76 F
Cruz Bay
Monday, February 26, 2024


Feb. 2, 2004 – The territory could get some encouraging financial news next week when the U.S. Senate is tentatively scheduled to consider a measure to eliminate the cap for a year on the portion of federal rum excise taxes returned to the Virgin Islands.
Gov. Charles W. Turnbull announced on Monday that the U.S. Senate Finance Committee has included language in a federal highway reauthorization bill to eliminate the cap for the year 2005, allowing the Virgin Islands to receive the full $13.50 per proof gallon tax.
Advantages from the bill would be twofold. "This is an important advance in our long-standing efforts to eliminate the tax," Turnbull said. The territory would gain an additional $40 million in needed revenues over a two-year period, and the move would "set the stage for a permanent fix," he said.
The rum provision would temporarily extend the current formula whereby the territory receives $13.25 per proof gallon of rum shipped to the mainland, while the U.S. Treasury keeps 25 cents of the excise tax.
The battle to retrieve a greater share of the tax has been going on for years. Congress first imposed the tax in 1984, in response to a scheme developed by Puerto Rico to "redistill" alcohol originally distilled on the U.S. mainland in order to increase the commonwealth government's share of the federal taxes. (See "Extending V.I. rum benefit wins House OK".)
As part of that 1984 legislation , Congress shut down the "redistillation" program and set the portion of rum taxes to be returned to Puerto Rico and the Virgin Islands at $10.50. It was later raised to $11.30 and then, in 1999, to the current $13.25.
An aide to Delegate Donna Christensen said on Monday that she had not yet made an announcement concerning the pending rum tax measure.

Back Talk

Share your reaction to this news with other Source readers. Please include headline, your name, and the city and state/country or island where you reside.

Publisher's note : Like the St. Croix Source now? Find out how you can love us twice as much — and show your support for the islands' free and independent news voice … click here.

Print Friendly, PDF & Email
Keeping our community informed is our top priority.
If you have a news tip to share, please call or text us at 340-228-8784.

Support local + independent journalism in the U.S. Virgin Islands

Unlike many news organizations, we haven't put up a paywall – we want to keep our journalism as accessible as we can. Our independent journalism costs time, money and hard work to keep you informed, but we do it because we believe that it matters. We know that informed communities are empowered ones. If you appreciate our reporting and want to help make our future more secure, please consider donating.