(WXYZ/AP) — Michigan businesses that had to pay tariffs that were struck down by the Supreme Court can begin requesting refunds.
In an email to Michigan businesses on Tuesday, the Michigan Department of Licensing and Regulatory Affairs said that U.S. Customs and Border Protection has launched a new portal for submitting tariff refund requests.
Watch below: Supreme Court tariff ruling creates uncertainty for Michigan businesses
In February, the Supreme Court ruled that the sweeping tariffs enacted by President Donald Trump were unconstitutional.
That meant American businesses are owed $166 billion in refunds, plus interest, according to CNN.
According to CPB, requesting refunds of the tariffs requires only the folliwing actions:
- Importers of Record (IORs) and authorized Customs brokers have an established ACE Secure Data Portal account (ACE Portal account)
- Refund recipients use the ACE Portal account to provide CBP with bank account information for refunds
- IORs and authorized Customs brokers submit CAPE Declarations in the ACE Portal
During the first phase, only entities that have made certain tariffs will be able to make refund requests. You can learn more from CBP here.
See more from the Associated Press below.
Not all taxed imports immediately eligible
Customs and Border Protection said in court filings that over 330,000 importers paid a total of about $166 billion on over 53 million shipments.
Not all of those orders qualify for the first phase of the refund system's rollout, which is limited to cases in which tariffs were estimated but not finalized or within 80 days of a final accounting.
To receive refunds, importers have to register for the CPB's electronic payment system. As of April 14, 56,497 importers had completed registration and were eligible for refunds totaling $127 billion, including interest, the agency said.
System requires accuracy
Meghann Supino, a partner at Ice Miller, said the law firm has advised clients to carefully list in their declarations all of the document numbers for forms that went to CBP to describe imported goods and their value.
“If there is an entry on that file that does not qualify, it may cause the entire entry to be rejected or that line item might be rejected by Customs,” she said.
Supino thinks the portal going live will require composure as well as diligence.
“Like any electronic online program that goes live with a lot of interest, I would expect that there might be some hiccups with the program on Monday,” she said. “So we continue to ask everyone to be patient, because we think that patience will pay off.”
Nghi Huynh, the partner-in-charge of transfer pricing at accounting and consulting firm Armanino, said most companies claiming refunds will have imported a mix of items, and not all will qualify right away.
“It’s about having a clear process in place and keeping track of what’s been submitted and what’s been paid, so nothing falls through the cracks,” she said. “Each file can include thousands of entries, but accuracy is critical, as submissions can be rejected if formatting or data is incorrect.”
Patience with the process
Small businesses have eagerly awaited the chance to apply for refunds. Rebecca Melsky, co-owner of the clothing brand and online store Princess Awesome, said she was unable to register for a portal account Monday despite trying to submit her CPB import code and company information using two different web browsers.
She said Princess Awesome would file for a refund eventually. The company imports some of its clothes from factories in Bangladesh, China, India and Peru. Melsky estimated it paid $32,000 in IEEPA tariffs.
“My expectations have been pretty low about whether we were actually going to see any money back to us,” she said. “I’m heartened by the fact that there’s any system at all, but I’m only slightly more optimistic than I was last week, which was not very."
Justin Angotti, an associate attorney in the international trade practice of global law firm Reed Smith, said his clients ultimately had their declarations accepted Monday, even if it might have taken a few attempts.
“So far, Customs has been very responsive in trying to troubleshoot the issue,” Angotti said.
Will consumers see refunds?
Tariffs are paid by importers, and some companies pass on the tax costs to consumers via higher prices.
The system starting up Monday will refund tariffs directly to the businesses that paid them, which are not obligated to share the proceeds with customers. However, class-action lawsuits that aim to force companies, ranging from Costco to Ray-Ban maker Essilor Luxottica, to reimburse shoppers are winding their way through the U.S. legal system.
Individuals may be more likely to receive refunds from delivery companies like FedEx and UPS, which collected tariffs on imports directly from consumers. FedEx has said it would return tariff refunds to customers when it receives them from the CPB.
“Supporting our customers as they navigate regulatory changes remains our top priority,” FedEx said in a statement. “We are working with our customers as CBP begins processing refunds and plan to begin filing claims on April 20.”
