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

Bill: 117-s-3383
Sponsor: full_name: Sen. Menendez, Robert [D-NJ]
Introduced: 2021-12-14
Policy area: Taxation
Subjects: Alcoholic beverages

Caribbean area

Government trust funds

Land use and conservation

Puerto Rico

Sales and excise taxes

U.S. territories and protectorates

Virgin Islands
Latest action: action_date: 2021-12-14
text: Read twice and referred to the Committee on Finance.

Summaries:
action_date: 2021-12-14
action_desc: Introduced in Senate
text: <p>This bill repeals the limitation on the cover over (i.e., payment) of taxes on certain distilled spirits into the treasuries of Puerto Rico and the U.S. Virgin Islands. It also requires that certain amounts collected on rum transported to the United States that are covered over be transferred to the Puerto Rico Conservation Trust Fund.</p>

tv_txt: II 117th CONGRESS 1st Session S. 3383 IN THE SENATE OF THE UNITED STATES December 14, 2021 Mr. Menendez (for himself and Mr. Cassidy ) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend the Internal Revenue Code of 1986 to modify the cover over of certain distilled spirits taxes.

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), (h) and (i) as subsections (f), (g), and (h) respectively. (2) Effective date The amendments made by this subsection shall apply to distilled spirits brought into the United States after December 31, 2021. (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 redesignated by subsections (a), is amended by inserting (a)(4), after (a)(3), . (3) Effective date The amendments made by this subsection shall apply to distilled spirits brought into the United States after December 31, 2021. (c) Cover over determined without regard to certain rate reductions Notwithstanding section 107(a)(3) of division EE of Public Law 116–260 , the amendments made by section 107(a)(2) of division EE such Public Law shall apply to distilled spirits brought into the United States and removed after December 31, 2017.