To amend the Internal Revenue Code of 1986 to establish the individual tariff refund credit.
Sponsored By: Representative Thompson (CA)
Introduced
Summary
Individual Tariff Refund Credit would create a refundable credit that gives households payments when a court orders the federal government to repay unlawfully collected tariffs. The bill also would impose a 100% excise tax on certain corporate tariff refunds to limit non‑qualifying windfalls.
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- Families and households: Eligible individuals would be allocated a per-household payment based on total covered tariff revenues divided across eligible household members. Payments would be advanced quickly and mailed with a notice within 15 days and no interest on overpayments.
- U.S. possessions and territories: The Treasury would provide payments to possessions to cover losses or foregone benefits and account for added administrative costs, generally capped at $500,000 and capped at $10,000,000 for Puerto Rico. The bill treats mirror-code territories using U.S. tax rules for resident liability.
- Businesses and large taxpayers: A new excise tax would apply at 100% to non-qualifying tariff refunds received in business. An exception lets taxpayers avoid the excise if price increases during the covered period did not exceed 50% of the tariffs on inputs, with the covered period from January 20, 2025 to the date of a covered court order.
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Bill Overview
Analyzed Economic Effects
2 provisions identified: 0 benefits, 1 costs, 1 mixed.
Big businesses face 100% excise
If enacted, large businesses would owe an excise tax equal to 100% of tariff refunds they receive in the course of business. The rule would apply to amounts received after December 31, 2025. A covered taxpayer is broadly a corporation or other firm that fails a gross receipts test when $1 billion is substituted for $25 million. A firm would avoid the tax only if it shows product price increases during January 20, 2025, through the court order date did not exceed 50% of the tariff costs on inputs, with increases measured excluding inflation.
Household tariff refund payments
If enacted, eligible U.S. residents would get a refundable tax credit tied to court-ordered tariff repayments. The government would divide total refunded tariff money by the number of eligible people to get a per-person amount. That per-person amount would be multiplied by your household size (1, or 2 for joint returns, plus dependents) to get your credit. The credit would be treated as an advance tax payment for your most recent tax year ending before the court order; the IRS would send refunds as rapidly as possible but would not pay interest. The IRS must mail a notice within 15 days after sending any payment. Treasury would also pay U.S. possessions to offset lost revenue or to mirror benefits, but those possession payments are limited (administrative caps of up to $500,000, and $10,000,000 for Puerto Rico) and people who get a possession credit or approved-plan payment could not also claim the U.S. credit for the same benefit.
Sponsors & CoSponsors
Sponsor
Thompson (CA)
CA • D
Cosponsors
There are no cosponsors for this bill.
Roll Call Votes
No roll call votes available for this bill.
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