taxes under 19 CFR § 24.24.

Why the 99% factor applies to fees and taxes

Modernized drawback uses “duties, taxes, and fees” as the recovery base. For unused merchandise claims and many manufacturing claims, 19 USC § 1313(l)(2) directs the regulations to provide a refund equal to 99% of the covered duties, taxes, and fees, subject to substitution limits and special rules.

CBP’s claim-completion rule follows the same structure. 19 CFR § 190.51(b) says the amount requested on the drawback entry is generally 99% of the eligible duties, taxes, and fees. It also gives a specific apportionment method for MPF and a general calculation rule for other allowable duties, taxes, and fees.

MPF: recover the fee that was paid on the formal entry

For most formal entries, MPF is an ad valorem fee. 19 CFR § 24.23(b)(1)(i)(A) sets the formal-entry MPF rate at 0.3464% of the value of the merchandise as determined under 19 USC § 1401a. The fee is paid by the importer of record when the entry summary is presented.

The rate is not the whole calculation. MPF is subject to a minimum and maximum. CBP’s FY 2026 Federal Register notice states that, effective October 1, 2025, the formal-entry MPF minimum is $33.58 and the maximum is $651.50; the ad valorem rate remains 0.3464%. A manual formal entry surcharge of $4.03 may also apply if the entry is filed manually.

MPF example

Assume a formal entry has $200,000 in entered value subject to MPF, and the claimant designates all of that merchandise for an eligible drawback claim.

• Line 1: $200,000 × 0.003464 = $692.80
• Line 2: Apply FY 2026 maximum: MPF paid = $651.50
• Line 3: $651.50 × 0.99 = $644.985
• Line 4: Estimated MPF drawback = $644.99

If only some entry lines are claimed, MPF is not usually taken as one lump sum. 19 CFR § 190.51(b)(2) requires the claimant to apportion MPF by relative value ratio to the imported merchandise for which drawback is claimed, then apply the 99% factor.

HMF: recover the harbor fee on imported ocean cargo

HMF applies to commercial cargo loaded on or unloaded from a commercial vessel at a covered U.S. port, unless an exemption or special rule applies. 19 CFR § 24.24(a) sets the rate at 0.125% (0.00125) of value.

For imported cargo, the importer is liable when the cargo is unloaded from the commercial vessel and is destined for consumption, warehousing, or foreign-trade-zone admission. 19 CFR § 24.24(e)(2) provides that the fee is based on the CBP appraised value of the shipment under 19 USC § 1401a, the same valuation basis used for duty.

HMF example

Assume an ocean import entry includes $250,000 in CBP appraised value subject to HMF, and the corresponding imported merchandise is fully designated for drawback.

• Line 1: $250,000 × 0.00125 = $312.50
• Line 2: HMF paid = $312.50
• Line 3: $312.50 × 0.99 = $309.375
• Line 4: Estimated HMF drawback = $309.38

HMF can be easy to miss because it is not a tariff rate and applies only in the vessel/covered-port context. But where it was paid on the import entry and the merchandise is otherwise drawback-eligible, it is part of the recoverable tax-and-fee base under 19 CFR § 190.3(a)(5).

IRT: recover import-attached excise tax when the product carries it

IRT is not one universal charge. It is the internal revenue excise tax that attaches to certain goods upon importation. Common product families include alcohol, tobacco, and certain fuels or petroleum products, but the controlling rate and tax base depend on the product and the applicable Internal Revenue Code provision.

Examples include distilled spirits under 26 USC § 5001, wine under 26 USC § 5041, beer under 26 USC § 5051, and tobacco products under 26 USC § 5701. For drawback purposes, 19 CFR § 190.3(a)(3) makes internal revenue taxes that attach upon importation allowable, assuming the claim otherwise qualifies.

IRT example

Assume the import entry reports $13,500 of IRT paid on qualifying imported merchandise, and the claimed merchandise is fully designated for an eligible drawback claim.

• Line 1: IRT reported and paid = $13,500.00
• Line 2: Eligible IRT attributable to designated merchandise = $13,500.00
• Line 3: $13,500.00 × 0.99 = $13,365.00
• Line 4: Estimated IRT drawback = $13,365.00

If the claim covers only part of the import line, or if substitution limits apply, the IRT must be attributed to the claimed units using the applicable drawback calculation method. CBP’s general rule in 19 CFR § 190.51(b)(3) requires accurate calculation and apportionment of other allowable duties, taxes, and fees.

How to build the claim file

A clean drawback workpaper keeps each component separate. Start with the import entry line, not just the entry total. Identify the ordinary duty, MPF, HMF, and any IRT actually paid. Then determine the portion attributable to the designated merchandise or substituted merchandise. Finally, apply the 99% factor to the eligible amount.

• Keep MPF separate from duty. It may need relative-value apportionment across entry lines under 19 CFR § 190.51(b)(2).
• Keep HMF separate from MPF. HMF is calculated at 0.125% of the covered cargo value and only applies in the vessel/covered-port context.
• Keep IRT product-specific. Tie the amount to the entry summary and the applicable Title 26 provision, rather than using a generic “excise” bucket.
• Reconcile to ACE and entry records. The claimed amounts should match the paid amounts and the drawback statute, regulation, and accounting method used.

The practical point is simple: if your drawback calculation stops at base duty, it may be understating the refund. The supporting entry data should tell you whether MPF, HMF, or IRT was paid. The drawback rules tell you whether it can be claimed and how to allocate it.

This article is for general information and is not legal or tax advice. Drawback eligibility depends on your specific facts, and final refunds are determined by CBP at liquidation. Consult a licensed customs broker or attorney for your situation.