Delegate Donna Christian-Christensen will ask U.S. Customs to stop confiscating cigarettes purchased in the Virgin Islands by U.S. residents until an amendment to a 1997 law can be drafted and passed.
Christensen met with a group of St. Thomas retailers and wholesalers Friday evening to give them the "bad news": The Bureau of Alcohol, Tobacco, and Firearms said Thursday it would not budge on the law, which says that tobacco produced in the United States for "export only" and sold abroad cannot be brought back into the United States.
The Source learned earlier this week that cruise passengers were being told aboard their ships that they would not be allowed to take U.S. tobacco products purchased in the Virgin Islands back home. The loss of revenues to the V.I. government from tobacco sales has been estimated at up to $20 million per year.
Dominick Codispot of West Indies Corp. said WICorp. pays the V.I. government $1 million a year in excise and gross receipts taxes on tobacco. And the government's gross receipts tax revenues are doubled for tobacco: The wholesalers pay it and the retailers pay it again.
U.S. Customs allows U.S. tourists to take up to five cartons of cigarettes purchased in the Virgin Islands home duty free.
There is a conflict with two overlapping statutes, according to a lawyer for the V.I. government.
What has happened in the last week is "an overly broad interpretation" of a law that was intended to prevent the commercial re-importation of duty-free cigarettes to be sold back in the United States, according to V.I. lobbyist Peter Hiebert of the Washington, D.C., law firm of Winston and Strawn.
Christensen said the officials she met with Thursday from the Bureau of Alcohol, Tobacco and Firearms and Customs agreed the law was not directed at tobacco purchased for personal use. But since the law is not clear on that point, enforcement must continue, the officials told the delegate.
She said the law cannot be changed administratively. "Even the White House" can't help, she said; it will take an act of Congress to amend the law.
The "good news" is that corrective legislation has already been drafted. "They are awaiting a vehicle to which it can be attached," Christensen said.
Meantime, she has asked high-ranking members of Congress to send letters to Treasury Secretary Lawrence Sommers asking that the legislation be retroactive to the enforcement implementation date. If that happens, she said, the confiscation would stop.
One of those high-ranking officials is Charles Rangel, ranking member of the House Ways and Means Committee. Christensen said she had not received a response from Rangel, but he was on his way to the Virgin Islands Friday night to attend a fund-raising event Saturday night.
All parties involved seem to agree that the way the law was written far exceeds what it was intended to accomplish, Christensen said.
