Taxes that discriminate based on gender and age have come under Constitutional attack in recent decades and today are relatively rare. Defying this trend, however, the Harmonized Tariff Schedule of the United States (HTS) still contains dozens of provisions that discriminate in the taxation of imported merchandise based on the gender or age of the intended user. In Totes-Isotoner Corp. v. United States and more than 150 pending lawsuits, importers have challenged these discriminatory rates, contending that no sufficient justification exists for Congress? disparate treatment of similar goods. To date, the Federal courts have struggled with the question of what type of allegations importers must plead in order to state a prima facie challenge to these discriminatory rates. Is the discrimination evident on the face of the statute, which ordinarily shifts to the government the burden of justification? Or, because modern tariff schedules are based on internationally agreed nomenclatures and duty rates reflect concessions made in multilateral agreements, are tariff laws a “breed apart” to which a special standard should be applied? The Totes-Isotoner case shows that the Federal courts are confused and somewhat divided on this basic issue and that the United States Supreme Court may need to identify the standards of pleading applicable to Totes and similar lawsuits.
Global Trade and Customs Journal