This alert reflects publicly available guidance as of April 29, 2026.

Summary: The U.S. CBP has launched Phase 1 of its CAPE refund portal, allowing importers to claim refunds on certain IEEPA-based tariffs for unliquidated entries and entries within 80 days of liquidation. Importers should act quickly with customs brokers to identify eligible claims and submit filings, as refunds may be issued within 60 to 90 days.

U.S. Customs and Border Protection (CBP) opened the first phase of its Consolidated Administration and Processing of Entries (CAPE) refund portal on April 20, 2026, giving importers an electronic path to seek refunds of certain International Emergency Economic Powers Act (IEEPA)-based tariffs. Phase 1 is limited to certain unliquidated entries and certain entries within 80 days of liquidation, and refund rights generally belong to the importer of record.

Importers should move quickly with their customs brokers to identify eligible entries and prepare claims.

CAPE Refund Portal for IEEPA Tariffs: Key Deadlines, Eligibility, and Action Steps

The launch of the CAPE portal marks a significant opportunity for importers to recover IEEPA-related tariffs, but strict eligibility rules and tight timelines make it critical to understand the key requirements and act quickly.

• CAPE is live for Phase 1 IEEPA refund claims.
• Phase 1 is limited to certain unliquidated entries and certain entries within 80 days of liquidation.
• Importers should work with customs brokers now to obtain a complete IEEPA-duty-paid report, determine which entries are currently eligible for refund, and submit the refund claim.
• The importer of record generally is the party entitled to the refund, even if another party ultimately bore the economic cost.
• For many valid Phase 1 claims involving unliquidated entries, CBP says refunds may generally be issued within 60 to 90 days after acceptance, although some claims will take longer.

How Importers Should Work With Customs Brokers To File CAPE Refund Claims

Companies should reach out to their customs brokers promptly to obtain a complete IEEPA-duty-paid report and to determine how the broker can assist with the CAPE filing. In many cases, the broker is best positioned to identify entry numbers, duty amounts, liquidation status, liquidation dates, and whether the entries were filed by that broker or another filer. Because this is fundamentally a customs-administration process, the customs broker and, where needed, customs or trade counsel should lead the portal mechanics and eligibility analysis.

Federal Tax Treatment of IEEPA Tariff Refunds: Inventory, COGS, and Timing Impact

From a federal income tax perspective, how the original tariff expense was treated will generally impact the tax treatment of any refunds received. Customs duties commonly are reflected in inventory cost rather than as a stand-alone current deduction. That means the tax effect of a refund can depend on whether the related inventory is still on hand or whether the tariff costs already flowed through cost of goods sold.

To the extent the refunded duties remain embedded in ending inventory, taxpayers should evaluate whether the refund reduces inventory basis. To the extent those costs already flowed through cost of goods sold, the refund may present a cost-of-goods-sold adjustment or recovery issue. Timing also can depend on the taxpayer’s method of accounting and on when the right to the refund becomes sufficiently fixed. Any interest component should be analyzed separately.

State and Local Tax Implications of Tariff Refunds: Apportionment and Compliance Risks

From a state and local tax perspective, the treatment of IEEPA tariff refunds is less uniform and requires careful analysis across jurisdictions.

While many states begin with federal taxable income, differences in conformity to inventory capitalization and cost recovery rules may cause the state treatment of both the original tariff expense and any subsequent refund to diverge. In addition, the characterization of the refund may have apportionment implications, whether it is reported as a reduction to cost of goods sold or as a form of income or receipt, potentially affecting the sales factor or gross receipts tax base. Finally, where the importer of record is not the same entity that bore the economic burden of the tariffs, taxpayers should consider the impact on intercompany reporting and state filing positions, especially in separate return states.

Next Steps for Importers: How To Prepare and File IEEPA Refund Claims Through CAPE

KSM recommends engaging with your customs broker to obtain the needed IEEPA-related reports and assess options for filing a refund claim. There may be instances where experienced customs/trade counsel will also be needed.

KSM professionals are monitoring the guidance related to IEEPA refunds and will share updates as additional guidance emerges. In the meantime, if you have questions related to the tax implications of this issue, reach out to your KSM advisor or fill out the form below.

CONNECT WITH US