Gov. Kenneth Mapp made a formal request Wednesday to the Office of Insular Affairs to release $209.4 million in anticipation of the U.S. Senate approving an extension of the rum cover-over.
According to a release issued Thursday afternoon by Government House, the advance for Fiscal Year 2016 would be based on an estimated collection of $213 million on 16.1 million proof gallons of alcoholic beverage produced in the territory by Cruzan VIRIL and Diageo USVI and imported and sold in the United States.
The rate provided to the territory on federal excise taxes collected on the rum is $13.25 per proof gallon. The FY14 adjustment is $3.9 million, for a net advance remaining of $209.4 million.
The current enacted rate is $10.50, but on July 21 the Senate Finance Committee approved legislation to extend certain expired tax provisions, including the temporary additional rate of $2.75 per proof gallon for an additional two years, retroactive to Jan. 1.
The full Senate is expected to approve the bill shortly and the House of Representatives is expected to approve it before the end of the year, keeping the total rate at $13.25.
In his request to Director Charlene Leizear at the Office of Insular Affairs, Mapp said providing the advance based on the full $13.25 rate would be a boost to the territory.
“Congress has regularly and seamlessly approved the temporary $13.25 price per gallon cover-over rate since 1999," he said. "Approval of the advance based on the $13.25 rate will greatly assist the government in managing its cash flow and providing essential public services to the people of the Virgin Islands."
