Tony Gulotta, principal and practice leader with the Ryan tax firm, explains last week’s ruling by the U.S. Court of International Trade (CIT) on the refunding of tariffs that were ruled illegal by the U.S. Supreme Court.
The CIT has ordered U.S. Customs and Border Protection to issue refunds to all importers of record for tariffs imposed by President Trump under the International Emergency Economic Powers Act (IEEPA). That ruling follows a 6-3 decision by the Supreme Court that that IEEPA-based tariffs are illegal.
The CIT ruling is unusually broad in scope, notes Gulotta, covering all IEEPA tariffs yet to be liquidated (the final tally of money owed by the importer of record) or still within 180 days of liquidation.
CBP responded late last week that it’s unable to comply immediately with the CIT order because it doesn’t have the mechanisms in place to process such a huge volume of refunds electronically. The agency suggested that it could begin doing so within about 45 days.
Importers should nevertheless respond quickly, Gulotta advises, by updating their banking information within CBP’s Automated Commercial Environment (ACE). That’s essential, he says, because the refunds will only be made electronically.
Importers who had their entries liquidated early, prior to the 180-day protest period specified by the CIT, must pursue a separate administrative or legal path to seek refunds, and have two years from the date of entry to do so, Gulotta says. But even those whose claims fall within the period must act quickly, to ensure that they have the right information and documentation in place to pursue their claims.
There are approximately 330,000 importers of record, but only around 21,000 have updated their information so far, Gulotta says. So if refunds were to be issued today, only about 6% of companies would receive them.
They need to get their act together. “The clock is ticking,” Gulotta says.