Solar Flare-Up: Back Tax Roils U.S. Firms

by Cassandra Sweet, Wall Street Journal, August 24, 2012

U.S. businesses that bought solar panels made in China earlier this year are retroactively being hit with unexpected tax bills, as they find themselves caught in the middle of a trade fight between U.S. and Chinese manufacturers.

The unusual bills are the result of action by the U.S. Commerce Department, which slapped provisional antidumping duties of between 31% and nearly 250% on solar panels containing Chinese-made solar cells in May.

U.S. businesses that bought solar panels made in China earlier this year are retroactively being hit with unexpected tax bills, as they find themselves caught in the middle of a trade fight between U.S. and Chinese manufacturers. Cassandra Sweet has details on The News Hub.

The U.S. government imposed the tariffs in response to a trade case started last year by the U.S. arm of German company SolarWorld AG and six small U.S. solar firms. They accused Chinese solar-panel makers of receiving unfair government subsidies and selling their products in the U.S. at prices below the cost of production.

The trade case has stirred tensions between Washington and Beijing and divided the U.S. solar industry. It is also resulting in large import-tax bills for dozens of U.S. companies, many small and medium-sized, that bought solar panels from Chinese suppliers as much as three months before the trade decisions were issued. The Commerce Department made the tariffs retroactive by 90 days.

Chinese workers manufactured solar panels to be exported to the U.S. at a Tianxiang Group plant in March.

Marco Mangelsdorf, who co-owns a company in Hawaii, ProVision Solar Inc., that designs and installs rooftop solar-panel systems, has been fuming since he received a tax bill in June from U.S. Customs, saying that he owed more than $138,000. That is 250% more than what he paid for a shipment of panels he received in February from a Chinese supplier.

Mr. Mangelsdorf said he wasn't aware the tariffs could be retroactive, or so steep.

"If I had any clue that I would be on the hook for a 200-plus percent duty on this order, I would be a crazy man" to make it, Mr. Mangelsdorf said.

William Perry, a Seattle attorney who has been representing some of the companies facing the tariffs, has estimated that U.S. firms that imported Chinese solar panels could be on the hook for roughly $100 million in new import taxes....

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