US Virgin Islands, Puerto Rico Delegates Seek to Extend Rum Cover Over

By: Caribbean Journal Staff - April 19, 2012

Above: USVI Delegate Donna Christesen and Puerto Rico Resident Commissioner Pedro Pierluisi

By the Caribbean Journal staff

US Virgin Islands Delegate to Congress Donna Christensen has introduced legislation to extend the rum cover over for two years from $10.50 per proof gallon to $13.25.

Christensen was joined by Puerto Rico Resident Commissioner Pedro Pierluisi as a co-sponsor of the bill.

The so-called “rum cover over” means that any excise tax collected on rum imported into the US is transferred or “covered-over” to the US Virgin Islands’ and Puerto Rico’s treasuries.

“Both the Resident Commissioner and I understand the importance of communicating to the Congress that the rum cover over is important to the economies of our territories,” Christensen said. “Despite our differences on other issues related to the cover-over, we stand together as the programmes undergo review before the Ways and Means Committee and re-authorization makes its way through the Congress this year.”

According to the government, the rum cover over has yielded approximately $100 million each year to the Virgin Islands treasury.

That number is expected to rise with increased production from the Cruzan plant and the new Diageo plant, which began production this year.

Proceeds from the cover over are generally used to back bonds for capital improvement projects.

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