Nov. 10, 2007 — The U.S. House of Representatives Friday passed a bill that extends the return of $13.25 in rum tax money to the territorial government and sets a three-year statute of limitations on audits of tax returns for people making more than $70,000 a year.
The provisions were included in the Temporary Tax Relief Act of 2007, which passed the House on a vote of 216 to 193.
The tax bill now must pass muster with the U.S. Senate and President Bush before it becomes law.
"The bill is now moving to the U.S. Senate where it will face a difficult challenge, but the House of Representatives has again spoken loudly on this issue of fairness for Virgin Islanders," Gov. John deJongh Jr. said in a news release issued Friday.
If the bill makes it through the Senate and the White House, it will ensure that the territory continues to get millions of rum tax dollars. The federal government returns all but 25 cents it collects on rum manufactured in the Virgin Islands but sold on the mainland.
In 2006, the rum tax generated $70.9 million. Through August of this year, the figure stood at $81 million.
The second provision puts V.I. taxpayers on a par with mainland taxpayers when it comes to a three-year statute of limitations on audits. Without that provision, the territory's Economic Development Commission tax benefits package suffers.
"Our goal is to restore investor and congressional confidence in the integrity of our tax system while standing firm in our commitment to fairness for all of our taxpayers," deJongh said.
Congress last year rescinded the three-year audit provision for V.I. residents.
He said the territory will continue to lobby the U.S. Treasury Department and Congress so they understand that V.I. residents should be treated the same as those on the mainland.
"We will defend our rights to economic development, but we will not tolerate any form of abuse of the tax system," the governor said.
According to Delegate Donna M. Christensen, the bill also provides 30 million U.S. homeowners with property tax relief, helps 12 million children by expanding the child tax credit, helps 4.5 million families better afford college with the tuition deduction, saves 3.4 million teachers money with a deduction for classroom expenses, and provides thousands of American troops in combat with tax relief under the Earned Income Tax Credit.
Back Talk
Share your reaction to this news with other Source readers. Please include headline, your name and city and state/country or island where you reside.
