To amend the Internal Revenue Code of 1986 to extend the temporary increase in limitation on the cover over of distilled spirits taxes to Puerto Rico and the Virgin Islands.

Summary

Extends a temporary increase in the portion of distilled spirits excise taxes that are "covered over" (transferred) to certain local/territorial governments through January 1, 2032. The change applies to distilled spirits brought into the United States after December 31, 2021, making the extension effectively retroactive to the start of 2022 for covered imports. This amendment shifts more excise-tax revenue away from the federal government and toward the recipients of the cover-over transfers for the next decade, with administrative and budgeting effects for both federal and local/territorial governments and modest effects for distilled spirits importers and producers.

• Extends temporary increase in the cover-over of distilled spirits excise taxes until January 1, 2032.
• Applies retroactively to distilled spirits brought into the U.S. after December 31, 2021 (effectively from Jan 1, 2022).
• Increases the share of excise tax revenue transferred to cover-over recipients and reduces concurrent federal receipts for the period.
• Requires federal tax authorities to apply the extended cover-over rule when processing qualifying imports.
• Is time-limited and will expire again on January 1, 2032 unless further extended or changed.
• Likely benefits territorial and local governments that receive cover-over transfers by increasing their near-term revenues.
• May require accounting or reconciliation of transfers for calendar years since 2022 due to the retroactive application.
• Has modest downstream effects on distillers, importers, and businesses that handle excise-tax reporting.