Sponsors
The bill redirects fuel excise tax revenue to the U.S. Virgin Islands to boost local government resources and services, while imposing modest federal revenue losses and some compliance costs on shippers and importers.
Residents of the U.S. Virgin Islands and their local governments will receive fuel excise tax revenue on fuel produced there, increasing territory-held funds that can be used for public services and infrastructure instead of flowing to the U.S. Treasury.
Federal taxpayers and the federal budget will experience a modest decrease in federal receipts because excise taxes on fuel produced in the Virgin Islands are redirected to the territory, reducing funds available for other federal programs.
Shippers, fuel importers, and energy companies may face changes in tax treatment or additional administrative and compliance processes for fuel entered after Dec. 31, 2024, which could raise their operating costs and be passed on to consumers.
Based on analysis of 2 sections of legislative text.
Introduced January 13, 2025 by Stacey E. Plaskett · Last progress January 13, 2025
Directs that federal excise taxes on fuel produced in the U.S. Virgin Islands and then brought into the United States be paid (covered) into the treasury of the Virgin Islands. This change applies to fuel entered into the United States after December 31, 2024. The provision amends the federal coverover rules so the IRS (or Treasury) transfers those collected fuel excise taxes to the Virgin Islands government rather than retaining them in the general federal receipts.