Nov. 5, 2007 — Two provisions in the Temporary Tax Relief Act of 2007 passed Thursday by the U.S. House of Representatives Ways and Means Committee positively impact the Virgin Islands, according to Delegate Donna M. Christensen.
The first extends what is commonly called the Rum Tax for another year. This provision returns $13.25 in taxes on a proof gallon of rum to the territory's coffers. The U.S. government collects $13.50 per proof gallon.
Christensen aide Brian Modeste said Monday he did not have a figure for how much money per year the rum tax generates for the territory.
The second puts V.I. taxpayers on an equal footing with mainland taxpayers when it comes to a three-year statute of limitations on audits. The bill concerns people making $75,000 a year and who file their tax returns only in the Virgin Islands. Those making under $75,000 a year were already covered under a previous ruling. The bill is retroactive to 1986.
Without a statute of limitations on audits the territory's Economic Development Commission tax-benefits program was threatened, said Gov. John deJongh Jr. when the House passed the bill. Modeste said a similar bill passed the full house, but the U.S. Senate hasn't acted on the bill. (See "U.S. House Bill Would Correct IRS Ruling on V.I. Taxpayers.")
"They're attempting to use another vehicle to get it enacted," Modeste said.
The bill passed 22 to 13. The bill still has to pass the full house and senate and get signed into law by President George W. Bush.
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