To amend the Internal Revenue Code of 1986 to establish the individual tariff refund credit.
Sponsored By: Representative Thompson (CA)
Introduced
Summary
Compensate households for tariffs later ruled unlawful. This bill would create a refundable Individual Tariff Refund Credit that pays eligible individuals a per-person share of tariff revenues ordered returned and would impose a 100% excise tax on certain corporate tariff refunds to limit windfalls.
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- Households and individuals would get a refundable credit sized by household members. Advance payments can be issued quickly and recipients must get a notice within 15 days of distribution.
- Corporations and large taxpayers would face a 100% excise tax on non-qualifying tariff refunds. A taxpayer can avoid the tax if it shows passed-on price increases did not exceed 50 percent of the tariff impact on inputs.
- The bill would change how refunds and administrative reimbursements work for U.S. possessions and sets a Puerto Rico cap. It also changes the gross receipts test threshold used to identify covered taxpayers to $1,000,000,000.
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Bill Overview
Analyzed Economic Effects
2 provisions identified: 1 benefits, 1 costs, 0 mixed.
Tariff refund credit for households
If enacted, the bill would create a refundable Individual Tariff Refund Credit for eligible individuals. The Treasury would divide total covered tariff revenues by the total number of people in eligible households to get a per-person amount. Your credit would equal that per-person amount times your household size (1, or 2 for joint returns, plus dependents) for the most recent tax year ending before the court order. Advance payments would reduce the final credit but not below zero, and the IRS must mail a notice within 15 days after any payment. The bill would also require parallel payments to U.S. possessions and cap possession administrative reimbursements at $500,000 (or $10 million for Puerto Rico).
Excise tax on tariff refunds
If enacted, the bill would impose an excise tax equal to 100% of non-qualifying tariff refunds on covered taxpayers. A covered taxpayer generally is a corporation or firm that fails an adjusted gross receipts test using $1,000,000,000 instead of $25,000,000. The tax would apply to amounts received after December 31, 2025 for refunds tied to tariffs imposed from January 20, 2025 through the date of the covered court order. A taxpayer could avoid the tax if it shows product prices rose no more than 50% of input tariffs during the covered period; inflation is excluded when measuring price changes.
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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