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A "duty" is the customs tax paid to import something into a country. Unfortunately, the merchandise in those duty-free shops you see at the airport isn't free of that tax for the buyer. It's the shops that don't have to pay a duty to import their merchandise. Because the goods are sold at an airport, seaport, or border, and are only sold to people leaving the country, the goods aren't completely imported into the country. Thus, the seller doesn't have to pay a customs tax. Presumably, the seller will pass this savings along to the buyer, but there's no guarantee this happens. If you buy something at an airport duty-free store, your goods will be held until you are boarding the airplane. Near land borders, your purchases from
a duty-free shop will be sealed and inspected when you cross the border. These measures ensure that you don't use or keep the item in the country where you bought it. When you re-enter your home country, you may have to pay a duty on your purchases, regardless if you bought them at a duty-free store. The United States allows residents to return with up to $800 worth of goods purchased in other countries. This is called the personal exemption, and the specific amount can vary depending on which countries were visited. If you buy more than $800 of goods abroad, you'll have to pay a tax, even if you bought those things at duty-free shops. Also, many countries limit the
quantities of certain luxury goods you can bring into the country without being taxed. Liquor and cigarettes are often restricted, and you will be taxed if you bring more than the limit. The specifics of duty taxes and quantities vary between countries, so make sure to research the rules for your country and your destination. Even if you don't pay a duty, you may not save money at duty-free shopping. An Australian article found that a camera selling for $129 at many New York stores cost $30 to $50 more at duty-free airport shops. One British study looked at a bottle of liquor that cost £14.49 in a regular store. Without duties,
it should cost £4.74, but the duty-free shops charged £7.75 to £11.25. If you do plan to shop in a duty-free store, it pays to do some comparison shopping ahead of time.
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