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H.R. 1378: 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.

This bill proposes an extension to a specific tax policy related to distilled spirits for Puerto Rico and the Virgin Islands. Here’s a breakdown of what the bill entails:

Key Aspects of the Bill

Extension of Tax Coverage: The bill seeks to amend the Internal Revenue Code of 1986 by extending the temporary increase in the limit on the cover over (a type of tax refund) of distilled spirits taxes. This limit is currently set to expire on January 1, 2022, and the bill aims to extend this expiration date to January 1, 2032.
Application of Changes: The changes made by this bill will impact distilled spirits that are transported into the United States after December 31, 2021. This means that any distilled spirits brought in after this date will be subject to the extended tax provisions proposed in the bill.

Implications of the Bill

The extension of the cover over of distilled spirits taxes could have several economic implications for Puerto Rico and the Virgin Islands, particularly in terms of tax revenue and local distilleries. By extending the deadline for this particular tax benefit, the bill aims to provide continued financial support and incentives for the production and sale of distilled spirits in these territories.

Summary of Changes

The expiration date for the cover over of distilled spirits taxes will change from January 1, 2022, to January 1, 2032.
This change will primarily benefit producers and sellers of distilled spirits in Puerto Rico and the Virgin Islands, as it allows for continued tax relief.

Administrative Process

The bill was introduced in the House of Representatives on February 14, 2025, by Mr. Estes and co-sponsored by Ms. Plaskett. It has been referred to the Committee on Ways and Means for further consideration.