Article written by:
Ellen Bloch, CPA
Director, International Tax & Business Advisory Services

Over the past few weeks, the U.S. has given mixed messages on whether or not it would permit importers to delay duty payments on incoming shipments, given cash flow difficulties presented by the coronavirus pandemic. Importers have continued to press the Administration for duty relief, arguing that without it, many importers will go out of business.

On April 19, 2020, the U.S. announced a 90-day postponement of the deadline for submitting duty payments on certain incoming imports. This is a temporary deferral on general customs duties and does not apply to anti-dumping or countervailing duties, or so-called Section 201, 232 or 301 tariffs. So, this will not ease President Donald Trump’s punitive special tariffs on Chinese goods, steel and aluminum.

To take advantage of the duty deferral program, importers must demonstrate “significant financial hardship.” Such hardship will be deemed to exist where the importer has fully or partially suspended operations due to state, local or federal orders “limiting commerce, travel or group meetings” due to COVID-19, so long as the importer’s gross receipts for the periods from March 13-31 or April 2020 are less than 60% of receipts during the same time frame in 2019.

Due to the specific eligibility requirements, timing and limitations of this program, companies seeking deferral should consult with advisors early on. Additionally, with more and more jurisdictions offering duty deferral programs, a more holistic global supply strategy should be reviewed.

GBQ’s team is here to help assist our clients in navigating through these challenging times. Please contact a member of our team for further assistance or to discuss specific questions.

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