Jan 1 Softwood Lumber Fee on Imports to be Paid Quarterly, Etc.

(On August 3, 2011, an AMS final rule established a Softwood Lumber Research, Promotion, Consumer Education and Industry Information Order, as well as an associated assessment (fee or tax) that begins on January 1, 2012 for domestic and imported softwood lumber. See ITT's Online Archives 11080216 for summary of final rule and 11121605 for most recent reminder.)

Board Expected to Invoice the 100 Importers Affected by the Fee

Board officials state that due the exemptions in the Agricultural Marketing Service final rule, only about 100 of the estimated 1000 importers of softwood lumber are expected to have to pay the fee. Officials state that the Board knows who these importers are, and expects to issue invoices to them in late March or early April 2012 for the first calendar quarter. (Officials state that CBP data will inform the board as to what the 100 importers should be paying.)

Importers' Quarterly Payment to Board Due 30 Days After Quarter Ends

According to AMS regulations, the importer is responsible for paying the fee to the Board no later than the 30th calendar day of the month following the end of the quarter in which the softwood lumber was imported. Those who fail to pay within 60 calendar days of the date that payment is due may be subject to a late payment charge and interest.

Board Would Like CBP to Collect Fees at Some Point

U.S. Customs and Border Protection officials have previously stated that CBP has not programmed ABI for the fee, as "other agencies" are now expected to pay the cost of such programming changes and AMS has not done so. According to Board officials, this cost could range as high as $180,000 as AMS would like CBP to only collect fees from the 100 importers that are required to pay it, not the 900 importers that are exempt; the exemptions themselves are complex; etc. Another complicating factor is that legacy ACS programming resources have been stretched thin for some time.

Instructions to be Issued in January

According to Board sources, the new Softwood Lumber Board held its inaugural meeting on November 29, 2011 and plans to send out instructions on the quarterly payment of fees in January 2012. Sources note that the Board plans to have importers make payment in the same manner as domestic manufacturers.

Highlights of Softwood Lumber Fee Rule

The final rule on the Softwood Lumber Order and fee includes the following provisions affecting imports; however, the Board may choose, at a later time, to apply the fee to exports (see below).

Fees, Reporting, Recordkeeping Begin Jan 1, 2012

AMS states that the fees, reporting, and recordkeeping requirements will begin January 1, 2012.

Imports Subject to Fee Intended to Match Scope of SLA 2008, Each importer of softwood lumber shall pay to the Board a fee on softwood lumber imported into the U.S. as described in Section 804(a) of Title VIII of the Tariff Act of 1930 (which describes the products covered by the softwood lumber importer declaration program under the Softwood Lumber Act of 2008), provided that it can be categorized in the HTS numbers listed below. (See ITT’s Online Archives 10082612 for summary of CBP's final rule, which adopted its 2008 interim final rule without change, on the SLA 2008 requirements.)

HTS Nos. The HTS numbers and fee rate per cubic meter on imported softwood lumber are listed as follows:

(While the initial assessment rate is $0.35 per thousand board feet of softwood lumber imported to the U.S., the factor used to convert one cubic meter to one thousand board feet is 0.423776001. Two years after the Order's effective date and periodically thereafter, the Board will review the assessment rate and, if appropriate, recommend a change in the rate. The assessment rate can be no less than $0.35 per thousand board feet and not more than $0.50 per thousand board feet.)

Reimports subject to Order. Softwood lumber originating in the U.S. that is exported to another country and shipped back to the U.S. is covered by the Order, provided it can be categorized into the HTS numbers listed above.

Certain temporary imports excluded. Articles brought into the U.S. temporarily and for which an exemption is claimed under HTS Chapter 98, Subchapter XIII (articles admitted temporarily free of duty under bond) are not covered under the Order.

Four Exemptions from Fee

The AMS final rule provides four exemptions from the fee (see final rule for complete details on the requirements for each exemption):

15 MBF small shipper exemption. Importers who import into the U.S. less than 15 million board feet of softwood lumber in a fiscal year (FY) are exempt from paying fees.

(If an entity is both a domestic manufacturer and importer, the sum of such entity’s domestic shipments and imports during the FY shall count towards the 15 million board feet exemption.)

Large importer exemption for first 15 MBF. Importers who import 15 million board feet or more per fiscal year shall be exempt from paying fees on their first 15 million board feet of softwood lumber imported during the applicable FY. (The final rule does not mention whether a certificate of exemption is required in this case.)

Organic. An importer who imports only softwood lumber that is eligible to be labeled as 100% organic under the National Organic Program and is not a split operation shall be exempt from the payment of fees.

Exports. Shipments of softwood lumber by domestic manufacturers to locations outside of the U.S. are exempt from assessment. The Board shall establish procedures for approval by the Secretary for refunding fees that may be paid on such shipments and establish any necessary safeguards as deemed appropriate. Safeguard procedures shall be implemented by the Secretary through rulemaking.

In addition, the Board may also recommend to the Secretary that such shipments be subject to fees if it deems appropriate. Such action would be implemented by the Secretary through rulemaking.

Reporting Requirement for Importers Who Pay Fees Directly to Board

For importers who pay their fees directly to the Board, the following shall accompany the payment of collected fees within 30 calendar days after importation: (i) name, address and telephone number of the importer; (ii) board feet of softwood lumber imported; (iii) board feet of softwood lumber for which fees were paid; and (iv) country of export.

(See final rule for further details on the Softwood Lumber Board, domestic manufacturer fees and exemptions, etc.

See ITT’s Online Archives 11080216 for initial summary of AMS final rule. See ITT's Online Archives 11093002 for initial reminder on this new fee; other reminders were issued monthly.)

AMS final rule (FR Pub 08/02/11) available here.