Potential Refunds for Exporters | Harbor Maintenance Tax Held Unconstitutional
Refund opportunities may be available to exporters due to a recent U.S. Supreme Court decision in United States v. United States Shoe Corporation. The Supreme Court has held that the harbor maintenance tax (HMT) as applied to exports violates the Export Clause of the Constitution, which provides, "no tax or duty shall be laid on articles exported from any state." The government lost their argument that the HMT was not actually a tax but a permissible user fee.
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The HMT was imposed on exporters and importers at a rate of .125% of the value of the cargo ($1.25 per $1,000) passing through the U.S. port. The funds were to be accumulated in the Harbor Maintenance Tax Trust Fund for disbursement to the Army Corps of Engineers for dredging profits in qualifying U.S. ports. These payments were submitted quarterly to the U.S. Customs Service.
Claims for refund are filed with the Court of International Trade in New York City and, as such, will require the services of an attorney familiar with practice before that court. There are a number of open questions regarding the ruling and the availability of refunds. These include how many years one can go back to claim refunds; what rate of interest will the government be required to pay on refunds; and the availability of refunds to other than exporters.
For example, Massachusetts allows a 100% tax credit for this tax against its corporate income tax.