Excise tax on certain tariff refunds

(a) In general Chapter 42 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subchapter: I Excise Tax on Certain Tariff Refunds Sec. 4969. Excise tax on certain tariff refunds. 4969. Excise tax on certain tariff refunds (a) In general There is hereby imposed on each covered taxpayer for the taxable year a tax in an amount equal to 100 percent of the non-qualifying tariff refunds received by such taxpayer. (b) Exception for costs not passed On to consumers (1) In general Subsection (a) shall not apply with respect to a covered taxpayer if such taxpayer can demonstrate that any increase in price of products sold by the taxpayer during the covered period did not exceed 50 percent of the amount of the tariffs imposed on such products on any input used by the taxpayer to produce such products. (2) Covered period For purposes of paragraph (1), the term covered period means the period beginning on January 20, 2025, and ending on the date on which a covered court order is issued. (3) Treatment of price increases attributable to inflation For purposes of paragraph (1), the amount of the increase in the retail price of any product shall be determined without regard to so much of such increase as is attributable to inflation. (c) Definitions For purposes of this section— (1) Covered court order The term covered court order has the meaning given such term in section 6436. (2) Covered taxpayer The term covered taxpayer means a corporation or taxpayer which does not meet the gross receipts test of section 448(c), determined by substituting $1,000,000,000 for $25,000,000 in paragraph (1) thereof. (3) Non-qualifying tariff refund For purposes of this section, the term non-qualifying tariff refund means a repayment made pursuant to a covered court order of tariff revenues which were collected from the taxpayer in the course of the trade or business of such taxpayer.. (b) Clerical amendment The table of subchapters for chapter 42 of such Code is amended by adding at the end the following new item: I. Excise Tax on Certain Tariff Refunds. (c) Effective date The amendments made by this section shall apply to amounts received after December 31, 2025.