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Charlotte Amalie
Thursday, August 18, 2022
HomeNewsArchivesRum Cover-Over Passes Senate as Part of Tax Package

Rum Cover-Over Passes Senate as Part of Tax Package

The rum cover-over extender, which provides about $20 million annually to the U.S. Virgin Islands, passed the U.S. Senate Wednesday afternoon as a part of President Obama’s $858 billion tax cut measure.

The measure passed by a vote of 81 to 19. The bill is expected to come back to the U.S. House of Representatives for a final vote before the end of the week, according to a news release from Delegate Donna Christensen.

The rum cover-over usually is routinely approved, but it has come under increased public scrutiny and congressional challenge over the last two years after the V.I. government inked deals with Diageo and Fortune Brands to use cover-over proceeds as part of 30-year deals for the expansion of production capabilities on St. Croix.

Congressional challenges from both Puerto Rico Resident Commissioner Pedro Pierluisi and Sen. Robert Menendez (D-NJ) would limit how the territories utilize the funding if enacted into law. Neither of those measures has received a hearing and will die when the current Congress adjourns at the end of the month.

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“I am pleased that our rum cover-over extension is closer to passage,” Christensen said. While expressing certain misgivings about the overall tax package, Christensen said, “This is decidedly good for the economy of both Puerto Rico and the U.S. Virgin Islands.”

Christensen pointed out that Puerto Rico receives about $80 million a year from the extender.

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The rum cover-over extender, which provides about $20 million annually to the U.S. Virgin Islands, passed the U.S. Senate Wednesday afternoon as a part of President Obama’s $858 billion tax cut measure.

The measure passed by a vote of 81 to 19. The bill is expected to come back to the U.S. House of Representatives for a final vote before the end of the week, according to a news release from Delegate Donna Christensen.

The rum cover-over usually is routinely approved, but it has come under increased public scrutiny and congressional challenge over the last two years after the V.I. government inked deals with Diageo and Fortune Brands to use cover-over proceeds as part of 30-year deals for the expansion of production capabilities on St. Croix.

Congressional challenges from both Puerto Rico Resident Commissioner Pedro Pierluisi and Sen. Robert Menendez (D-NJ) would limit how the territories utilize the funding if enacted into law. Neither of those measures has received a hearing and will die when the current Congress adjourns at the end of the month.

“I am pleased that our rum cover-over extension is closer to passage,” Christensen said. While expressing certain misgivings about the overall tax package, Christensen said, “This is decidedly good for the economy of both Puerto Rico and the U.S. Virgin Islands.”

Christensen pointed out that Puerto Rico receives about $80 million a year from the extender.