Resident Commissioner Pablo José Hernández and Congresswoman Stacey Plaskett Urge Senate to Include Rum Cover Over Increase in the Budget Reconciliation Bill for Puerto Rico and the U.S. Virgin Islands
WASHINGTON, D.C. – Today, Resident Commissioner Pablo José Hernández (D-P.R.) and Congresswoman Stacey Plaskett (D-V.I.) sent a joint letter to Senate leadership urging the inclusion of a provision in the Senate version of the H.R.1, the One Big Beautiful Bill Act, to restore the enhanced rum cover-over rate for Puerto Rico and the U.S. Virgin Islands.
“This is about economic justice for communities that have suffered natural disasters, structural inequality, among others,” said the Resident Commissioner. “For decades, the cover-over program has allowed our islands to reinvest in education, infrastructure, and public services. Congress must act now to provide the long-term certainty that our people deserve.”
Under current law, excise tax collections on imported rum are transferred to Puerto Rico and the U.S. Virgin Islands at the rate of $13.25 per proof gallon; $10.50 per proof gallon is in permanent law, and the remaining $2.75 per proof gallon requires periodic reauthorization by Congress.
The letter was sent to Senate Majority Leader John Thune, Democratic Leader Charles Schumer, Senate Finance Committee Chairman Mike Crapo, and Ranking Member Ron Wyden. H.R. 1378, co-sponsored by both lawmakers, contains the necessary legislative language to make this change, but the provision was excluded from the House-passed version of H.R. 1.
“Extending the increased rum cover over rate is about giving Puerto Rico the tools to invest in economic recovery and long-term growth. Our rum industry supports thousands of good-paying jobs and generates critical revenue to support economic development on the island. Including this provision is not just a fiscal decision—it’s a statement that the federal government will stand by its citizens in every part of the United States,” added the Resident Commissioner.
“The cover-over has been a fundamental part of the tax relationship between the United States and its territories for over a century,” said Congresswoman Plaskett. “These funds, which represent nearly 25% of the Virgin Islands Government’s annual budget, are critical for stabilizing the government employees’ pension program, supporting infrastructure projects, and attracting investments to diversify the economy beyond tourism. While we presently receive $10.50 per proof gallon, It’s important that the Virgin Islands and Puerto Rico be able to receive the maximum allowance of the return on the excise tax. I would like to thank my colleagues, including Congressman Pablo Hernandez (D-PR) and Congressman Ron Estes (R-KS), for their continued advocacy to provide the increased rum cover over rate of $13.25 until 2032, and retroactively to 2022, and urge the Senate to join us in support of this critical measure.”
Click HERE to read the Resident Commissioner and Congresswoman’s letter.
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