Legislation Introduced to End First Sale

Feb. 11, 2026
By: Marvin E. McPherson

Importers have always experienced hostility to “First Sale” valuation from Customs. Historically this hostility made using this lawful mechanism to reduce reported Customs value difficult and sometimes risky to use. Now the hostility has spread to Congress, where Senators Bill Cassidy (R-LA) and Sheldon Whitehouse (D-RI) introduced bipartisan legislation “the Last Sale Valuation Act”, aimed at making first sale impossible under the law.

The Court of Appeals for the Federal Circuit in Nissho Iwai American Corp. v. United States, 982 F.2d 505 (Fed. Cir. 1992) established the rule of first sale as we know it today. In that decision the court found that the “sale for export” in the valuation statute need not be the sale to the importer. Instead, under certain circumstances it could be a sale between parties further up the supply chain. Since these sales values do not include markups from later sales, they are lower values than later sales. Depending on the markups and number of sales prior to the sale to the U.S. importer this can substantially lower the reported value.

The Last Sale Valuation Act would specifically define “sale for export” to be the sale to the U.S. importer. This change to the statute would effectively overturn Nissho Iwai and end First Sale programs.

This bill reflects growing congressional interest in customs valuation and enforcement reforms. Similar efforts in recent years have targeted other customs “loopholes” such as changes to the de minimis exemption for low-value imports.

Barnes, Richardson & Colburn attorneys are here to help your company navigate the changing landscape of lawful duty mitigation. We also have some useful potential alternatives to First Sale . . .