MoneyTalk:Legislature Ratified the Agreement between the U.S. Virgin Islands and Cruzan VIRIL, Ltd

The agreement utilizes the rum excise tax “cover-over” program, an economic development tool which returns to the U.S. territories the excise taxes on locally produced rum sold in the United States. The excise tax “cover-over” program, originally established by Congress in 1917 and extended to the U.S. Virgin Islands in 1954, has been an essential part of the economic relationship between the federal government and the U.S. territories for decades. The excise taxes are charged directly to the rum producer and are considered local territorial tax revenues.