6% Statutory Interest on Tariff Refunds: How It's Calculated
TL;DR
Under 19 U.S.C. § 1505(b), valid tariff refund claims accrue statutory interest at a rate set by the Secretary of the Treasury — historically around 6% per annum. Interest accrues from the date the duties were deposited to the date the refund is paid. The longer the claim takes to process, the more interest may accrue, making timely filing and active claim management financially meaningful.
What Is the Legal Basis for Statutory Interest on Tariff Refunds?
The legal authority for statutory interest on customs refunds comes from 19 U.S.C. § 1505(b), which requires CBP to pay interest on refunds of excess duties, taxes, and fees deposited by importers. The interest rate is determined by the Secretary of the Treasury and has historically been set at approximately 6% per annum. This rate applies to all valid refund claims, including those arising from IEEPA tariff protests filed through CAPE.
How Is the Interest Calculated?
Statutory interest on tariff refunds is calculated as simple interest — not compound interest — on the amount of the overpayment. The interest accrual period begins on the date the excess duties were deposited with CBP and ends on the date the refund is paid. For example, if an importer overpaid $100,000 in IEEPA tariffs and the refund is processed 12 months after the deposit, the statutory interest would be approximately $6,000. If processing takes 18 months, the interest grows to approximately $9,000.
Why Does Filing Speed Matter for Interest Recovery?
While interest accrues from the date of deposit regardless of when the protest is filed, the protest itself must be filed within the 180-day protest window from the date of liquidation. Missing the window means losing both the refund and all associated interest. Additionally, the faster a claim is processed and approved, the sooner the importer receives both the principal refund and the accrued interest. Active claim management helps prevent delays that extend the time between filing and payout.
What Happens to Interest If the Refund Is Delayed?
Interest continues to accrue as long as CBP holds the overpaid funds. If processing takes longer than the stated 60 to 90 day timeline — which is currently common — the interest amount grows accordingly. This means that processing delays, while frustrating from a cash flow perspective, can actually increase the total recovery amount. However, importers should not rely on delays as a strategy; the primary goal is recovering principal and interest as efficiently as possible.
Is Statutory Interest Taxable?
Yes. Statutory interest paid by CBP on tariff refunds is generally considered taxable income for federal income tax purposes. Importers should consult with their tax advisors to understand how refund interest impacts their tax obligations. The principal refund amount itself may have different tax implications depending on how the original tariff payments were treated for accounting purposes.
| Factor | Statutory Interest on Tariff Refunds | Typical Business Savings Rate |
|---|---|---|
| Rate | Approximately 6% per annum (set by Treasury) | 4–5% (high-yield savings, 2025) |
| Compounding | Simple interest | Compound interest (varies) |
| Risk | Backed by federal statute | FDIC insured up to $250K |
| Liquidity | Paid upon refund approval | Immediate access |
| Tax Treatment | Taxable income | Taxable income |
| Action Required | Must file valid protest | Deposit funds |
Frequently Asked Questions
Is the 6% interest rate guaranteed?
The interest rate is set by the Secretary of the Treasury under 19 U.S.C. § 1505(b) and can change. The rate has historically been approximately 6% per annum, but importers should verify the current rate at the time of filing.
Does interest accrue if my claim is pending for years?
Yes. Statutory interest accrues from the date of deposit until the date of refund, regardless of how long the claim takes to process. Extended processing times result in higher interest amounts.
Can I recover interest without a recovery specialist?
Interest is automatically calculated by CBP on approved refund claims. However, ensuring the claim is filed correctly, within the window, and actively managed increases the likelihood of approval and timely payout.
Chris Ward | Ward Business Solutions
Tariff Refund Agency is not CBP, U.S. Customs, or a government agency. We do not provide legal advice. Refund eligibility, amounts, and timing depend on individual circumstances. Past results do not guarantee future outcomes.