With importers eligible for more than $150 billion in refunds after the U.S. Supreme Court struck down many of President Trump’s tariffs last month, businesses are asking when and how they get their money.
The good news is lawsuits may not be necessary. U.S. customs officials hope to have a system to deliver refunds up and running within 45 days.
But there will still be a great deal of work associated with receiving a refund. Harris Beach Murtha will assist businesses with getting everything in order, so the refund requests can be filed as soon as the system is up and running.
Businesses are Being Aggressive with Refunds
This is understandably a hot topic. Experts are predicting the government may owe up to $182 billion in tariff refunds to more than 330,000 businesses. More than 2,000 of those businesses, from multinational companies to smaller companies, have filed lawsuits at the U.S. Court of International Trade in Manhattan seeking refunds.
The government, seeking to avoid bogging down the refund process with lawsuits, is working on a quick, low-cost solution. U.S. Customs and Border Protection officials expect to use the same electronic portal it currently uses to track or correct their customs filings, but they informed the U.S. Court of International Trade its system is not yet equipped to process a massive amount of refunds. However, they hope to have it up and running within 45 days.
Following the Supreme Court decision striking down the tariffs imposed under the International Emergency Economic Powers Act (IEEPA), the federal government did petition an appeals court to pause the refund process for 90 days. That request was denied. It is important to note that, as the lawsuit over the tariffs progressed through the courts, the federal government continued to collect the tariffs because officials agreed to returning the money with interest if they were ultimately ruled illegal.
Judge Richard Eaton of the U.S. Court of International Trade must approve a refund process before it proceeds. The U.S. Court of International Trade has exclusive jurisdiction over cases involving tariff and trade matters.
What to Expect When Seeking a Tariff Refund
Further guidance concerning the refund process is expected to evolve over the coming days and weeks. Many are hopeful lawsuits won’t be necessary.
While all importers of record are due refunds and the government hopes to implement an efficient process, it will still require work. Most of those seeking refunds have not even signed up to the Citizenship and Border Protection system, according to Brandon Lord, executive director of the agency’s trade policy and programs directorate. He estimates only about 21,000 of the 350,000 importers have completed the setup process.
From there, importers will need to confirm their eligibility with a series of steps, ensuring they were subject to the specific tariffs ruled unlawful. Then, they’ll need to gather the required information, such as proof of payment, prepare duty refund calculations, including interest rates, and complete the refund-request process.
Despite the federal government’s suggestion it would implement an efficient process, it makes sense for most businesses to engage legal counsel to help with the filing, as well as to determine if a lawsuit in the Court of International Trade is necessary for your specific case.
Harris Beach Murtha’s International Trade Practice Group has a great deal of experience in this area. If you need assistance, please reach out attorney Ross B. Hofherr at (212) 313-5482 and rhofherr@harrisbeachmurtha.com, or the Harris Beach attorney with whom you most frequently work.
This alert is not a substitute for advice of counsel on specific legal issues.
Harris Beach Murtha’s lawyers and consultants practice from offices throughout Connecticut in Bantam, Hartford, New Haven and Stamford; New York State in Albany, Binghamton, Buffalo, Ithaca, New York City, Niagara Falls, Rochester, Saratoga Springs, Syracuse, Long Island and White Plains; as well as in Boston, Massachusetts, and Newark, New Jersey.