The U.S. Supreme Court’s recent decision to strike down certain tariffs imposed under the International Emergency Economic Powers Act (IEEPA) has created an opportunity for many small businesses to seek refunds. However, navigating the refund process can be complex. Here’s what small businesses need to know. For more detailed information, visit the Chamber’s Guide on Tariff Refunds, here.
[To learn more about the Supreme Court decision and what tariffs are impacted, watch our Small Business Tariff Update.]
What’s Happening with Refunds?
Following the Supreme Court’s February 20 decision, the U.S. Court of International Trade (CIT) ordered immediate action on refunds. On March 6, Customs and Border Protection (CBP) proposed a streamlined refund system, expected to launch by April 20.
Who Qualifies for Refunds?
Refunds are available to U.S. importers of record or consignees who directly paid IEEPA tariffs. These include tariffs commonly referred to as “fentanyl,” “trafficking,” “reciprocal,” or “baseline” tariffs, as well as some tariffs on goods from Brazil and India. Refunds do not apply to Section 232, Section 301, or other tariffs. Note: To determine the legal authority under which tariffs you have paid were applied, consult your customs broker, counsel, or government sources.
How Will Refunds Work?
As of now, it is expected that the 300,000 businesses that qualify for refunds will have access to a claim portal for submitting refund requests. If businesses qualify for payments and interest, payments will be processed electronically.
To receive refunds, businesses must enroll in CBP’s Automated Clearinghouse (ACH) Refund system, ensuring direct deposit of funds.
What About Interest?
Refunds will include interest, accruing from the date duties were deposited until the refund is issued. With interest rates currently at 6%, approximately $650 million accrues monthly, incentivizing swift action.
Protect Your Business
Be sure to work only with reputable customs brokers to avoid scams. Brokers can help organize submissions and ensure compliance with the new system. Additionally, consult tax professionals to understand how refunds may impact your federal income taxes.
The U.S. Chamber of Commerce is closely monitoring developments and advocating for a simple, efficient refund process. Stay informed and take proactive steps to prepare for refunds. For more resources, visit the Chamber’s Guide on Tariff Refunds, here.
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