Proposed Last Sale Tariff Valuation

Key Takeaways

• The Last Sale Valuation Act (LSVA) aims to “level the playing field” and combat trade-based money laundering but currently has no scheduled congressional consideration and faces likely industry opposition.
• The bill would eliminate the “first sale” principle and require import duties to be calculated on the price paid in the final sale to the U.S. buyer.
• If enacted, the LSVA would raise dutiable values for multitier supply chains, potentially increasing duty costs that importers have reduced by relying on first sale treatment.

Overview

On February 11, 2026, U.S. Senators Bill Cassidy (R-LA) and Sheldon Whitehouse (D-RI) introduced the Last Sale Valuation Act, proposed legislation that would amend the Tariff Act of 1930[1] to require that import duties be calculated based on the goods’ last sale value before exportation to the United States. If this bill is signed into law, importers could no longer use the first sale principle, which allows duties to be calculated based on the transaction price of the first sale of the goods “for exportation to the United States”—a price that could be substantially lower than the price paid by the U.S. buyer. According to the senators’ announcement, the LSVA’s purpose is to “level the playing field for small and domestic businesses and combat trade-based money laundering."[2] The bill is currently supported by, among others, the National Council of Textile Organizations.

The proposed legislation must pass both chambers of Congress before being presented to the president for signature. There are currently no announced plans for congressional consideration of the bill.

Current ‘First Sale’ Principle

Section 402 of the Tariff Act of 1930 establishes the transaction value for the purpose of determining dutiable value as the price paid or payable for merchandise “when sold for exportation to the United States.” The statute does not, however, expressly define the phrase “when sold for exportation to the United States.” This statutory silence left open which sale in a multisale supply chain governs the determination of dutiable value. While U.S. Customs and Border Protection (CBP) long took the view that the relevant transaction was the last sale before importation, the U.S. Court of Appeals for the Federal Circuit disagreed and held in Nissho Iwai American Corp. v. United States that, under appropriate circumstances, the relevant sale may be an earlier, arm’s-length sale occurring further up the supply chain.[3] The resulting “first sale” principle permits importers in a multitiered supply chain to calculate duties based on the price paid by an intermediary to the manufacturer rather than the higher resale price charged to the U.S. importer. 

To base customs value on such a “first sale,” CBP requires importers to demonstrate, with documentary evidence, a clear intent at the time of the first sale that the goods be destined for the United States, which importers may show through shipping instructions, markings, contracts, etc.

First sale treatment can result in significant savings, since earlier transactions generally exclude additional supply chain costs and intermediary markups. Applying the value of the first sale typically results in a lower declared customs value and, consequently, reduced import duties. 

‘Last Sale’ Valuation History and Impact

The LSVA is not a new concept. In 2008, CBP solicited public comment on a proposed interpretation of the phrase “sold for exportation to the United States” as the last sale occurring prior to the goods’ introduction into the United States, which would have had the same effect as the current LSVA proposal. Due to industry pushback, Congress instead required the U.S. International Trade Commission to gather statistics and report on the impact of the first sale principle. The resulting December 2009 report provided that, between September 2008 and August 2009, only 8.5% of importers invoked the first sale principle for only 2.4% of U.S. imports by value. Based on this limited impact and industry pushback, CBP ultimately withdrew its “last sale” proposal in 2010.

Although CBP has not published more recent statistics, there is significant anecdotal evidence that reliance on the first sale principle surged following the implementation of new tariff measures in the first Trump administration (especially on Chinese goods) and has grown even quicker in response to dramatically increased tariffs on nearly all U.S. imports since 2025. The LSVA appears to be a response to increased use of the first sale principle.

The LSVA would replace the first sale principle with a mandatory “last sale” methodology for customs valuation. The legislation would expressly define “sale for export” as the “last sale that introduces the merchandise into the United States.” This would require that duties be assessed based on the price paid or payable by the U.S. buyer. 

It is too early to predict whether the LSVA will become law. Although the proposed law’s duty-raising impact will likely appeal to the current administration, it faces significant opposition from industry and would need to pass a deeply divided Congress. Nevertheless, U.S. importers and foreign exporters that may be considering costly supply chain reorganizations in hopes of securing U.S. import duty savings through application of the first sale principle should watch the progress of the LSVA closely.

Endnotes

[1] 19 U.S.C. 1401a

[2] “Whitehouse, Cassidy Introduce Bipartisan Bill to Close ‘First Sale’ Customs Loophole” (Feb. 11, 2026) 

[3] Nissho Iwai American Corp. v. United States, 16 C.I.T. 86, 786 F. Supp. 1002, reversed in part, 982 F. 2d 505, 509 (Fed. Cir. 1992).