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S 1986119th CongressIn Committee
A bill to amend the Internal Revenue Code of 1986 to extend the temporary increase in limitation on the cover over of distilled spirits taxes to Puerto Rico and the Virgin Islands.
Introduced: Jun 9, 2025
Economy & Taxes
Standard Summary
Comprehensive overview in 1-2 paragraphs
This bill extends a temporary increase in the amount of the federal distilled spirits excise tax that is “covered over” to Puerto Rico and the Virgin Islands. Specifically, it amends the Internal Revenue Code to move the end date of the temporary increase from January 1, 2022 to January 1, 2032. The extension applies to distilled spirits brought into the United States after December 31, 2021. In practical terms, the bill keeps or expands the share of federal distilled spirits tax revenues that are paid to Puerto Rico and the Virgin Islands over the extended period, supporting their local government finances without changing tax rates.
Key Points
- 1The bill amends Section 7652(f)(1) to extend the temporary increase in the cover over of distilled spirits taxes to PR and VI, pushing the date to January 1, 2032.
- 2Effective date: the extension applies to distilled spirits brought into the United States after December 31, 2021 (i.e., from 2022 onward).
- 3Purpose: to continue a higher transfer (cover over) of federal distilled spirits tax receipts to Puerto Rico and the Virgin Islands beyond the prior expiration date.
- 4Scope: Applies only to the cover over of distilled spirits taxes; does not alter tax rates or other tax provisions.
- 5Status: Introduced in the Senate by Senator Cassidy and referred to the Committee on Finance; no further actions stated in the provided text.
Impact Areas
Primary: Governments of Puerto Rico and the U.S. Virgin Islands, which receive a portion of federal distilled spirits tax revenues to support public finances.Secondary: Individuals and entities involved in importing or selling distilled spirits may experience indirect effects through continued funding for local services, though tax rates and the tax burden remain unchanged.Additional impacts: The extension affects federal-territorial fiscal relations and budgetary planning in PR and VI, while leaving overall U.S. tax policy otherwise unchanged.
Generated by gpt-5-nano on Oct 7, 2025