US Tax Refunds Delayed: CBP Portal Launches But 37% of Claims Face Uncertainty
British SMEs with transatlantic trade links have been warned they face a long and uncertain wait before refunding tariffs wrongfully collected by the United States, after Washington confirmed its long-awaited online refund portal will handle only a fraction of outstanding claims when it goes live next week.
US Customs and Border Protection (CBP) is expected to open its Integrated Administration and Entry Processing program, known as CAPE, on April 20. The first phase of the portal is expected to deal with around 63 percent of refund requests. The remaining 37 percent, however, were left without a temporary plan, raising new concerns for those with low incomes who have been out of pocket for two years.
John Havard, a consultant at the auditing, tax and business advisory firm Blick Rothenberg, said the backlog level is “surprising” and that the uncertainty surrounding the complex stages of the applications will do little to bolster small and medium-sized businesses that have been relying on a quick decision if the US Supreme Court withdraws under the International Economic Power Act (Economic PowerEE).
“Many of these remaining cases are considered final values because the goods involved will have been in the US for more than a year before a refund request is filed,” Havard said. “In such cases the application process will be greatly affected. We are unlikely to hear anything else until government officials appear at the International Trade Court to present their next progress report.”
The numbers involved are eye-catching. Blick Rothenberg estimates that around 53 million illegal tax collections were processed during the period in question, with a total of 166 billion (£132 billion) in potential refunds. More than 26,000 importers, collectively responsible for some $120 billion in IEEPA taxes, have registered with CBP to receive their payments electronically, following a White House directive requiring all federal payments to be made by electronic transfer.
The rules governing who can make a claim have been tightened. Only the official importer of record, or the US importer designated by that party, will have the authority to submit a refund request. Businesses must also have an active account with CBP’s Automated Commercial Environment before they can receive any money. Havard said there has been a “tremendous activity” in signing up new accounts since the High Court ruling, suggesting that many firms have been caught off guard by the decision.
For those who are still waiting, there is at least one letter of good news. In an earlier statement to the US trade court, a government official confirmed that interest would be paid on all refunds, offering little compensation for what amounted to a long delay before the checks arrived.
For British exporters and importers who are close to the US market, the practical advice is straightforward: make sure the ACE registration is correct, confirm which organization has the status of importing the record on historical shipments, and prepare for the administrative process pulled out. The foundations of the right to restitution are no longer in doubt; The refund mechanics, it seems, are too many.
