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The Other Big Story This Week: Rum Tax


U.S. Virgin Islands

The economic crisis has been dominating the news as well as the attention of politicians; however, this last Tuesday night a bill was passed in the Senate relating to rum taxes and the U.S. Virgin Islands. The bill says that the U.S. Virgin Islands and Puerto Rico will receive $13.25 for each proof (a liquid gallon consisting of 50% alcohol) gallon of rum produced in the U.S. Virgin Islands and sold in the United States. The bill, S. 2886, extends a previous tax arrangement that lasted from July 1, 1999 to December 31, 2007. The bill is retroactive to January 1, 2008, and extends the 1999 arrangement to December 31, 2009.

Here is link to the bill.

Caribbean Net News reports that, “The measure had been held up for over a year as a result of a long-standing dispute between Republicans and Democrats over the issue of whether the tax ‘extender’ provisions had to be off-set with other tax increases or spending cuts under Congressional budget rules.” The bill must also pass in the House of Representatives, and I haven’t found any information saying it has, but that isn’t to say it hasn’t, it just means I’ve lost the will to continue wading through the endless sea of information supporting our legislative system.

This tax provision means approx. 20 million dollars annually for the U.S. Virgin Islands, who are currently trying to expand its rum production industry.


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