Harbor maintenance tax update.

• Author: Wainwright, Ron

The harbor maintenance tax (HMT) was enacted as part of the Water Resources Development Act of 1986, to provide financing for port development. The HMT was an excise tax of .04% (.0004) of the value of cargo loaded or unloaded in U.S. ports. The rate was changed to .125% (.00125) by the Revenue Reconciliation Act of 1990.

In March 1998, the Supreme Court held that applying the HMT to exports violated the Export Clause (Article I, Section 9, Clause 5) of the U.S. Constitution, which prohibits export taxing (United States Shoe Corp.). In response, the U.S. Customs Service (USCS) announced that, after April 25, 1998, it would no longer "collect the harbor maintenance fee for cargo loaded on board a vessel for export...." (US Customs Service General Notice, 5/1/98).

The Court remanded the case to the U.S. Court of International Trade (CIT) to determine refund procedures, which the CIT issued in October (United States Shoe Corp. (10/15/98)). To follow these procedures, a taxpayer must first bring suit in the CIT for refund of the HMT. Under this decision, plaintiffs must then file claims with the USCS (P.O. Box 68940, Indianapolis, IN 46268).

The CIT has upheld the validity of the two-year statute of limitations (SOL) on HMT refunds (Stone Container Corp. (1998)). If this two-year SOL holds up, exporters filing now will be entitled only to HMT paid between the period beginning...