Bill > S1938

This bill amends the Internal Revenue Code to modify how taxes on distilled spirits, particularly rum, are handled for Puerto Rico and the U.S. Virgin Islands. Specifically, the bill removes previous limitations on covering over (transferring) distilled spirits taxes to these territories. It requires Puerto Rico to transfer a portion of rum taxes collected at rates of $10.50 or higher per proof gallon to the Puerto Rico Conservation Trust Fund, with the transfer amount calculated based on the tax rate. The Conservation Trust Fund, established in 1968, focuses on conserving natural areas in Puerto Rico through sustainable agriculture, reforestation, and habitat restoration efforts. The bill applies these changes to distilled spirits brought into the United States after December 31, 2021, and includes technical amendments that retroactively adjust rules for determining tax cover-overs. A "proof gallon" is a standard measurement in alcohol taxation representing a gallon of liquid at 100 proof (50% alcohol content). These changes aim to provide more financial support and environmental conservation mechanisms for Puerto Rico while streamlining the tax transfer process.

Budget and Finance

https://www.congress.gov/bill/119th-congress/senate-bill/1938/all-info