78 Percent of Duty Drawbacks go Unclaimed!
Are you in the habit of allowing the federal government to keep more of your money than is legally necessary? Well, according to reports, each year the U.S. Customs Border Patrol (CBP) holds as much as 78 percent – a total of $2.5 billion — of monies owed to U.S. businesses – businesses that are apparently unaware they may be entitled to reimbursement.
If your businesses is involved in export/import practices, pay attention.
Any business that imports materials into the United States must pay duty on those goods. If those materials are then used in the manufacture of products that are subsequently exported – they are taxed again. For example: A U.S. manufacturer imports a set of tires from Canada, and those tires are used in the assemblage of a truck that is subsequently exported. Well, the U.S. manufacturer would pay a tax on the tires when they arrived from Canada, and another tax when the finished truck is exported from the U.S. That’s double taxation, right?
The U.S. government agrees, and through a process called Duty Drawback, businesses can be reimbursed for the additional taxes. The problem though, is that businesses have to know about the program in order to request reimbursement – and have to understand how the program works.
As U.S. Customs has made clear, as much as 78 percent of duty drawbacks – money owed to U.S. businesses – goes unclaimed. If you think your business may be entitled to reimbursement from this program, you should check with your carrier or logistics provider. Although, it’s worth noting that a good logistics provider would have been on top of this, and already applied for a reimbursement on your behalf.
Unfortunately though, not all logistics providers are as experienced with the export/import process as they claim. And CBP’s own website acknowledges that: “[T]he process of filing for drawback can be involved and the time it takes to receive refunds can be lengthy.” Despite the apparent bureaucratic hassle involved, an experienced logistics provider will be well-versed in understanding the process. With $2.5 billion waiting to be claimed, what do you have to lose?