Senate Introduces Bill to Eliminate First Sale Valuation: What Importers Should Know
On February 11, 2026, the U.S. Senate introduced the “Last Sale Valuation Act,” bipartisan legislation that would redefine the term “sale for export” under U.S. customs law. If enacted, the bill would limit “sale for export” to the sale to the U.S. importer, effectively eliminating the First Sale valuation method.
Background: The Legal Foundation of First Sale
The First Sale doctrine stems from the 1992 Federal Circuit decision in Nissho Iwai American Corp. v. United States. The court held that, under certain conditions, the relevant “sale for export” does not have to be the sale to the U.S. importer. Instead, it may be an earlier sale in the supply chain. Because upstream transactions typically exclude later markups, using First Sale often results in a lower declared customs value and reduced duty liability.
Why This Legislative Development Matters
First Sale has long been subject to heightened scrutiny by U.S. Customs and Border Protection (CBP). However, the introduction of legislation aimed at eliminating it signals growing congressional interest in customs valuation reform.
Recent legislative efforts have also targeted perceived trade “loopholes,” including reforms to de minimis exemptions and enhanced customs enforcement measures.
Potential Impact on Importers
If enacted, the elimination of First Sale could:
Increase declared customs value
Raise overall duty exposure
Affect landed cost modeling
Require reassessment of transfer pricing structures
Prompt restructuring of multinational supply chains
Even if the bill does not pass immediately, its introduction alone warrants proactive evaluation.
What Companies Should Do Now
Importers currently using or considering First Sale valuation method should:
Quantify potential duty exposure under a last-sale model
Review valuation documentation and compliance controls
Model financial impact on cost structures
Evaluate contingency strategies
The key question is not simply whether the bill will pass, but whether your company understands its potential exposure.
If you would like to assess how this proposed legislation may affect your customs valuation strategy, please contact YLK Trade Law.
