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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 ha
by sowbug 8mo ago
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.
- sc68cal 8mo agoThat'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.
- lotsofpulp 8mo agoThere is a 1099 specifically for money received from the government. https://www.irs.gov/forms-pubs/about-form-1099-g https://www.irs.gov/forms-pubs/about-form-1099-g
- mattas 8mo agoThe 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.
- Forgeties79 8mo agoSmart money is that they will make some token comment about "leave it up to the states" or lower courts and then do absolutely nothing about it
- aardvarkr 8mo agoThe feds are the ones that control import duties, not the states. The courts will decide two years from now what to do.
- Forgeties79 8mo agoI get how it works, I’m mostly talking about the how admin will spin it/shirk responsibility
- jopsen 8mo ago> The difference this time is the scale is orders of magnitude larger. The administration will just do nothing. They need 3 maneuvers for this to drag out longer than Trump 2. There is no intention to follow the law here.
- sigwinch 8mo agoI wager he’ll: 1. Claim to refund the money to each taxpayer with a Trump-signed check. 2. The number of checks will not total $200 B. Any reporting to the contrary will take up space from the truth about Epstein. 3. Before 2028, a loyal SuperPAC will form with hundreds of billions in dark money.
- JKCalhoun 8mo ago"…refund the money to each taxpayer…" I've got receipts. Literally. I have receipts for hundreds of dollars where the tariff is itemized (from JLCPCB, etc.)
- Animats 8mo agoA regular importer who routinely pays customs duties is now owed money by Customs and Border Protection. Can they now set off future duties against the balance owed them? Normally, reciprocal debt cancellation is legal. The U.S. Treasury has a whole system for this, but in the other direction. If the government owes you money, and you owe the government money, the Treasury will deduct what you owe from whatever they are paying out.[1] But they're not set up for that in the other direction. [1] https://www.fiscal.treasury.gov/TOP/ https://www.fiscal.treasury.gov/TOP/
- onlyrealcuzzo 8mo agoI 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.
- aardvarkr 8mo agoHuh? In what world was the tariff on sand 2000%?
- jacobgkau 8mo agoIt wasn't the tariff. UPS has been tacking on a ridiculously high paperwork fee for the service of processing tariff payments. Other shipping companies have also had fees, but UPS is the main one that's made it exorbitant and disproportionately higher than the tariff itself.
- qingcharles 8mo agoI'm thinking the delivery agents such as UPS, Fedex, USPS now need to sue the United States so they can pay back all the recipients the fees they charged, plus interest. There are going to be a raft of class action suits based on this. As one of my lawyers once said, the only winners here are the lawyers.
- vjvjvjvjghv 8mo ago“ As one of my lawyers once said, the only winners here are the lawyers.” Congress is full of lawyers do it’s pretty natural that they make rules that favor lawyers.
- markbnj 8mo agoI suspect that my recent experience confirms this. Our daughter shipped two suitcases home from the UK, paying some local company for "door-to-door" delivery. They contracted with UPS who demanded an additional $32 when the first bag showed up. For the second she paid the same fee online so they wouldn't require a check at the door.
- nullhole 8mo agoRelated 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?
- tim333 8mo agoI 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.
- sowbug 8mo agoYes, I think that's the starting point. Another part of my question was whether a CPA applying GAAP would recommend recognizing the $2 as other income, or else as a liability against a future claim from the customer who bought the widget and is now seeking a partial refund. I did what passes for research these days and concluded that if the claim is "probable and estimable," then it could be recorded as a "contingent liability" rather than other income. Relevant facts would include whether the tariff refund included a pass-through refund mandate (unlikely with this administration), or whether class actions for refunds against merchants were pending (inevitable).
- tim333 8mo agoI imagine the government will provide some sort of guidance for that kind of stuff?