- Type : • HTSUS :
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Related:
90831
OT:RR:CTF:ER
H095403 PTM
Ms. Delia M. Crawford
U.S. Customs and Border Protection
Operations Specialists – Trade
Los Angeles Field Office
One World Trade Center
Long Beach, CA 90831
Dear Ms. Crawford,
We are writing in response to your correspondence dated February 8, 2010, in which you request internal advice regarding a refund of overpaid excise taxes on imported liquor. Our response follows.
FACTS:
In your letter, you state that an importer filed an entry summary and made a payment of excise tax to U.S. Customs and Border Protection (“CBP”) on January 16, 2007, on imported liquor. The liquor arrived in bulk and was taken to the importer’s bonded premises of a distilled spirits plant. After bottling, the liquor was removed from the bonded facility. At that time, the importer paid excise tax a second time to the Bureau of Alcohol, Tobacco, Tax and Trade Bureau (“TTB”). CBP liquidated the entry on November 9, 2007.
The importer performed an audit and discovered that it had paid the excise taxes twice. The importer alerted both CBP and TTB of the overpayment of taxes in February 2010, after the 180 day period in which it could have protested the liquidation of the entry by CBP. The importer requested a refund from the CBP Port and TTB. Because the liquidation was final, the Port declined to issue a refund, stating that it did not have a method by which to refund the overpayment. You ask, assuming that there was an overpayment in excise taxes, how that overpayment may be refunded to the importer and whether CBP or TTB is responsible for issuing the refund.
ISSUE:
What is the proper procedure to address the request for a refund of overpaid excise taxes on imported liquor after liquidation of the entry is final.
LAW AND ANALYSIS:
In your request for internal advice, you wished to know whether it is legally permissible for the port to request CBP’s Office of Administration (“OA”) to issue an administrative refund for any excise taxes that may have been overpaid. Additionally, you queried whether the entry could be reliquidated for the refund even though the date of liquidation is outside the 90-day period for reliquidation and outside of the 180-day protest period. We conclude that CBP is unable to issue a refund on the overpaid excise tax because liquidation is final. However, CBP may certify that the excise tax was paid to CBP and the importer may pursue a refund from TTB by the procedure set forth in 19 C.F.R. §24.36(e).
The CBP regulation that covers the refunds of excessive duties and taxes is 19 C.F.R. §24.36. The regulation establishes when the port director is authorized to issue a refund of alcohol taxes, and when a claim must be made directly to TTB. The port director is only authorized to issue refunds in cases of the type that are excepted from the application of section 6423, Internal Revenue Code of 1954 (26 U.S.C. §6423), which sets forth the Internal Revenue Service conditions to allow refunds on alcohol and tobacco taxes. The cases that are excepted from 26 U.S.C. §6423 are set forth in 19 C.F.R.§ 24.36 (d) (1)-(9). Furthermore, this option is only permissible prior to liquidation or reliquidation of an entry or reconciliation. See 19 C.F.R. §24.36(a) (which provides for a refund only “[w]hen it is found upon, or prior to, liquidation or reliquidation of an entry or reconciliation that a refund of excessive duties, taxes, fees or interest…is due”).
In any instance in which a refund of overpaid excise tax is not covered by 19 C.F.R. § 24.36(d), CBP may certify the amount of excise taxes that were overpaid and the importer may apply for a refund directly with TTB. See 19 C.F.R. § 24.36(e). Under this provision, when CBP is not authorized to issue a refund directly, it may still assist the importer in pursuing a refund from TTB by providing proof of the entry and payment of internal revenue tax deposited via the procedure outlined in the regulation. The notice of refund provided and the certified statement issued by the port director (upon request) must be filed directly with the TTB with the claim filed on the internal revenue Form 843. Id.
Therefore, we must assess whether the port director may issue the refund under 19 C.F.R. §24.36(d), or whether the importer must request the refund from TTB via the procedure set forth in 19 C.F.R. §24.36(e). The port director may not issue the refund if liquidation is final. 19 C.F.R. §24.36(a). Liquidation is final on all parties unless protested within 180 days of the decision protested. See 19 U.S.C. §1514. Furthermore, CBP may reliquidate an entry within 90 days from the date on which the notice of the original liquidation is given. See 19 U.S.C. §1501. The entry liquidated on November 9, 2007, and the importer did not raise this issue with the port until February of 2010, well after these deadlines had passed. Therefore, the liquidation of the entry and collection of excise taxes by CBP is final. Consequently, the port director may not issue the refund. The only recourse available to the importer is to seek the refund from TTB via the procedure set forth in 19 C.F.R. § 24.36(e), discussed above.
HOLDING:
CBP does not have the authority to refund over-paid excise tax on alcohol after liquidation of the entry is final. Therefore, the port director may not issue a refund or request OA to issue a refund of overpaid excise taxes on imported liquor.
A request for a refund of overpaid excise taxes on imported liquor after liquidation of the entry is final may be made to TTB with CBP’s assistance, via the procedure set forth in 19 C.F.R. §24.36(e).
No later than 60 days from the date of this letter, the Office of Regulations and Rulings will make the decision available to CPB personnel, and to the public on the CPB Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division