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Importers Receive COVID-19 Relief, Approval to Delay Payments of Duties, Taxes, Fees by Jim Spencer, CPA

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Posted on April 24, 2020 by Jim Spencer

The U.S. Treasury and Customs and Border Protection (CBP) are granting much-needed relief to importers and critical supply-chain businesses struggling with restricted operations and rising financial difficulties through the COVID-19 pandemic.

Under a temporary interim-final rule, eligible importers have the option to defer for 90 days deposits of estimated duties, taxes and fees on merchandise that enters the U.S. in March or April 2020 and would otherwise be due on the date of entry or withdrawal from a warehouse for consumption. No interest will accrue on unpaid amounts during the 90-day postponement period.

To qualify for this relief, importers must demonstrate a significant financial hardship due to a full or partial suspension of operations during March or April 2020 due to government-ordered restrictions to commerce, travel, or group meetings because of COVID-19. More specifically, the rule states that importers will be eligible for a payment deferral when gross receipts for March 13 through 31, 2020, or April 2020 are less than 60 percent of the importer’s gross receipts for the comparable period in 2019. While taxpayers do not need to file any additional forms to qualify for this relief, it is recommended that they maintain meticulous books and records to support claims that they meet eligibility requirements.

Affected business should note that there are limitations to this temporary 90-day deferral of deposits of estimated duties, taxes and fees. For example, importers may not receive refunds for amounts they have already paid. In addition, the relief does not apply to deadlines for tariffs and fees for merchandise subject to antidumping and countervailing duties. Importers will need to file separate entries when shipments contain both deferment-eligible goods as well as merchandise that is not eligible for the 90-day payment postponement.

According to the Treasury Department, “many importers of record are receiving diminished or no revenue during this time while still incurring costs, including the duties, taxes, and fees associated with imported merchandise for their clients and supply chains. Aggravating matters, many major retail chains and other businesses are closing for business – either voluntarily or in response to state and local government requirements.

About the Author: James W. Spencer, CPA, is a director of International Tax Services with Berkowitz Pollack Brant Advisors + CPAs, where he focuses on a wide range of pre-immigration, IC-DISC, transfer pricing and international tax consulting issues for individuals and businesses. He can be reached at the CPA firm’s Ft. Lauderdale, Fla., office at (954) 712-7000 or via email at info@bpbcpa.com.