US “First Sale” Rule Eligibility Checker

Answer the questions below to self-assess whether your multi-tiered import (factory → middleman → US importer) can use the earlier (first) sale price as customs transaction value under the Nissho Iwai three-prong test, and estimate the duty you could save by declaring it — under 19 CFR 152.103 / 19 U.S.C. 1401a.

Rules verified against 19 CFR 152.103 (Cornell LII), CBP's “Bona Fide Sales” informed-compliance guidance and the Nissho Iwai line of CROSS rulings. Customs value is normally the price actually paid or payable for the merchandise when sold for exportation to the United States (19 CFR 152.103(b)(1)). In a multi-tiered transaction, First Sale lets the importer declare the earlier manufacturer→middleman price instead — if it can show, per Nissho Iwai (Fed. Cir. 1992), that the first sale was (1) a bona fide sale, (2) clearly destined for export to the US, and (3) at arm's length. CBP places the burden on the importer and requires a complete paper trail of the entire transaction (T.D. 96-87).

1. Is this a multi-tiered sale (factory → middleman → US importer)?
2. Bona fide sale at the first tier

Title and risk of loss passed to the middleman, real consideration was paid for THIS shipment, and there is an invoice — a general inter-company transfer that cannot be linked to the import is not enough.

3. Clearly destined for US export at the first sale

Purchase orders, product specs, US-market markings, or shipping documents showing the goods were headed to the United States when the middleman bought or contracted to buy them.

4. Arm's length (or related-party circumstances-of-sale support the price)

Unrelated parties dealing at a market price, OR — if related — a circumstances-of-sale analysis showing the relationship did not influence the price (19 CFR 152.103(l)(1)); a transaction value is not disregarded solely because the parties are related.

The earlier price you would declare.

The price CBP presumes by default.

Your HTSUS line's duty rate.

Self-assessment

Appears eligible — all three Nissho Iwai prongs are met, so the first-sale price may be declarable as transaction value. This is subject to CBP substantiation of the complete paper trail; it is not a guarantee.

Three-prong status
All 3 prongs met
Dutiable spread (last − first)
$50,000.00
Estimated duty saved
$3,250.00
Duty rate
6.5%

Documentation CBP requires

First Sale is the importer's burden: CBP requires a complete paper trail of the imported merchandise showing the structure of the entire transaction (T.D. 96-87), declared on entry via the CBP First Sale Declaration program.

Governing law: 19 CFR 152.103(b)(1), 19 U.S.C. 1401a(b), Nissho Iwai (Fed. Cir. 1992). General guidance, not legal or customs advice — eligibility is CBP's to determine.

Get the First Sale Substantiation Pack

The self-assessment above is free. The pack turns it into something you can hand to your customs broker — the paper trail CBP expects, the evidence map for each prong, the related-party memo, and the declaration steps, in one place.

One-time purchase. No subscription. The free checker stays free.

Last verified:

How this calculator works

This checker encodes the First Sale doctrine as a rule engine, computed entirely in your browser — no inputs are sent to a server. The three-prong test (bona fide sale; clearly destined for export to the US; arm's length) is from Nissho Iwai American Corp. v. United States, 982 F.2d 505 (Fed. Cir. 1992), as CBP applies it under 19 CFR 152.103 and 19 U.S.C. 1401a; the related-party path follows 19 CFR 152.103(j)(2)(i) and (l)(1); the complete-paper-trail requirement is T.D. 96-87. The savings estimate is duty rate × (last-sale price − first-sale price), clamped to zero. It is a self-assessment, not a guarantee of CBP acceptance. Rules verified 2026-06-15 against the Cornell LII mirror of 19 CFR 152.103 and CBP guidance.

What the “First Sale” rule is

When goods reach the United States through a chain — a foreign manufacturer sells to a middleman (a trading company or vendor), who then sells to the US importer — CBP normally appraises the goods on the last price, the one the importer pays. The First Sale rule lets the importer instead declare the earlier, usually lower, manufacturer→middleman price as the customs transaction value, which lowers the dutiable amount. It is not a separate statute: it is the Federal Circuit's reading of “sold for exportation to the United States” in Nissho Iwai American Corp. v. United States, 982 F.2d 505 (Fed. Cir. 1992), applied by CBP under 19 CFR 152.103 and 19 U.S.C. 1401a. The trade-off is documentation: you take on the burden of proving the first sale qualifies, and CBP can ask for the whole paper trail.

The three prongs you must satisfy

CBP presumes the importer's price is the transaction value. To use the first sale instead, Nissho Iwai requires the importer to rebut that presumption by showing all three of the following about the manufacturer→middleman sale:

  • 1. A bona fide sale. Title and risk of loss passed to the middleman, real consideration was paid for that specific shipment, and there is an invoice. A general inter-company money transfer that cannot be tied to the import does not count.
  • 2. Clearly destined for export to the US. At the time the middleman bought (or contracted to buy), the goods were already headed for the United States — shown by purchase orders, product specifications, US-market markings or shipping documents.
  • 3. Arm's length. The manufacturer and middleman dealt at a market price, “in the absence of any non-market influences that affect the legitimacy of the sales price.” If the parties are related, see the next section.

If any prong is unproven, the checker tells you which one needs evidence rather than guessing CBP's answer for you.

Related parties — not an automatic disqualifier

A first sale between a manufacturer and a middleman that are related (common ownership, parent/subsidiary) is not automatically rejected. Under 19 CFR 152.103(j)(2)(i) a transaction value between a related buyer and seller is “acceptable if an examination of the circumstances of sale indicates that their relationship did not influence the price actually paid or payable.” And under 19 CFR 152.103(l)(1) CBP “shall not disregard a transaction value solely because the buyer and seller are related.” So a related first sale can still qualify — you answer the arm's-length prong “yes” only when the circumstances of sale support the price (or it closely approximates a test value), and you keep the analysis on file.

How much duty does First Sale save?

The saving is the duty rate applied to the spread between the two prices: duty rate × (last-sale price − first-sale price). If the first sale is $100,000, the last sale is $150,000 and the duty rate is 6.5%, declaring the first sale lowers the dutiable value by $50,000 and saves $3,250 in duty on that entry. The checker clamps the saving to zero when the last price is not higher than the first — First Sale only helps when the earlier price is lower. The estimate is the duty at stake, not a promise CBP will accept the claim.

The documentation CBP expects

First Sale is the importer's burden. CBP's guidance on multi-tiered transactions (T.D. 96-87) requires a complete paper trail of the imported merchandise showing the structure of the entire transaction — both invoices, proof of payment tied to the specific shipment, purchase orders and specs showing US destination, and (for related parties) the circumstances-of-sale analysis. The claim is made on entry through the CBP First Sale Declaration program. Without the paper trail, CBP falls back to the last price.

Frequently asked questions

Can I use First Sale if I buy directly from the factory?

No. First Sale needs a multi-tiered transaction — an earlier manufacturer→middleman sale before the sale to you. With a single direct sale there is no earlier price to declare, and the price you pay is the transaction value.

Does this tool guarantee CBP will accept my First Sale claim?

No. It is a self-assessment of the three Nissho Iwai prongs plus an estimate of the duty at stake. Eligibility, the dutiable value and the documentation are determined by CBP case by case. Treat an “appears eligible” result as a prompt to assemble the paper trail and consult a licensed customs broker, not as approval.

We are related to the middleman — are we disqualified?

Not automatically. CBP will not disregard the transaction value solely because the parties are related (19 CFR 152.103(l)(1)); the price is acceptable if the circumstances of sale show the relationship did not influence it (152.103(j)(2)(i)). You would keep a circumstances-of-sale analysis to support the arm's-length prong.

Is anything I enter into the checker sent to a server?

No. The self-assessment and the savings estimate are computed entirely in your browser from the rules described above. Nothing you enter leaves your device.

Sources

  • 19 CFR 152.103 — transaction value: the price actually paid or payable when sold for exportation to the US ((b)(1)); related-party circumstances-of-sale rule ((j)(2)(i)) and the not-disregarded-solely-because-related rule ((l)(1)). Verified via the Cornell LII mirror (ecfr.gov direct fetch was blocked).
  • 19 U.S.C. 1401a(b) — the transaction-value statute the regulation implements.
  • Nissho Iwai American Corp. v. United States, 982 F.2d 505 (Fed. Cir. 1992) — the three-prong “first sale” test (bona fide sale; clearly destined for export to the US; arm's length, absent non-market influences). Confirmed via CBP's informed-compliance guidance and CROSS rulings (the case PDF was not machine-readable here).
  • CBP — Bona Fide Sales & Sales for Exportation to the United States (informed compliance) — how CBP applies the prongs. The PDF returned HTTP 403 on direct fetch; its substance was confirmed via CBP's search results and the CROSS rulings below.
  • CBP — First Sale Declaration program, and T.D. 96-87 (Determining Transaction Value in Multi-tiered Transactions, 1997) — the importer's burden and the complete-paper-trail requirement. CROSS rulings H005222 and 548520 apply Nissho Iwai.

General guidance, not legal or customs advice. First Sale is a fact-specific judicial doctrine — eligibility, the dutiable value and the required documentation are determined by CBP under 19 U.S.C. 1401a / 19 CFR 152.103 and the Nissho Iwai line of cases. Substantiate the complete paper trail and consult a licensed customs broker or trade attorney before declaring First Sale.