What did the Supreme Court rule regarding IEEPA tariffs?

On February 20, 2026, the U.S. Supreme Court ruled in a 6–3 decision that tariffs imposed under the International Emergency Economic Powers Act (IEEPA) were not authorized by statute. The Court held that the President exceeded the authority granted under IEEPA when imposing broad based import duties, striking down the IEEPA tariff program.

Does the Supreme Court tariff ruling mean companies will automatically receive refunds?

No. The Supreme Court tariff ruling does not create an automatic refund mechanism. While the decision establishes a legal foundation that may support IEEPA tariff refunds, refunds will be subject to procedural requirements and implementation guidance from U.S. Customs and Border Protection and the Court of International Trade.

Are tariffs going away as a result of this decision?

Not necessarily. The Supreme Court’s decision invalidates tariffs imposed under IEEPA, but the President retains other statutory authorities to impose trade measures. These include Section 232 of the Trade Expansion Act of 1962, which allows tariffs based on national security determinations, as well as other trade statutes such as Section 301. As a result, while IEEPA based tariffs have been struck down, other tariff mechanisms remain available under U.S. law.

What should importers do now following the Supreme Court tariff ruling?

Importers should begin preparing for potential refund claims by identifying impacted entries, validating historical customs data, reconciling duty payments and developing defensible calculation methodologies. Early preparation can reduce execution risk once formal refund procedures are announced.

Why is refund readiness important before formal guidance is issued?

Refund programs often generate high claim volumes and increased administrative scrutiny. Organizations that prepare documentation, governance frameworks and internal controls early are better positioned to submit timely, well supported claims and avoid delays caused by data gaps or inconsistent methodologies.

How could IEEPA tariff refunds affect my organization’s tax position?

IEEPA tariff refunds may have meaningful tax implications beyond the recovery itself. If previously paid duties were deducted as cost of goods sold or inventory expense, a refund could create federal and state income tax consequences, including income recognition in the year received. Depending on timing and accounting treatment, organizations may need to reassess prior deductions, evaluate amended return considerations, revisit inventory capitalization positions and recalculate effective tax rate projections. For multinational companies, refunds could also affect transfer pricing arrangements, intercompany profitability allocations and cross-border cash planning. Large recoveries may carry financial reporting implications as well, including deferred tax balances and disclosure considerations. Coordinating tariff recovery with tax planning and compliance analysis is often necessary to fully evaluate the downstream impact.

How can Baker Tilly support IEEPA tariff refund preparation?

Baker Tilly’s Tariff Refund & Recovery Services help organizations assess refund exposure, organize and validate entry data, develop defensible claim methodologies and establish documentation governance aligned with anticipated CBP requirements. Our team brings integrated global trade advisory, tax and customs compliance expertise to support refund strategy and operational execution.

Article

Supreme Court tariff ruling and Court of International Trade order reshape the IEEPA refund landscape

Feb. 20, 2026 · Updated March 11, 2026 · Authored by Pete Mento

On February 20, 2026, the U.S. Supreme Court issued a landmark Supreme Court tariff ruling, holding in a 6–3 vote that tariffs imposed under the International Emergency Economic Powers Act (IEEPA) were not authorized by statute. The Court concluded that the President exceeded the authority granted under IEEPA when imposing broad-based import duties, affirming prior lower court decisions that had invalidated the tariff program.

By declaring that IEEPA does not provide tariff authority, the Court resolved a legal question that has shaped U.S. trade policy, compliance strategy and importer risk exposure for several years. With IEEPA rejected as a tariff authority, the focus now shifts from litigation to implementation and the administrative pathways that may follow.

Court of International Trade order moves part of the refund process into implementation

On March 4, 2026, the Court of International Trade (CIT) ordered that all unliquidated entries be processed without IEEPA tariffs. In practical terms, this means U.S. Customs and Border Protection (CBP) should liquidate those entries with the IEEPA duty removed. Where estimated duties were already paid at entry, overpayments should flow back automatically through the normal liquidation refund process.

Assuming total IEEPA collections were approximately $300 billion, and using a reasonable working estimate that roughly half of affected entries remain unliquidated, the court’s order effectively creates a pathway for approximately $150 billion to be resolved through liquidation corrections rather than through a formal refund claim process.

This does not mean the broader refund issue is resolved. The court has addressed what is procedurally the most straightforward category of entries. The remaining estimated $150 billion tied to entries that have already liquidated presents more complex procedural considerations. Because those entries cannot be corrected through routine liquidation mechanics, resolution will likely require some combination of protests, continued litigation positioning or a court-directed administrative refund process.

The refund landscape is now bifurcated:

Unliquidated entries may move through standard liquidation corrections.

Pete Mento

Director

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The information provided here is of a general nature and is not intended to address the specific circumstances of any individual or entity. In specific circumstances, the services of a professional should be sought. Tax information, if any, contained in this communication was not intended or written to be used by any person for the purpose of avoiding penalties, nor should such information be construed as an opinion upon which any person may rely. The intended recipients of this communication and any attachments are not subject to any limitation on the disclosure of the tax treatment or tax structure of any transaction or matter that is the subject of this communication and any attachments.

Supreme Court tariff ruling and Court of International Trade order reshape the IEEPA refund landscape

Court of International Trade order moves part of the refund process into implementation

Pete Mento

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