To amend the Internal Revenue Code of 1986 to repeal the limitation on the cover over of distilled spirits taxes to Puerto Rico and the Virgin Islands, and for other purposes.
Bill: H.R.4642 | Sponsor: Resident Commissioner González-Colón, Jenniffer (R-PR)
Policy area: Taxation

Summary:
This bill repeals the limitation on the amount of distilled spirits excise tax covered over (paid) to the treasuries of the U.S. Virgin Islands and the Commonwealth of Puerto Rico.
The bill requires certain amounts of the excise tax paid to the treasury of Puerto Rico to be transferred to the Puerto Rico Conservation Trust Fund.

To amend the Internal Revenue Code of 1986 to repeal the limitation on 
the cover over of distilled spirits taxes to Puerto Rico and the Virgin 
                    Islands, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. COVER OVER OF CERTAIN DISTILLED SPIRITS TAXES.

    (a) Repeal of Limitation on Cover Over of Distilled Spirits Taxes 
to Puerto Rico and Virgin Islands.--
            (1) In general.--Section 7652 of the Internal Revenue Code 
        of 1986 is amended by striking subsection (f) and by 
        redesignating subsections (g) and (h) as subsections (f) and 
        (g), respectively.
            (2) Effective date.--The amendments made by this subsection 
        shall apply to distilled spirits brought into the United States 
        after December 31, 2020.
    (b) Required Transfer to Puerto Rico Conservation Trust Fund of 
Portion of Puerto Rico Rum Cover Over.--
            (1) In general.--Section 7652(a) of the Internal Revenue 
        Code of 1986 is amended by adding at the end the following new 
        paragraph:
            ``(4) Required transfer to puerto rico conservation trust 
        fund of portion of rum taxes covered over.--
                    ``(A) In general.--From any taxes collected on rum 
                transported to the United States that are covered into 
                the treasury of Puerto Rico under paragraph (3) at a 
                rate equal to or greater than $10.50 per proof gallon, 
                Puerto Rico shall transfer to the Puerto Rico 
                Conservation Trust Fund an amount per proof gallon 
                equal to or greater than \1/6\ of the difference 
                between $10.50 and the rate, not to exceed $13.25, at 
                which such taxes are covered into such treasury. Puerto 
                Rico's obligations under this paragraph shall not 
                modify or impair payment priorities established under 
                Puerto Rico law and in effect on May 21, 2021.
                    ``(B) Puerto rico conservation trust fund.--For 
                purposes of this section, the term `Puerto Rico 
                Conservation Trust Fund' means the fund established 
                pursuant to a Memorandum of Understanding between the 
                United States Department of the Interior and the 
                Commonwealth of Puerto Rico, dated December 24, 
                1968.''.
            (2) Cover over determined without regard to certain rate 
        reductions.--Section 7652(h) of such Code, as amended by 
        subsections (a) and (c), is amended by inserting ``(a)(4),'' 
        after ``(a)(3),''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to articles containing distilled spirits brought 
        into the United States after December 31, 2020.
    (c) Cover Over Determined Without Regard to Certain Rate 
Reductions.--
            (1) In general.--Section 7652 of the Internal Revenue Code 
        of 1986, as amended by subsection (a), is amended by inserting 
        after subsection (g) the following new subsection:
    ``(h) Cover Over Determined Without Regard to Certain Rate 
Reductions.--For purposes of subsections (a)(3), (b)(3), and (e), the 
amount of taxes imposed and collected under section 5001(a)(1) shall be 
determined without regard to section 5001(c).''.
            (2) Conforming amendment.--Section 7652(e) of such Code is 
        amended by striking paragraph (5).
            (3) Effective date.--The amendments made by this subsection 
        shall take effect as if included in section 13807 of Public Law 
        115-97.
    (d) Determination of Amount of Taxes Collected.--
            (1) In general.--Section 7652 of the Internal Revenue Code 
        of 1986 is amended by striking subsection (i).
            (2) Effective date.--The amendment made by this subsection 
        shall take effect as if included in section 107 of Public Law 
        116-260.
                                 <all>