Tariff refunds of 122 billion dollars begin landing in results

What happened

AutoZone reported on Tuesday 22 September that its gross margin for the quarter to 29 August was 53.3 percent of sales, up 182 basis points on the year, and that 145 of those basis points came from tariff refunds; over the full fiscal year the refunds were worth 48 basis points. The same morning MillerKnoll said it had recognized an approximate 10 million dollar net increase in operating income in its quarter to 29 August from refunds received from the United States government of previously paid IEEPA tariffs, 11 cents a share and 110 basis points of operating margin. Both figures are in the companies' own results releases, filed with the SEC. ^{[15, 16]}

They are the newest entries in a ledger that opened on 20 February, when the Supreme Court held, by six votes to three, that the International Emergency Economic Powers Act does not authorize the President to impose tariffs. The tariffs at issue were the 25 percent duties on most Canadian and Mexican imports and the 10 percent duty on most Chinese imports imposed over drug trafficking, and the 'reciprocal' duties of at least 10 percent on all imports from all trading partners imposed over trade deficits. The judgment in the case brought by two small businesses was vacated for want of jurisdiction, and the Federal Circuit's judgment for five small businesses and twelve states was affirmed. ^[1]

Seven months on, U.S. Customs and Border Protection told the Court of International Trade on 15 September, in a declaration by Brandon Lord, the executive director of its trade programs directorate, that as of 11 September it had accepted about 134.7 billion dollars of potential and certified refunds for processing and had transmitted roughly 122 billion dollars to the Treasury for disbursement; 286,044 refund declarations had been submitted, 201,293 had passed file validation, and they covered 27.2 million import entries. The third and last phase of its refund system opens on 6 October, the declaration said, as ArentFox Schiff and Supply Chain Dive reported it. ^{[3, 4]}

The record

The system is called CAPE, the Consolidated Administration and Processing of Entries, a function inside Customs' Automated Commercial Environment, the system through which imports are declared. Customs' own page says phase one took unliquidated entries and entries within 80 days of liquidation, liquidation being the point at which Customs' assessment of an entry becomes final; phase two added entries flagged for reconciliation; refunds carry interest under the customs statute from the date the duty was deposited; and valid refunds are generally issued within 60 to 90 days of a declaration's acceptance. Thompson Hine's note dates phase one to 20 April and phase two to 29 June. ^{[2, 5]}

Phase three exists because of the court. On 17 July Senior Judge Richard Eaton ordered Customs to reliquidate, without regard to IEEPA duties, any and all of the plaintiffs' entries that had been liquidated for more than 80 days, in the case now led by Freestyle World, Inc.; the order reaches only companies that filed cases at the Court of International Trade, and phase three on 6 October is open only to such plaintiffs who gave Customs a valid importer number by 30 July. Importers with older liquidated entries who did not sue have no clear road yet, Ward and Smith's note in the National Law Review says, while an April order in V.O.S. Selections directing system-wide reliquidation sits on appeal at the Federal Circuit. ^{[6, 7, 5]}

How much money is at stake depends on who is counting. The Penn Wharton Budget Model put the IEEPA collections at about 164.7 billion dollars through January 2026 and the refunds at up to 175 billion dollars; the National Retail Federation, whose members paid many of them, said businesses had paid over 160 billion dollars; Customs' own update to the court in May, as BDO reported it, put the total collected at roughly 166 billion dollars, of which 85 billion had by then been accepted for processing and 20.6 billion sent to the Treasury. By 31 July, the Conference Board reported, 128.68 billion dollars had been accepted and about 100 billion certified, with no figure from the government for refunds actually issued; by 11 September the accepted figure was 134.7 billion and the transmitted figure 122 billion. ^{[10, 11, 12, 13, 3]}

The refunds are big enough to show in the federal accounts. Fortune reported from the Congressional Budget Office's monthly budget review of 10 August that in July the government refunded 36 billion dollars of customs duties against 26 billion dollars of gross collections, that CBO expects tariff and customs collections for fiscal 2026 to come in 250 billion dollars below its earlier projection, and that the projected deficit for the year had risen to 2.1 trillion dollars from 1.9 trillion. CBO's review is linked below; its page refuses a fetcher, so its figures are given here as Fortune reported them. ^{[8, 9]}

On the companies' side the record is the results releases. A full-text search of EDGAR for 'tariff refund' or 'tariff refunds' in current, quarterly and annual reports filed between 1 June and 22 September returns 767 documents; the desk read the releases of thirty-three companies on this site's record and every one names the refund. Gap recorded IEEPA tariff refunds of approximately 512 million dollars in its second quarter, offset by a commitment of appreciation of approximately 95 million dollars to certain vendors, 1,140 basis points of gross margin. American Eagle Outfitters included a net benefit of 179 million dollars in second quarter gross profit, 1,300 basis points of gross margin, and its full-year operating income guidance now includes it. Kohl's received approximately 150 million dollars, of which approximately 100 million benefited cost of merchandise sold, with a portion recorded as a reduction of inventory, shared with vendor partners and invested in value for customers. Mettler-Toledo went the other way: a one-time tariff refund to its customers reduced its second quarter sales growth by 3 percent. ^{[14, 17, 18, 19, 20]}

Who it reaches

The list runs through retail, apparel, tools, industrial equipment and health care, and each company on it is on this site's record with its own file; every figure in this study is in the release named in the company's tag below, filed with the SEC on the date given, and the EDGAR search linked below is the index to all of them. The desk's reading of the thirty-three releases sorts them three ways. Those that kept the money and said so, most of them presenting an adjusted figure without it: Gap, American Eagle, Abercrombie & Fitch, Williams-Sonoma, Target, Dollar Tree, TJX, Macy's, Burlington, Stanley Black & Decker, Regal Rexnord, YETI, Columbia Sportswear, Oxford Industries, Spectrum Brands, NOV, GE HealthCare, Cardinal Health, Fortune Brands, Genesco, Caleres, Academy Sports, Haverty, Tapestry, Fortive, AutoZone and MillerKnoll. Those that passed some or all of it on: Mettler-Toledo, whose one-time refund to customers cut its sales growth by 3 percent; LCI Industries, whose recreational vehicle sales were down 33 percent primarily from a reduction for refunds expected to be passed through to customers; Walmart, which said the refunds received in its second quarter were being directed into price investments and customer experience; Kohl's, which shared a portion with vendors and customers; Dollar General, which counted its benefit after related reinvestments at about 81 basis points; and Petco, which counted 6.8 million dollars net of the investments it funded. And the ones that said the refund was still coming: Gap's figure is the expected recovery, and Oxford Industries' the claims recognized, against the refunds received to date that it used to reduce debt. ^{[14, 17, 18, 19, 20, 15, 16]}

Where the sources disagree

On the total. Penn Wharton's up to 175 billion dollars, the retail federation's over 160 billion and Customs' roughly 166 billion collected are three counts of one pot, and the 134.7 billion accepted so far is smaller than any of them because acceptance needs a declaration from the importer, an importer number, bank details on file and an entry the system can find. The Conference Board noted in August that the government had not provided a figure for refunds actually issued by the Treasury, and the September declaration speaks of money transmitted for disbursement, not received. ^{[10, 11, 12, 13, 3]}

On who ends up with the money. The refund goes to the importer of record or its broker, the retail federation's note says, because that is who paid the duty. The releases show a share going onward, to vendors as at Gap and Kohl's, to customers as at Mettler-Toledo, LCI Industries and Walmart, and into prices as at Dollar General, while most of the retailers present the refund as a one-time item outside their adjusted results. Whether the tariffs of 2025 were borne by the importer, its suppliers or its customers is a question the releases answer only company by company. ^{[11, 17, 19, 20, 14]}

On the entries still outside the system. Customs' page and the law firms' notes agree that finally liquidated entries older than 80 days are reachable only through a court order, and phase three reaches only plaintiffs. The Conference Board describes the government's argument that a nationwide reliquidation order violates the Supreme Court's decision in Trump v. CASA on universal injunctions, against the importers' argument that the Constitution's uniformity clause requires the same duty treatment everywhere; the Federal Circuit has the appeal. The Supreme Court's opinion decided nothing about refunds, the retail federation's note observes, and its syllabus does not mention them. ^{[2, 7, 13, 1, 11]}

What settles it next

The dated records to read. Customs' phase three opens on 6 October for the plaintiffs on its list, and the declaration of 15 September is the latest of the progress reports the court has ordered Customs to file, each with a new count of declarations, entries and dollars. The Federal Circuit's decision on the V.O.S. Selections reliquidation order, which has no date. CBO's next monthly budget review, which follows the month's end as August's followed July's, with September's gross customs collections against refunds. And the companies' next filings on EDGAR: the retailers that booked refunds in the quarter to August report the quarter to October from mid-November, with or without a second round, and every quarterly report carries the cash-flow line where a refund received shows up; the search linked below finds each new one. Each of these is a document with a date, not a forecast of this site. When the next study in this series is written, it opens with what those documents changed. ^{[3, 5, 7, 8, 14]}