Duty drawback denotes a refund or remission, in whole or part of a Customs duty, revenue tax, or fee lawfully assessed or collected on imported merchandise, which is subsequently exported or destroyed in either an unused or manufactured state.

Authorized by the first Tariff Act of the United States in 1789 to encourage American commerce and manufacturing, it permits American firms to compete in foreign markets without having to include in its costs, and consequently in its sales price, the duty paid on imported goods. Since its inception, the conditions under which duty drawback is payable have changed.

The Miscellaneous Trade and Technical Corrections Act of 2004 (The Act) signed into law on December 3, 2004, as Public Law 108-429, made various changes to the drawback procedures. Changes are as follows:

• One year "deemed liquidated" provision. With some exceptions, Customs has one year from the entry date or one year from the effective date of The Act to liquidate a claim.
• Unused Merchandise Drawback allowed on Harbor Maintenance Tax (HMT) refundable. Can only be refunded at the time of liquidation and cannot be issued via accelerated payment. A claim for a refund of this tax must be submitted to Customs manually.
• Claims allowed on customer returns as rejected goods. If you sold goods to a retail customer and they return the goods to you, the importer, then you can export or destroy the goods under Customs supervision and claim drawback.
• Goods imported into US possessions eligible. Unused direct identification drawback shipped to insular possessions. (US Virgin Islands, American Samoa, Guam and several smaller South Pacific Islands)
• Packaging materials eligible for drawback. Regardless of whether the contents are eligible for drawback.