[sc68cal]

The importer pays the tax and passes it on as higher prices to the consumer. So the importers are the one that had the tax collected from them and would be getting the refund.

The importer CAN be the seller, but other times the importer is a middleman in the supply chain.

[sowbug]

To the CPAs among us: will the refunded import taxes be treated as extra profit for all the importers who paid them?

I could see an argument that they don't have a legal obligation to pass the refunds on to their customers, any more than my local grocery store owes me 5 cents for the gallon of milk I bought last year if the store discovers that their wholesaler had been mistakenly overcharging them.

[mattas]

The idea of getting a refund for mischaracterized tariffs is actually fairly common (it's called a duty drawback and there's a cottage industry around this). It's generally used when an importer incorrectly categorized their import under an HS code that has a higher duty than the correctly categorized HS code.

The difference this time is the scale is orders of magnitude larger. Will be interesting to see how they (importers and CBP) work through this.

[onlyrealcuzzo]

I got charged a $600 tariff from UPS to ship a $30 25-pound sandbag into the US from Canada.

UPS didn't even deliver the product.

I'm suing them in small claims.

We'll see what happens.

I imagine that even after the ruling, our ass backwards legal system will somehow say this makes sense, even though the tariff rate was never near high enough for that bill to make any sense.

Further, they're going to get refunded the $10 it MIGHT have cost them.

[sc68cal]

That's a great question. I would also love to know that answer. I agree with you that they're not going to share the refund if the importer was the middleman in the supply chain, and same thing if the importer was also the seller.

[tim333]

I think the tax is basically on the profit made when you add up costs and expenses. Say:

Before: Importer pays China $10 for widget, pays $2 duty, sells to shop for $12 - profit zero, tax on that zero.

Now: Paid $10 for widget. Paid $2 duty, sold for $12, $2 refunded - profit $2, pays tax on the $2.

At least that's the normal way of doing accounting. There can be odd exceptions and complications in local laws.

[nullhole]

Related question, unanswerable except maybe as a rough estimate: how much will it cost, in accountant/bookkeeper time, to do all the administrivia required to process all these refunds?

[jamincan]

It depends on the terms of the transaction. Most business-to-business transactions would have the importer responsible for duties, but many, maybe the majority of business-to-consumer transactions have taxes & duties covered by the exporter and included in the final price which would typically reflect the additional taxes & duties in the prices. In those case, the exporter would be the one refunded.

[aucisson_masque]

at the end of the day, it's average joe who bought his things more expensive, and he won't get back his money.

That's what matters, don't care if it's the seller or a middleman that gets this money.

That's really a shame for american citizens, i'd be furious if i was american.

[blurbleblurble]

Many are beyond furious

[cyanydeez]

So they basically figured out how to bribe all these companies?

Such a kleptocracy.

[PowerElectronix]

i read that Costco could actually refund everyone, as they can know exactly who bought what.

If they do, that's another matter, but they definitely can.

[latexr]

> The importer pays the tax and passes it on as higher prices to the consumer.

So it matters how we’re interpreting “paying”. One way to look at it is that if the cost was passed on to the consumer, the consumer paid it. The importer simply handed over the money.

[DivingForGold]

and if so, do you really believe any importers who paid the tariff will further refund back to the consumer ? It's eventually a net win for the importer.