Following the Supreme Court’s February decision declaring the tariffs imposed under the International Emergency Economic Powers Act (IEEPA) to be illegal, approximately $166 billion is owed to U.S. importers who paid tariffs. Certain manufacturers now have the opportunity to recover tariff payments plus interest. We recommend meeting with your RBT accountant to assess your eligibility and the potential tax and accounting implications associated with tariff refunds.
Eligibility and the Refund Process
Refund claims can be submitted to U.S. Customs and Border Protection (CBP) via the Consolidated Administration and Processing of Entries (CAPE) system, located within the ACE (Automated Commercial Environment) Portal. Phase 1 of the CAPE process launched on April 20th. Phase 1 is limited to certain unliquidated entries and certain entries within 80 days of liquidation.
Who qualifies for refunds?
U.S. importers of record who directly paid the tariffs or the person who takes ownership of the goods once they have cleared customs (the “consignee”) may be eligible for a refund (U.S. Chamber of Commerce). Refunds are only available for tariffs applied under IEEPA. Businesses that did not directly pay the tariffs are not eligible.
Next Steps
If you haven’t already, determine whether you are eligible for tariff refunds. Your RBT accountant can help you verify your eligibility if you are unsure.
If submitting a claim, you will need to:
- Verify ACE Portal access (new ACE account setup may take up to 4 weeks).
- Enroll in Automated Clearinghouse (ACH) Refund.
- Compile a list of entries on which IEEPA duties were paid.
- Gather supporting documentation (i.e., entry summaries, proof of payment, commercial invoices, certificates of origin).
- Submit CAPE Declarations using a .CSV (Comma-Separated Values) file through the ACE Portal.
Refunds are expected to be issued within 60 to 90 days following acceptance of the CAPE Declaration, unless a compliance concern necessitates further review. Refunds will be paid electronically via Automated Clearing House (ACH).
Important to Note:
- When submitting your claim, be sure your documentation is complete and accurate to avoid delays or denials.
- Once a CAPE Declaration has been filed and accepted, it cannot be amended.
- Be wary of scams, as fraudsters may attempt to capitalize on the confusion surrounding tariff refunds.
- The timing of refunds may impact cash flow and financial reporting.
Helpful Resources:
The U.S. Customs and Border Protection website offers information, training guides, and answers to frequently asked questions. The U.S Chamber of Commerce also provides a step-by-step guide for importers regarding the refund process.
How RBT Can Help
RBT CPAs’ manufacturing accounting team is available to assess your eligibility for refunds and help you navigate any resulting tax and accounting-related impacts—including how refunds may affect your federal income taxes, cash flow, and/or financial reporting. Give us a call today and find out how we can be Remarkably Better Together.