Going INTO Mexico
*Note* If you don't see a US flag in the corner to translate a government page, right-click and choose "translate to English". This info is presented with good intentions and was current at time of posting. However, laws change. Items that were previously acceptable may get confiscated. Updated 8/2020
Mexico Customs (Aduanas) allows $300 per person before they want you to pay import taxes. There is a long list of what consists of "what you may bring" without counting against your limit, and if you go over that you may owe tax. Basically they don't want you bringing multiples of items into Mexico to resell. Guns and ammunition are not allowed--just don't.
There are also regulations on what always will be taxed, and you are supposed to declare these items or you may also be fined in addition to the tax owed. Building materials, car parts, and extra fuel are among them. The extra 16% and time isn't worth it. Buy what you can locally.
*NOTE* Used clothing donations are NOT duty-free. Pack them in suitcases instead of Hefty Bags or boxes.
Alcohol/Tobacco quantities are regulated. These maximum per passenger limits over 18 years old aren't included in the $300: (source)
10 packs of cigarettes, 25 cigars or 200 grams of tobacco
3 liters of liquor or 9 beers (note: imported alcohol [vodka, gin, scotch, etc] is more expensive in Mexico. Tequila, Kahlua, many rums and Mexican beer are very inexpensive.)
6 liters of wine (There are many excellent Mexican wines, but if you prefer imported wines [Italian/French/Australian/US] you will pay more)
Returning to the US
The border agent will ask you if you have anything to declare. They are mostly asking about plants/fruits/vegetables and meat/eggs. Please click here to view rules for bringing regulated items back into the US.
The list of animal diseases (ie: mad cow disease, bird flu, swine flu) is long and changes regularly. Just don't bother.
Some vegetables are ok (avocados without pits, and some others), but again I don't bother. If they open your cooler and find one prohibited item (like a lime you forgot about), they will likely make you go to secondary inspection which will take more time at minimum. Officially, undeclared prohibited agriculture items can result in a fine.
Raw Fish/Shrimp are not regulated. You can bring a limit of 50lbs of seafood (more than 50 pounds are considered commercial shipments and must meet additional requirements through the USDA)
*1 liter of alcohol (3 beers) is allowed per adult (21+)*