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119-s-1938119th CongressWALLET

A bill to amend the Internal Revenue Code of 1986 to modify the cover over of certain distilled spirits taxes.

Sponsored By: Senator Cassidy, Bill [R-LA]

Introduced

Summary

Redirects part of U.S. rum excise tax revenue into a dedicated Puerto Rico Conservation Trust Fund. The bill repeals a prior limit on how much distilled spirits tax revenue can be "covered over" to Puerto Rico and the U.S. Virgin Islands and creates a formula requiring Puerto Rico to transfer a portion of its rum cover-over into the Trust Fund.

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  • Territories: Repeals the existing limitation on cover over of distilled spirits taxes to Puerto Rico and the U.S. Virgin Islands, expanding the scope of rum tax transfers to those territories.
  • Puerto Rico Conservation Trust Fund: For rum taxed at rates equal to or above $10.5 per proof gallon, Puerto Rico must transfer at least one-sixth of the difference between $10.5 and the applicable rate to the Trust Fund, with a cap of $13.3 per proof gallon. The fund is defined to conserve natural areas, including sustainable agriculture and reforestation and restoration of habitats.
  • Timing and legal alignment: The amendments apply to distilled spirits brought into the United States after December 31, 2021 and include retroactive alignment with specified prior laws. Puerto Rico’s obligation to make the transfer does not alter payment priorities established under Puerto Rico law as of December 31, 2022.

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Bill Overview

Analyzed Economic Effects

1 provisions identified: 0 benefits, 0 costs, 1 mixed.

New rules for rum tax transfers

This bill would change how distilled spirits taxes are sent to U.S. territories. It would repeal the legal limit on cover-over to Puerto Rico and the U.S. Virgin Islands for spirits brought into the U.S. after December 31, 2021. It would also require Puerto Rico to transfer to the Puerto Rico Conservation Trust Fund at least one-sixth of the difference between $10.50 and the cover-over rate per proof gallon when the rate is at least $10.50, with a per-proof-gallon cap of $13.25. The bill would treat certain earlier cover-over rule changes as if they had taken effect in specified older laws.

Sponsors & CoSponsors

Sponsor

Cassidy, Bill [R-LA]

LA • R

Cosponsors

  • Sen. Gillibrand, Kirsten E. [D-NY]

    NY • D

    Sponsored 6/4/2025

  • Sen. Wicker, Roger F. [R-MS]

    MS • R

    Sponsored 6/4/2025

  • Sen. Luján, Ben Ray [D-NM]

    NM • D

    Sponsored 6/4/2025

  • Sen. McConnell, Mitch [R-KY]

    KY • R

    Sponsored 6/9/2025

Roll Call Votes

No roll call votes available for this bill.

View on Congress.gov
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