Tax Law News - Federal Circuit
Federal Circuit - The FindLaw Federal Circuit Court of Appeals Opinion Summaries Blog

Recently in Tax Law Category

The Harmonized Tariff Schedule of the United States is a 3,000-page book that classifies every single thing that enters the country, all for the purpose of determining how to tax it when it gets here. For example, black tea is free, but flavored green tea will cost the importer 6.4 percent. A T-shirt made of man-made fibers has a whopping 32 percent tariff, but if it's cotton, then it's only 16.5 percent.

The point is that how you classify something makes a big difference when it comes to paying taxes. Victoria's Secret, like most clothing companies, manufactures clothes overseas and then imports them. They make something called a Bra Top and another thing called a Bodyshaper. The Court of International Trade said these were "other garments, knitted or crocheted," which requires a 10.8 percent tariff. Victoria's Secret, on the other hand, says they should be considered "brassieres, girdles, corsets [...] and other similar articles and parts thereof." That's only 6.6 percent.

It's not every day that we get to read a Federal Circuit opinion deciding what tariff classification a product should be given. It's your lucky day, as the Federal Circuit recently opined on the nature of paper hole punches used for scrapbooking.

The Federal Circuit had to determine, "[w]hat's in a name?," and found in this case, the answer was "everything."

A Chinese plastic manufacturer that did not cooperate with U.S. Commerce investigations was saddled with a “country-wide” duty on all of its woven plastic sacks being imported to the U.S., and the Federal Circuit Court upheld Commerce’s decision.

Are political squabbles with China affecting companies who export goods from China to the U.S.?

Fed. Circ. Remands Son-of-Boss Tax Sham Case

The Federal Circuit Court of Appeals came down with a ruling on a Son-of-Boss case.

Before we get into the details of what a “Son-of-Boss” case really means, let’s talk a bit about the court’s ruling.

Fed Circ. Dismisses Tax Refund Suit for Badly Filed Tax Returns

Tax day was earlier this week and a recent case before the Federal Circuit Court of Appeals came out just in time, elaborating the prerequisites of bringing a refund claim.

As with most tax claims that reach the Federal Circuit Court of Appeals, the case doesn’t break down tax issues as much as it talks about appellate procedure in tax cases.

U.S. Cannot Impose Countervailing Duties on Chinese Goods

In a ruling that has critics prophesying doom for American industries, a three-judge panel of the Federal Circuit Court of Appeals held that the government cannot impose countervailing duties against China's subsidized tires.

Because China is a non-market economy, the Federal Circuit upheld the U.S. Court of International Trade's order that U.S. countervailing duty law does not apply to Chinese imports. However, the federal court of appeal unanimously affirmed the Trade Court's ruling on a different ground.

The Trade Court initially held that imposing countervailing duties on non-market economy goods could lead to "double counting" since antidumping duties are already assessed on such goods. The Federal Circuit, on the other hand, held that Congress did not intend for government payments to companies in non-market economies be characterized as subsidies.

Fed Circuit: Mellorine Not an Article of Milk

I scream, you scream, we all scream for ... mellorine?

If Arko Foods International's mellorine is your preferred non-dairy, frozen dessert you can rest assured that your favorite treat remains something "other" than "an article of milk."

For those of you who are unfamiliar with the product, mellorine is frozen dessert similar to ice cream, but with vegetable or animal fat substituted for at least some of the butterfat. Arko imports six flavors of mellorine relevant to this case: purple yam, fruit salad, mango, macapuno, (a type of coconut), durian, (a fruit), and Quezo Royale, (a cheese and coconut flavor also known as Quezo Real).

SKF USA Inc. v. US, 10-1128

Antidumping duty orders on ball bearings

SKF USA Inc. v. US, 10-1128, concerned a challenge to the decision of  the Court of International Trade, affirming the final determination of the United States Department of Commerce in its seventeenth administrative review of antidumping duty orders on ball bearings and parts thereof from France, Germany, Italy, Japan, Singapore and the United Kingdom.


Horizon Lines, LLC v. US, 10-1138

Court of International Trade's determination that the government owed a refund to an operator of cargo ship for duties imposed

Horizon Lines, LLC v. US, 10-1138, concerned a challenge to the Court of International Trade's conclusion that the government owed an operator of cargo ship a refund for duties imposed on certain work performed on an ocean carrier while the ship was overseas.

Kahn v. Dep't of Justice, 09-3125, concerned a challenge to the Merit Systems Protection Board's final decision that plaintiff did not make protected disclosures under the WPA, in a DEA agent's suit under the Whistleblower Protection Act (WPA).  In affirming, the court held that the administrative judge did not err in finding that plaintiff's communications with an agent were not protected disclosures because they were made as part of normal duties through normal channels.  The court concluded that plaintiff's report was not a disclosure because he did not reveal something that was hidden and not known to the DEA.  Lastly, because plaintiff's communications were not protected under the WPA, the question of whether the government could have shown by clear and convincing evidence that it would have transferred plaintiff on the absence of his communications need not be addressed.

Henry E. & Nancy Horton Bartels Trust for the Benefit of Cornell Univ. v. US, 09-5122, concerned a challenge to the Court of Federal Claims' denial of a claim, in a university trusts' tax refund suit. In affirming, the court held that the securities purchased on margin by otherwise tax-exempt organizations are debt-financed property, and thus, income from an unrelated trade or business, which is subject to the UBIT.

Green Edge Enter., LLC v. Rubber Mulch Etc., LLC., 09-1455, involved a suit for infringement of a patent related to a synthetic mulch that is colored with a water based acrylic colorant to imitate natural mulch.  In reversing, the court held that the district court erred by invalidating a patent, and by dismissing defendant's trademark claims.  The court also reversed as the district court abused its discretion by precluding all damages evidence for the Lanham Act counterclaims.  However, the court affirmed the district court's holding with respect to counterclaims of noninfringement and invalidity of the mark as there was no case or controversy.

Geoddel v. Sugano, 09-1156, concerned a challenge to the Board of Patent Appeals and Interferences' decision that appellee is entitled to the benefit of the filing date of its initial Japanese application in awarding appellee priority as to the counts of both interferences, in two related patent interference priority contests, related to human fibroblasts interferon used in combating pathogens and tumors. In reversing, the court remanded the matter in concluding that the Board's decision that the Japanese Application constitutes constructive reduction to practice of the subject matter of these interferences is not in accordance with law, for the Japanese Application does not meet the criteria of section 112, first paragraph, as to this subject matter.

Related Resources: