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HomeNewsArchivesHOUSE LIKELY TO EXTEND RUM TAX REBATE

HOUSE LIKELY TO EXTEND RUM TAX REBATE

Oct. 13, 2001 — The U.S. House of Representatives is expected to approve an extension of the current rate of the federal tax rebate that flows to the territory from V.I. rum sales on the mainland, providing an infusion of about $70 million a year into the local treasury, Delegate Donna Christian Christensen said Friday.
She said an extension of the rum cover-over for the Virgin Islands is included in the national economic stimulus package being worked on in the House Ways and Means Committee. The measure, expected to go to the floor of the House next week, would extend the current rebate of $13.25 per proof gallon, now scheduled to expire Dec. 31, for two more years. If the cover-over is not extended, the rebate rate will revert to its previous level of $10.50.
Under a congressionally mandated program for V.I. development, excise taxes on V.I. rum shipped to the U.S. mainland are rebated to the local treasury. This money currently accounts for more than 15 percent of the territory's total revenues, Christensen said, making it second only to tourism in generating funds for the V.I. government.
Last year, more than $70 million in federal rum taxes flowed into the territory's coffers. Without the rebate extension, Christensen said, the territory would lose between $15 million and $20 million a year in revenues.
She said she will continue to work toward getting Congress to lift the rum-tax rebate cap, which would pave the way for a permanent increase on the rate of rum revenues sent to the territory.
Assuming Congress approves the current economic stimulus measure, "We now have two years to work to that end," she said.
"I am grateful for the broad bipartisan support that our rum extension has received," she said, citing the Ways and Means Committee chair, Rep. Bill Thomas; the Trade Subcommittee chair, Rep. Phil Crane; and Ways and Means Committee ranking Democrat Charles Rangel. "Working with Gov. Turnbull and his Washington counsel, we were able to secure the strong support of Chairman Crane for our rum extension early on, which made today's action possible," she said.

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Oct. 13, 2001 -- The U.S. House of Representatives is expected to approve an extension of the current rate of the federal tax rebate that flows to the territory from V.I. rum sales on the mainland, providing an infusion of about $70 million a year into the local treasury, Delegate Donna Christian Christensen said Friday.
She said an extension of the rum cover-over for the Virgin Islands is included in the national economic stimulus package being worked on in the House Ways and Means Committee. The measure, expected to go to the floor of the House next week, would extend the current rebate of $13.25 per proof gallon, now scheduled to expire Dec. 31, for two more years. If the cover-over is not extended, the rebate rate will revert to its previous level of $10.50.
Under a congressionally mandated program for V.I. development, excise taxes on V.I. rum shipped to the U.S. mainland are rebated to the local treasury. This money currently accounts for more than 15 percent of the territory's total revenues, Christensen said, making it second only to tourism in generating funds for the V.I. government.
Last year, more than $70 million in federal rum taxes flowed into the territory's coffers. Without the rebate extension, Christensen said, the territory would lose between $15 million and $20 million a year in revenues.
She said she will continue to work toward getting Congress to lift the rum-tax rebate cap, which would pave the way for a permanent increase on the rate of rum revenues sent to the territory.
Assuming Congress approves the current economic stimulus measure, "We now have two years to work to that end," she said.
"I am grateful for the broad bipartisan support that our rum extension has received," she said, citing the Ways and Means Committee chair, Rep. Bill Thomas; the Trade Subcommittee chair, Rep. Phil Crane; and Ways and Means Committee ranking Democrat Charles Rangel. "Working with Gov. Turnbull and his Washington counsel, we were able to secure the strong support of Chairman Crane for our rum extension early on, which made today's action possible," she said.