CBP Duty Interest: How It Is Computed on Bills and Refunds

Key Points

• CBP charges interest on underpaid duties and pays interest on overpaid duties under 19 U.S.C. 1505(c) and (d), using the same quarterly rates the IRS publishes for underpayments and overpayments.
• Interest on a supplemental duty bill runs from the date the duty was originally deposited, not from the date of liquidation or the date the bill is issued.
• Interest on a refund (including a protest-driven refund) generally runs from the date of deposit of the excess duties paid.
• CBP compounds interest daily, so the time between entry filing and final resolution materially affects the total amount owed or returned.
• The governing regulation is 19 CFR 24.3a, which sets out the mechanics for both underpayment and overpayment interest computations.

On this page

1. What CBP duty interest is and why it matters
2. The statutory framework: 19 U.S.C. 1505(c) and (d)
3. How the interest rate is set and updated
4. Computing interest on a supplemental duty bill
5. Computing interest on a duty refund or overpayment
6. Practical factors that affect the interest amount
7. What importers should do
8. Key references

When CBP liquidates an entry at a higher duty amount than the importer deposited, it issues a supplemental bill that includes interest calculated from the original deposit date. When CBP owes money back, it adds interest to the refund on the same logic. The interest rate is not set by CBP; it tracks the IRS quarterly underpayment or overpayment rate and compounds daily.

The links in this article go to the primary documents: the statutes, regulations, and official agency pages themselves. Read the source.

What CBP duty interest is and why it matters

Customs entries are often liquidated months or years after the goods arrive. During that window, the government may have been holding either too little or too much money. Interest is the mechanism that compensates whichever party was disadvantaged by the timing gap.

For importers, interest on supplemental bills can be a significant line item, especially when:

• An AD/CVD cash deposit rate is later increased by a review.
• A Section 301 or Section 232 tariff exposure is identified long after entry.
• A classification or valuation error is discovered during a CBP audit or a focused assessment.

Conversely, importers who overpaid (for example, because a tariff exclusion was granted retroactively) are entitled to interest on the refunded amount. Understanding both sides of the calculation helps importers accurately forecast cash exposure and recovery value.

If your potential refund involves a protest or litigation, the interest calculation also runs through that period. For context on the protest-to-court timeline, see our guide on protest denial and the 180-day road to the Court of International Trade.

The statutory framework: 19 U.S.C. 1505(c) and (d)

19 U.S.C. 1505 governs payment and collection of customs duties, and subsections (c) and (d) address interest specifically.

Subsection (c): interest on underpayments

Under 19 U.S.C. 1505(c), if the amount deposited as estimated duties is less than the amount determined to be due at liquidation or reliquidation, CBP assesses interest on the underpayment. The interest period begins on the date the importer made the original duty deposit and runs through the date of liquidation or reliquidation.

Subsection (d): interest on overpayments

Under 19 U.S.C. 1505(d), if the amount deposited exceeds the amount due, CBP pays interest on the overpayment. The interest period begins on the date of the deposit of the excess amount and runs through the date of the refund check or electronic payment.

Both subsections tie the applicable rate to the IRS underpayment and overpayment rates established under the Internal Revenue Code. CBP does not set an independent customs interest rate.

How the interest rate is set and updated

The IRS publishes its underpayment and overpayment rates quarterly in the Internal Revenue Bulletin. CBP adopts those rates directly for customs interest purposes under 19 CFR 24.3a.

Key features of the rate mechanism:

• Quarterly updates: The rate can change every calendar quarter (January, April, July, October). A multi-year underpayment or overpayment will therefore accumulate interest at different rates in different quarters.
• Daily compounding: 19 CFR 24.3a specifies that interest compounds daily. This means each day's interest is added to the principal before the next day's interest is calculated. Over months or years, daily compounding produces a materially higher total than simple interest would.
• Same rate for both directions: The statute links underpayment interest and overpayment interest to the corresponding IRS rates, which are typically the same or differ by only a small margin.

To find current and historical quarterly rates, CBP links to the IRS quarterly rate announcements from its Revenue page at cbp.gov. The IRS also publishes each quarter's rate in the Internal Revenue Bulletin.

Computing interest on a supplemental duty bill

When CBP liquidates an entry and determines that more duties are owed than were deposited, it issues a supplemental bill. That bill includes both the principal underpayment and the accrued interest.

The interest start date

Interest accrues from the date of the original duty deposit, not from the date CBP issues the bill, and not from the liquidation date. This is an important distinction: importers who receive a supplemental bill years after entry will owe interest covering the entire intervening period, even if they were not aware of the underpayment during that time.

The interest end date

Under 19 U.S.C. 1505(c), interest on an underpayment runs through the date of liquidation or reliquidation, not the payment due date on the bill.

The daily compounding mechanics

Because interest compounds daily using the applicable quarterly IRS rate, the total interest owed is the result of applying the daily periodic rate (the annual rate divided by 365) to the outstanding principal each day, then adding that day's interest to the running balance before applying the next day's rate. When quarterly rates change mid-period, the computation resets to the new rate at the start of each new quarter, applied to the balance accumulated through the end of the prior quarter.

Computing interest on a duty refund or overpayment

An overpayment can arise from several situations: an entry liquidated at a lower duty rate than deposited, a successful protest, a retroactive tariff exclusion, or a voluntary prior disclosure that resolves in the importer's favor.

The interest start date for refunds

Under 19 U.S.C. 1505(d), interest on the refunded amount begins on the date CBP received the deposit of the excess duties. For most entries, that is the date the importer's estimated duty payment was made at entry filing, not the liquidation date and not the protest approval date.

Why refund interest matters for large duty recovery projects

When an importer recovers duties paid over multiple years, the interest component of the refund can be substantial, because the daily compounding clock ran from each original payment date. Importers evaluating whether to file for a refund should factor in the expected interest recovery as part of the total value of the claim. For more on what a structured duty refund review can surface, see our article on what a duty refund review returns.

Practical factors that affect the interest amount

Several variables outside the rate formula influence how much interest accumulates:

• Length of the liquidation cycle: Entries subject to AD/CVD reviews can remain unliquidated for several years. A longer open period means more daily compounding cycles.
• Suspension of liquidation: When CBP suspends liquidation (for example, due to a court injunction or an ongoing AD/CVD review), the interest clock continues to run under the statute. Suspension does not pause interest accrual.
• Protests and reliquidation: A successful protest results in reliquidation, and the refund interest runs from the original deposit date through the reliquidation date. An unsuccessful protest followed by litigation at the Court of International Trade extends the period further if the importer ultimately prevails.
• Entry amendments and post-summary corrections: If an importer files a post-summary correction that increases the duty owed before liquidation, the interest period still begins from the original deposit date, but the principal on which interest accrues is the difference between the corrected amount and the original deposit.
• Quarterly rate fluctuations: A long-running underpayment or refund will pass through multiple quarterly rate periods. Rising IRS rates increase the cost of outstanding underpayments; falling rates reduce it.

What importers should do

• Model interest exposure early. When a classification error, valuation issue, or tariff reclassification is identified, calculate the full interest exposure from the original deposit dates, not just the principal underpayment. Use 19 CFR 24.3a and the applicable quarterly IRS rates as inputs.
• Track liquidation dates for open entries. Because interest on supplemental bills runs from the deposit date to the liquidation date, monitoring when entries are scheduled to liquidate helps you anticipate when a bill will issue and how large the interest component will be.
• Include interest in refund value assessments. Before deciding whether to file a protest or pursue a refund, calculate the interest the government owes on the overpayment from each original deposit date. That amount belongs to the importer and is part of the total recovery.
• Reconcile CBP's interest computation against your own. When CBP issues a supplemental bill, verify that the interest start date, the principal base, and the quarterly rates applied match your own records. Errors in any of those inputs can produce an incorrect bill.

Key references

• 19 U.S.C. 1505: The statute governing payment, collection, and interest on customs duties, including subsections (c) (underpayments) and (d) (overpayments).
• 19 CFR 24.3a: The CBP regulation implementing the interest computation, including daily compounding and the adoption of IRS quarterly rates.
• CBP Revenue page (cbp.gov): CBP's hub for duty payment guidance, including links to current interest rate information.
• Federal Register (federalregister.gov): Source for CBP and Treasury rulemaking related to duty collection and interest procedures.