Love the Virgin Islands? Love Rum? Now You Have a Great Excuse to Drink More to Help the USVI

Cruzan Rum is made in the US Virgin Islands

Each year the US Virgin Islands receives tens of millions of dollars from the federal government as the result of a 'Cover Over Rate Tax' which is USVI rum excise tax monies returned to the US Virgin Islands from the federal government. Actually, over $250 million each year comes back to the US VIrgin Islands as the result of people buying USVI made rum! The cover over tax has been in place for nearly 100 years and benefitting the US Virgin Islands since 1954. The Congressional Research Service produced a history of the Rum Excise Tax Cover Over 3 years ago. 

The 'per gallon' excise tax rate is now in dispute between the US Virgin Islands government and the federal government. The difference is not peanuts in that the USVI is projecting $264 million and the federal government is projecting only $193 million. The difference is based on a lower per gallon reimbursement rate $10.50/gallon vs $13.25/gallon.  If you want to get into the details you might read the letter the USVI's Budget Director sent last Friday to the Department of the Interior appealing for relief of the per gallon rate calculation.

The bottom line for us, though, is the more US Virgin Islands rum that is sold the more money that is returned to the US Virgin Islands for support of our schools, streets,  etc so....drink up to help the islands you love.

Cruzan Rum Unveils New Campaign "The Don't Hurry" Which Could Have Been Filmed On St John

Ever See this guy on one of the St John beaches?

Speaking of rum (and, when do we not?)...Last week the Virgin Islands rum maker extraordinaire, Cruzan Rum, unveiled their new ad campaign, "The Don't Hurry". It is set on an island paradise where no one is busy, people enjoy zero-kilometer runs and sleep yoga, and every minute lasts 64 seconds. Even the animals are slow, including a rum toting turtle. Sound familiar? Could be St John! And, certainly was filmed in the Virgin Islands since Cruzan Rum hails from here (St Croix our sister island to the south of St John). 

What's your favorite way to enjoy our island beverage? With some of the St John Brewers Ginger Beer (new this year) for a Dark 'N Stormy? Tonic? Or just on the rocks or neat?

Caribbean Rum Wars Continue and and Bring in Vice President Biden to 'Brutal' Discussion

Rum produced in the Virgin Islands has been at the center of a debate

Rum was also on the agenda for frequent Virgin Islands visitor, Vice-President Biden, when he attended a meeting this week with the Caribbean Community (Caricom) leaders to highlight concerns about the impact of US rum subsidies to Puerto Rico and the US Virgin Islands. “The most contentious issue is rum subsidies to Puerto Rico and the US Virgin Islands.  The main rum producers in question are Puerto Rico's Bacardi and Captain Morgan and the Virgin Islands Cruzan Rum. 

We don’t expect (Biden) to make a decision today but we expect to let him know the whole position and the full ramifications of continuing those subsidies and that it will clearly affect rum production,” Trade Minister Vasant Bharath said earlier this week. The talks have been described by some as 'brutal' (maybe the Vice President should head back to the Virgin Islands for some needed R&R - and rum?). 

It has been claimed by several several members of the Caricom that the US has been running a “Rum Cover-Over Programme” since 1917, which consists of a tax levied on sales of spirits in the US market. 

The “contentious issue” has to do with subsidies extended to rum producers in Puerto Rico and the US Virgin Islands. In January, President Barack Obama signed into law a bill averting a threatened fiscal cliff of higher taxes and spending cuts. That legislation included special gifts to several US corporations such as a provision extending a 1917 law that imposes  a $13.50 tax on  each gallon of rum produced in or imported into the United States. 

Most of this revenue is transferred to the US Virgin Islands and Puerto Rico—US dependencies—to aid these territories’ economic development.  Many of the rum producing islands feel that Puerto Rico and the US Virgin Islands use much of these funds to encourage their local rum industries, at the expense of other Caribbean rum-producing countries.  The view from the Virgin Islands point of view is that the funds derived by rum products is essential fuel for the VI economy. So, know that wherever you are, when you enjoy your rum and tonic or dark n' stormy rum cocktail - which, hopefully, is made from Virgin Islands Cruzan rum - know that you are doing good things for the Virgin Islands economy!