Academic journal article Journal of Accountancy

Refunds for Harbor Maintenance Taxes

Academic journal article Journal of Accountancy

Refunds for Harbor Maintenance Taxes

Article excerpt

On March 31, 1998, the U.S. Supreme Court unanimously struck down the harbor maintenance tax (HMT) as an unconstitutional tax on exports (U.S. v. United States Shoe Corp.). Exporters, importers and domestic shippers pay the HMT based on the value of commercial cargo they ship through U.S. ports. The U.S. Customs Service collects the HMT at the time exports are loaded and imports and other shipments are unloaded. The tax traditionally has been used to fund harbor maintenance and development.

U.S. Shoe sought refunds of HMT paid during a three-month period in 1994, arguing that HMT violates the Export Clause of the U.S. Constitution, which prohibits Congress from imposing any duty on exports. The U.S. government declared that the HMT is a permissible user fee, not an export duty.

Justice Ginsberg ruled that the HMT "bears the indicia of a tax" because Congress called it a tax and because it is part of the Internal Revenue Code. More important, the HMT is levied directly on exported goods, with reference to their value, and hears no relationship to port services rendered to a shipper. …

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