This was supposed to convince the colonists to purchase Company tea on which the Townshend duties were paid, thus implicitly agreeing to accept Parliament's right of taxation.

In the 1760s and earlier the East India Company had been required to sell its tea exclusively in London on which it paid a duty which averaged two shillings and six pence per pound.

Benjamin Franklin was one of several people who suggested things would be greatly improved if the Company was allowed to export its tea directly to the colonies without paying the taxes it was paying in London: "to export such tea to any of the British colonies or plantations in America, or to foreign parts, import duty of three pence a pound.

The Act, which received the royal assent on May 10, 1773, contained the following provisions: Proposals were made that the Townshend tax also is waived, but North opposed this idea, citing the fact that those revenues were used to pay the salaries of crown officials in the colonies.

The Company was granted a license by the North administration to ship tea to major American ports, including Charleston, Philadelphia, New York City, and Boston.

In Massachusetts, Governor Thomas Hutchinson was a part-owner of the business hired by the Company to receive tea shipped to Boston.

Merchants who had been acting as the middlemen in legally importing tea stood to lose their business, as did those whose illegal Dutch trade would be undercut by the Company's lowered prices.

Governor Hutchinson in Boston was determined to leave the ships in port, even though vigilant colonists refused to allow the tea to be landed.

Similar "Destruction of the Tea" (as it was called at the time) occurred in New York and other ports shortly thereafter, though Boston took the brunt of Imperial retaliation because it was the first "culprit".

Ships carrying the company’s tea arrived in Philadelphia and New York but chose to return to England without unloading rather than face angry mobs.