$338M released to Guam, USVI in rum and Section 30 tax payments

WASHINGTON, D.C.—The U.S. Department of the Interior’s Office of Insular Affairs has released $338,059,936 to Guam and the U.S. Virgin Islands. The payment includes $65.1 million to Guam for federal income tax advance payments under Section 30 of the Organic Act of Guam for fiscal year 2021 and $272.95 million to the USVI in rum tax cover-over payments for estimated fiscal year 2021 rum tax collections in the territory.

“The Office of Insular Affairs works closely with the Internal Revenue Service to ensure quick and smooth transfer of these taxes back to the USVI and Guam once available,” said U.S. Department of the Interior Assistant Secretary Douglas W. Domenech. “[Interior] Secretary [David] Bernhardt and I appreciate that these funds will be critical to Guam and the U.S. Virgin Islands as they work to manage health and economic impacts of the coronavirus pandemic in the territories.”

Under the Revised Organic Act of the Virgin Islands, any excise tax collected on USVI manufactured rum imported into the U.S. mainland is transferred to or “covered-over” to the USVI. The USVI government submits an advance estimate of rum excise taxes to the Department of the Interior’s OIA on an annual basis so that a payment can be made in September of each fiscal year. Any adjustments necessary are calculated and paid later based upon amounts advanced from rum excise taxes derived from the USVI and actual receipts collected by the federal government.

Under Guam’s Organic Act, federal income taxes derived from active members of the U.S. Armed Forces and pensions paid to retired civilian and military employees of the United States who reside on Guam are annually “covered-over” to the Guam Treasury to support the operations, activities, and programs of the local government.

Through changes made under the National Defense Authorization Act of 2017, some of these funds are set aside for the Guam World War II Claims Fund at the U.S. Department of the Treasury. In March 2020, Bernhardt applauded President Donald Trump when he signed H.R. 1365, which made technical corrections to the Guam World War II Loyalty Recognition Act. This legislation, passed by the House and Senate, authorized the Treasury to issue payments to survivors of Guam’s occupation by Imperial Japanese Forces during World War II.

All payments are certified by the U.S. Department of the Treasury. (PR)