A refund system for businesses that paid tariffs the U.S. Supreme Court ruled President Donald Trump imposed without constitutional authority is scheduled to launch Monday, with importers and their brokers able to begin claiming refunds through an online portal beginning at 8 a.m., according to U.S. Customs and Border Protection. The process represents the first step toward returning billions of dollars to companies—and potentially consumers—who bore the cost of tariffs that the nation's highest court found exceeded presidential authority.
In a 6-3 decision this year, the Supreme Court found that Trump usurped Congress' tax-setting role last year when he set new import tax rates on products from almost every other country, citing the U.S. trade deficit as a national emergency that warranted his invoking of a 1977 emergency powers law. Although the court majority did not address refunds in its ruling, a judge at the U.S. Court of International Trade determined last month that companies subjected to IEEPA tariffs were entitled to money back.
Massive Scale of Unconstitutional Taxes
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. As of 5 days ago, 56,497 importers had completed registration and were eligible for refunds totaling $127 billion, including interest, the agency said.
To receive refunds, importers have to register for the CBP's electronic payment system. If CBP approves a claim, it will take 60-90 days for a refund to be issued, the agency said. The government expects to process refunds in phases, focusing first on more recent tariff payments.
Procedural Hurdles and Small Business Concerns
Any number of technical factors and procedural issues could delay an importer's application. 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 said 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."
Small businesses have eagerly awaited the chance to apply for refunds. Brad Jackson, co-founder of After Action Cigars in Rochester, Minnesota, said he started compiling records and preparing to enter information into the system the minute CBP announced the launch date. The company imports cigars and accessories from Nicaragua and the Dominican Republic. Last year, it paid $34,000 in tariffs and absorbed much of the cost instead of raising customer prices, Jackson said.
Last spring, he had a two-week delay in a shipment due to a missing document, so he is being more careful with refund documents, he said. "My main concern is the turnaround time," Jackson said. "A refund process that takes several months to complete doesn't solve the cash flow problem that it is supposed to fix."
Consumer Refunds Remain Uncertain
Tariffs are paid by importers, and some companies pass on the tax costs to consumers via higher prices. The system starting up tomorrow 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 CBP. FedEx said in a statement, "Supporting our customers as they navigate regulatory changes remains our top priority." It added, "We are working with our customers as CBP begins processing refunds and plan to begin filing claims on April 20."
Why This Matters:
The Supreme Court's finding that Trump exceeded constitutional authority by imposing $166 billion in tariffs without congressional approval vindicated the separation of powers that protects citizens from executive overreach. Yet the refund process highlights a troubling gap: while businesses that paid the unconstitutional taxes will receive their money back, ordinary consumers who bore higher prices have no guaranteed path to reimbursement unless they prevail in class-action litigation or purchased through companies like FedEx that collected tariffs directly. Small businesses like After Action Cigars, which absorbed $34,000 in tariff costs to avoid raising prices on working-class customers, now face a months-long wait for refunds that won't solve their immediate cash flow problems. The 60-90 day processing timeline and complex procedural requirements may disadvantage smaller importers who lack the legal and accounting resources of major corporations, potentially turning what should be straightforward restitution into another example of how regulatory complexity favors large businesses over Main Street entrepreneurs and everyday shoppers.