Based on data released last week, continued GSP expiration cost American importers another $55 million in November 2014. For New Mexico, November 2014 was the most costly month yet in terms of unnecessary taxes paid because of GSP expiration, driven largely by above average imports of jewelry from the Philippines and Turkey.
From August 2013 to November 2014, companies paid an estimated $902 million in higher taxes because of GSP expiration. At $134 million through 16 months, California importers paid the most because of GSP expiration, followed by those in New Jersey ($82 million), Texas ($77 million), and New York ($64 million). GSP expiration has raised taxes on companies in new Senate Majority Leader Mitch McConnell’s home state of Kentucky by $25 million. In total, companies in 41 states plus Puerto Rico have paid at least $1 million because GSP remained expired.
The average tax faced because of GSP expiration was 3.7 percent, but companies in some states paid significantly higher rates. Rhode Island companies have faced average taxes on imports because of GSP expiration (7.1 percent), followed by Montana (5.8 percent) and new Senate Finance Committee Chairman Orrin Hatch’s home state of Utah (5.2 percent). Utah’s above-average rate is driven by high taxes on imports of bikes from Cambodia.
Given an average daily cost of $1.85 million, the direct cost of GSP expiration on American companies is expected to top $1 billion on January 22. These taxes have taken a terrible toll on companies, as shown by a survey last fall. It is critical that the new Congress pass an immediate, retroactive GSP renewal so that companies can stop paying, and start the refund process for, these unnecessary taxes.