Yep. You need to complete the US Customs Watch Worksheet. Taxes are calculated at different rates for the dial/movement, case, and band. So you need to break down the value of the watch into those three components on the Worksheet.
I have found.it best to complete this and provide to the seller to include with the shipping/waybill documentation.
Working from memory, I think it's roughly a flat $5 for the dial, 4% for the case, and 5% for the band. Do a search and you should be able to find the precise amounts.
You do not need to calculate it, just need to break down the value.
You have been very helpful. Thanks! One last question, So is the stated value on the invoice the total value of all the components listed on the work sheet or is it the purchase price? If it is the purchase price then do all the component values have to add up to the purchase price?
The invoice amount should equal the purchase price, right? Unless you are including shipping or other fees in the invoice total. In short, the component values should add up to the total value of the watch, which should equal the price paid on the invoice, and match insurance value (if insuring). Any inconsistencies can be cause for Customs delays. Some people may claim a lower value to reduce their import tax, but that is cheating (tax evasion) to me, and it may be a red flag for Customs to stop the shipment.
Most of a watch's value is in the dial/movement/hands, not the case (assuming stainless-steel or chrome-plated case).
I have imported a few watches to the US. There is a fixed price for the movement -- depending upon the number of jewels -- up to a maximum of about US$10. So on your Watch Worksheet (which can be downloaded from the US government site) you want to assign the highest possible value to the movement. For steel watches, you can obviously justify a greater proportion of value for the movement. From memory the case is assessed at 4.2% rate and the band at a 2% rate. Be certain not to import a watch with an alligator/croc band or it can be confiscated by the authorities. The regulations covering imports of watches is HTS 9102.21.90.10. You can Google "HTS 9102.21.90.10" for more detailed info.
One other thing -- DHL is better than FedEx for importing. I have used both and both have specialty watch departments to deal with all the finer points of importing watches into the US. However FedEx took about 2 weeks to clear customs because they are substantially backed up. DHL (at least in Feb) was taking only a 2-3 days for their shipments to clear US Customs. And if you ship via FedEx do NOT use their Economy service. You will be prioritised in their Customs department at the bottom of the queue.