Tariff Payment Paper Trail Is Critical for Building Refund Case

Trade lawyers are telling clients to keep thorough records of the tariffs they’re paying—starting immediately if they haven’t already—ahead of a court decision that could result in billions in refunds pouring back to companies.

President Donald Trump cited as the legal basis for many of his tariffs a 1977 law never before used to authorize the levies, sparking suits challenging the measures as unlawful. Those suits are moving quickly through the courts, with the potential to reach the Supreme Court.

US Customs and Border Protection reports it has collected about $140 billion in tariffs, taxes, and fees from the start of Trump’s second term through the end of July, the latest data available. According to CBP data as of mid-July, roughly $50 billion of that comes from tariffs imposed by Trump using the International Emergency Economic Powers Act (IEEPA), the law at the center of a key case currently waiting a decision from the US Court of Appeals for the Federal Circuit.

Whether companies get a refund, how much gets refunded, and the process for getting money back to companies all hinge on the outcome of the litigation.

“A lot is riding on this case, both for the future as well as for the tariffs that have been collected already,” said Ginger Faulk, a partner at Eversheds Sutherland who leads the firm’s US and global sanctions practices.

Getting a Refund

Tariff payment records are stored in a federal online system called ACE, or the Automated Commercial Environment. Importers and their customs brokers can log in to view those records.

Ted Murphy, a partner at Sidley Austin LLP, is advising his clients not to rely on ACE when they need their records.

After he read a letter Solicitor General D. John Sauer and Assistant Attorney General Brett Shumate wrote Aug. 11 to the Federal Circuit, Murphy said he thought about how the administration could respond to a court loss. Sauer’s letter warned that the undoing of trade agreements following a court finding against Trump’s use of the tariffs would lead to a “1929-style result,” and said the US was “a dead country” a year ago, but Trump’s tariff policy had made it strong again.

If the government loses this tariff case and a window opens for companies to file for refunds, they wouldn’t want to risk that information not being available on the government site, Murphy said.

“I get paid to think around corners and try to make sure people are well positioned,” he added.

There’s precedent for companies needing to rely on their own documentation to get a tariff refund.

The government lost a fight over the legality of part of a tax designated for harbor maintenance in the 1998 Supreme Court case United States v. United States Shoe Corp. Some companies that had paid were eligible for refunds—but the government told them they’d need to rely on their own records, Murphy said.

“That was a pain in the neck,” Murphy said.

“Could they do something like that here?” he added. “I wouldn’t say it’s not possible.”

For Angela Gamalski, a partner at Honigman, the recommendation to have documents on hand is about ensuring clients are ready to spring into action if a window opens to submit for refunds.

Murphy and Gamalski both said they’re advising clients to do weekly or monthly downloads from ACE and keep compiling their records in good order.

“I look at it as just a volume management perspective,” Gamalski said. “You don’t start training for a marathon the day before the race.”

Challenging IEEPA Tariffs

Legal challenges to Trump’s tariffs have focused on whether IEEPA authorizes the president to impose tariffs at all, if there are limits on that authority, and whether the issues he cited—including trade imbalances—constitute an “unusual and extraordinary threat” under the emergency powers law. Trump cited IEEPA as the legal authority in many of the country-specific tariffs he’s levied, while the industry-sector tariffs on goods like steel and copper were imposed under a different law.

The Federal Circuit held an en banc hearing in one of the IEEPA cases—V.O.S. Selections, Inc. v. Trump—on July 31. An appeal from the losing side could send the case to the Supreme Court for consideration, if the court grants it.

If the court declares the tariffs were entirely illegal, it’s almost certain that levies already paid would be eligible for a refund, said Michael Lowell, chair of Reed Smith’s global regulatory enforcement group.

The decision could also be more nuanced than a simple yes or no, Gamalski said. For example, the court could point to particular stretches of time when the legal status of the tariffs changed. It could rule that the national emergency justification for using IEEPA to impose tariffs was valid for some countries, but not others.

Any of those outcomes could require companies to more finely parse out what they paid and when, she added.

Meanwhile, lawyers said, it’s also not clear if refund payments would be issued automatically, or if companies would need to calculate what they’re owed and file for their refunds themselves.

“You should have all of your data ready because you might be going for everything; you might be having to isolate some of that,” Gamalski said. “And if you are starting at square zero of pulling everything together, it’s going to be just that much harder.”

A version of an AI summary at the top of this story was removed.