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Serko & Simon Important News & Subjects of Current Interest
June 14, 1996
To: Clients of the Firm and Other Interested Parties
IMPORTANT ALERT
HARBOR MAINTENANCE TAX
OPPONENTS ARE ENCOURAGED
BY THE U.S. SUPREME COURT
IN THE IBM CASE
(This is the fourth in a series of ALERTs concerning the Harbor Maintenance Tax (HMT).)
Good news for exporters! On June 10, 1996, the U.S. Supreme Court majority, in a
6-2 decision (with one abstention), in the case of United States v. IBM, Slip Op. 95-591, held
that an Internal Revenue tax on insurance premiums paid to non-U.S. insurance companies
was unconstitutional--- when such tax was applied on export shipments.
In upholding the lower court decisions in favor of IBM, the Supreme Court expressly
refused to change the reasoning it had espoused in a line of similar cases which had held that
taxes on exports, including a tax on insurance on exported goods, were unconstitutional.
This decision has parallels to the Harbor Maintenance Tax case which is currently on appeal
before the U.S. Court of Appeals for the Federal Circuit (CAFC), which had withheld action
on the appeal pending the outcome of the IBM case. It is therefore extremely encouraging
to those, including many of our clients, who have contested the Harbor Maintenance Tax
(HMT) as an unconstitutional tax on exports as the CAFC will look to IBM in deciding the
HMT case appeal.
Accordingly, if any exporters have not taken the appropriate steps to safeguard their
rights with respect to potential refunds of HMT paid in the past, now is the time to do so.
We would be happy to provide you with previous ALERTs on this subject and to discuss the
necessary procedures which should be followed, without further delay, to maximize the
amounts of such refunds which might be realized once the HMT case becomes final.
Sincerely,
SERKO & SIMON
David Serko
For further information, please call us at (800) 46TRADE
or contact us via e-mail below.
EMail: David Serko, Joel Simon, General Inquiries

All material copyright © 1996 by Serko & Simon