Sponsor
Stacey E. Plaskett
Representative · D-VI
Representative · D-VI
The bill redirects federal fuel excise tax revenue to the U.S. Virgin Islands and clarifies tax rules—boosting local territorial revenue and reducing business uncertainty—while shrinking federal receipts, creating compliance costs for some importers, and raising fairness questions for other jurisdictions.
Residents and the government of the U.S. Virgin Islands will receive federal fuel excise tax revenue on fuel produced there and entered into the U.S., boosting local government revenue and funds available for public services.
Importers and producers in the Virgin Islands will have clearer tax disposition rules for fuel entries after Dec 31, 2024, reducing uncertainty about revenue flows and aiding business planning.
The federal government (and thus U.S. taxpayers broadly) will lose excise tax revenue that otherwise would have gone to the U.S. Treasury, reducing federal receipts available for national programs.
Other U.S. states, territories, and taxpayers could raise fairness and precedent concerns if the Virgin Islands gets special treatment, complicating excise tax administration and potentially prompting similar requests.
Importers of Virgin Islands fuel, including small businesses and financial intermediaries, may face added administrative and compliance costs to ensure taxes are paid to the Virgin Islands treasury beginning Jan 1, 2025.
Based on analysis of 2 sections of legislative text.
Requires federal fuel excise taxes on fuel produced in the U.S. Virgin Islands and entered into the U.S. to be deposited into the Virgin Islands treasury for entries after Dec 31, 2024.
Official title: To amend the Internal Revenue Code of 1986 to cover into the treasury of the Virgin Islands revenue from tax on fuel produced in the Virgin Islands and entered into the United States.
Introduced January 13, 2025 by Stacey E. Plaskett · Last progress January 13, 2025
Requires that federal fuel excise taxes collected on fuel produced in the U.S. Virgin Islands and then entered into the United States be transferred to the U.S. Virgin Islands treasury. The change applies to fuel entered into the United States after December 31, 2024, and modifies the existing tax-disposition rules to explicitly include 26 U.S.C. § 4081(a) fuel excise collections for articles from the Virgin Islands.