HR 366119th CongressIn Committee

To amend the Internal Revenue Code of 1986 to cover into the treasury of the Virgin Islands revenue from tax on fuel produced in the Virgin Islands and entered into the United States.

Introduced: Jan 13, 2025

Standard Summary

Comprehensive overview in 1-2 paragraphs

This bill would shift the federal fuel excise tax revenue (the tax on fuel under section 4081(a)) that is collected on fuel produced in the Virgin Islands and imported into the United States to the Virgin Islands’ own treasury. Specifically, a new subsection would be added to the federal tax code to require that all such taxes be “covered into the treasury of the Virgin Islands.” The change would take effect for fuel entering the United States after December 31, 2024. In essence, the Virgin Islands would receive the revenues currently earmarked for the federal treasury from taxes on VI-produced fuel that is sold into the United States.

Key Points

1Adds new subsection (j) to Section 7652 of the Internal Revenue Code. This subsection states that taxes collected under section 4081(a) on fuel produced in the Virgin Islands and entered into the United States from the Virgin Islands shall be credited to the Virgin Islands’ treasury.
2Effective date: Applies to fuel that is entered into the United States after December 31, 2024.
3Revenue shift: Taxes that would normally go to the federal government under the federal fuel excise tax would instead be deposited into the Virgin Islands’ treasury.
4Scope of the taxes covered: The provision targets the federal excise tax on fuel produced in the Virgin Islands and shipped into U.S. markets (as defined by section 4081(a)).
5Status and sponsor: Introduced in the House as H.R. 366 on January 13, 2025 by Ms. Plaskett; referred to the Committee on Ways and Means.

Impact Areas

Primary: Government of the Virgin Islands and its residents – gains access to revenue from federal fuel taxes on VI-produced fuel entering the U.S., potentially expanding or funding local programs and services.Secondary: Federal government would lose these specific fuel-excise revenues; U.S. consumers and fuel users may experience indirect effects only if VI-produced fuel pricing is influenced (the bill does not specify price changes, but revenue flows could affect government budgets and programs).Additional impacts:- Administrative/implementation considerations for IRS and customs/foreign-trade processes to ensure fuel shipments from VI to the U.S. are properly tracked and the revenues redirected.- Possible changes in intergovernmental fiscal dynamics and budget planning in both the Virgin Islands and the federal government.- The measure applies only to fuel produced in the Virgin Islands and entering the United States after 2024, so effects would be limited to that geographic/product scope and timeframe.

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