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Charlotte Amalie
Friday, July 19, 2024


The Virgin Islands was dealt a legislative blow Wednesday when the House Ways and Means Committee dropped language from a bill that would permanently lift a ban on duty-free cigarettes entering the mainland United States from the territory.
The cigarette provision was part of a trade bill before the committee and had survived a subcommittee vote Monday evening, Delegate to Congress Donna Christian Christensen said. She said the cigarette language was struck from the bill because members wanted to put in additional language concerning cigarettes that would affect their districts.
However, committee Chairman Bill Archer opposed adding new language, she said, and as a result he decided to remove all cigarette provisions from the bill.
The tobacco ban represents a loss of revenue to the V.I. that has been estimated at up to $20 million per year.
"I am very disappointed at this latest development, especially because on Monday it looked like we were home free," Christensen said, adding, however, that she had gotten an inkling of possible trouble.
She said Rep. Charles Rangel told her the cigarette provision was in jeopardy during the Congressional Black Caucus’ weekly lunch meeting but it was not until the bill was brought up for a vote in the committee at 3 p.m. Wednesday that the "concerns were realized," she said.
American cigarettes brought into the territory for resale are exempt from the Internal Revenue Tax and from duty. But a law enacted in 1997 that went into effect earlier this year makes it illegal to bring American tobacco back into the country if it bears a stamp saying it was originally sold for export only.
In February the Source learned that cigarettes and tobacco products with the "for export only" stamp being sold to tourists in the Virgin Islands were being confiscated as they disembarked at points of entry in the United States. The tourists were told to put their cigarettes into bins as they went through Customs.
The tourists were caught in a law that began to be implemented in January to prevent large commercial wholesalers from re-importing tobacco products. Tobacco marked "for export only" is exempt from the Internal Revenue Tax and Customs duty.
In April, a federal judge ordered the U.S. Treasury Department to stop enforcing the ban on cigarettes for personal use into the U.S. The court order allows the re-importation of cigarettes purchased up to the limit allowed by the personal use exemption, which is up to five cartons of cigarettes.
That injunction bought the territory time to have the 1997 legislation reworded.
"Everyone acknowledges and agrees that there was never any intention of banning ‘duty free’ cigarettes from coming into the U.S.," Christensen said. "The only thing left is to find the appropriate legislative vehicle to permanently lift the ban."
Meanwhile, she said the court injunction remains in place and will be for some time to come, and a provision to permanently lift the ban is included in the Ways and Means Committee bill of "technical corrections" that must be passed into law before the end of the year.

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