WASHINGTON - The U.S. Supreme Court has ruled in favor of exporters, including the Big 3 and many of their suppliers, in a case involving payment of the federal harbor maintenance tax.
The tax, which was found unconstitutional by the high court, has been paid over an 11-year span. Large refunds dating to when protests were filed may be on tap.
The companies fought the tax, which amounted to 0.125 percent of the value of cargo shipped through U.S. ports, on the ground it was indeed a tax. The U.S. Customs Service, which collected the money, called it a user fee. The U.S. Constitution says, 'No tax or duty shall be laid on articles exported from any state.'
Those paying the most harbor maintenance tax included the automotive, grain and tobacco industries.
Robert Eisen of Coudert Brothers, the New York law firm that represents some 150 companies, including General Motors and others in the industry, said estimates for total harbor tax refunds range around $1 billion and reach $1.5 billion if interest is included. But he said that no firm figures are available and that individual companies probably have not yet worked up final figures indicating refund size.
Eisen said automotive industry refunds 'should be in the low hundreds of millions of dollars.'
GM was one of the first to bring suit in the Court of International Trade in New York.
The harbor maintenance tax also has been paid on imports, and since 1994, Coudert Brothers also has been representing companies fighting that issue.
'There's no question that's a tougher case because there's not a constitutional issue,' Eisen said. But he anticipates some refunds as the harbor maintenance tax statute is repealed within about six months.
Eisen expects a new statute will be enacted, or the Customs Service will return to a pre-1986 policy of using money from the general budget for harbor work.
The Customs Service said it will hold a hearing on its plans for establishing refund procedures for harbor maintenance export taxes.