How small businesses are preparing for tariff refunds

Next week, the federal government is planning to start processing refunds to American companies that paid import taxes under the tariffs the Supreme Court struck down in February.

All told, the government owes companies $160 billion and some change. But those companies will have to jump through some hoops to get their money back.

The big firms — Walmart and FedEx, for instance — will have the resources to navigate the process, but small businesses that can’t afford to hire lawyers or consultants might not.

The refund process that U.S. Customs and Border Protection has set up looks relatively simple. Businesses just need to upload a Microsoft Excel document with a list of tariffs they want repaid into a new online tool.

“It’s a lot easier than what could have been required in terms of hiring lawyers or filing individual cases,” said Dan Anthony, executive director of the small business coalition We Pay The Tariffs.

Still, there are hurdles — as shown with the experience of Beth Benike, founder of Busy Baby.

“I have a line of silicone baby products all designed to keep toys within reach and off the floor, at home and on the go,” Benike said.

Busy Baby makes its products in China. Its orders are too small for U.S. manufacturers. Benike’s been trying to get set up online to get $50,000 in tariffs back.

“I’ve been calling and submitting tickets to which they tell me, here’s the instructions on how to create the account,” she said. “I tell them I am creating the account. I’m getting an error message.”

Benike said she’s determined to see the process through, but can understand how other small businesses don’t have the time or expertise.

Kacie Wright, the business manager of musical instrument retailer Houghton Horns, hadn’t even heard that the refund process was about to begin.

“Last I heard that they were working on it,” she said.

Houghton Horns is owed about $100,000. But there’s a complication — most of those tariffs were paid through intermediaries.

“So UPS, FedEx, they're going to go have to get the refunds, and then find some process to pass that on to us, and we have heard nothing from them so far,” Wright said.

FedEx has promised refunds eventually, and UPS has urged companies to prepare paperwork.

Pete Mento, director of global trade advisory services at Baker Tilly, said all companies should file for refunds, even if it’s just to get the hang of doing so.

“Our current tariff burden of 10% on practically everything we're importing from anywhere — probably in eight to 10 months from now, we're going to go through all of this all over again,” he said.

That’s because Mento said he expects those tariffs to be overturned as well.