Pax's AI-powered tariff refunds
Penny Chen, CEO of Pax, on building AI-powered tariff refunds
Pax’s edge is less about handling thousands of local tax jurisdictions, and more about turning a narrow but operationally messy federal program into software. Duty drawback in the US runs through one customs regime, but the hard part is that tariff rates, HTS codes, eligibility rules, and filing procedures still move enough to break manual workflows. Because drawback rules themselves change more slowly than sales tax, fast software updates become a practical distribution advantage, not a never ending compliance fire drill.
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The closest comparison is not Avalara’s map of city and state tax rates. It is software that sits on top of a single federal process but must stay current with rule updates from CBP. Pax’s users are brokers and drawback specialists who upload invoices, bills of lading, and ERP exports, then use the product to classify goods, match imports to exports, calculate refunds, and file claims electronically.
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That matters more right now because US policy is moving the market. In 2025, CBP clarified that new reciprocal tariffs are eligible for drawback, and also published additional USMCA drawback and duty deferral rules. Those changes increase the value of keeping the engine current, but they are still changes inside one national framework, not thousands of independent jurisdictions.
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The broader competitive pattern does resemble tax SaaS. Incumbents rely on manual analysts and old software, which limits them to large claims. Pax uses AI for document extraction and deterministic algorithms for the actual refund math, which lowers labor per claim and lets it serve smaller customers. Flexport is pushing in the same direction with automated drawback and customs tooling.
The next step is that drawback software starts to look less like a niche refund tool and more like core trade infrastructure. As tariffs stay elevated and customs rules keep shifting at the federal level, the winners will be the systems that update quickly, plug into brokers and importers, and turn compliance work into a repeatable software workflow for companies well below the Fortune 500.