(1) Rate of tax
Except as provided in section 5314, articles of merchandise of Puerto Rican manufacture coming into the United States and withdrawn for consumption or sale shall be subject to a tax equal to the internal revenue tax imposed in the United States upon the like articles of merchandise of domestic manufacture.
(2) Payment of tax
The Secretary shall by regulations prescribe the mode and time for payment and collection of the tax described in paragraph (1), including any discretionary method described in and (c). Such regulations shall authorize the payment of such tax before shipment from Puerto Rico, and the provisions of shall be applicable to the payment and collection of such tax in Puerto Rico.
(3) Deposit of internal revenue collections
All taxes collected under the internal revenue laws of the United States on articles produced in Puerto Rico and transported to the United States (less the estimated amount necessary for payment of refunds and drawbacks), or consumed in the island, shall be covered into the treasury of Puerto Rico.
(1) Taxes imposed in the United States
Except as provided in section 5314, there shall be imposed in the United States, upon articles coming into the United States from the Virgin Islands, a tax equal to the internal revenue tax imposed in the United States upon like articles of domestic manufacture.
(2) Exemption from tax imposed in the Virgin Islands
Such articles shipped from such islands to the United States shall be exempt from the payment of any tax imposed by the internal revenue laws of such islands.
(3) Disposition of internal revenue collections
The Secretary shall determine the amount of all taxes imposed by, and collected under the internal revenue laws of the United States on articles produced in the Virgin Islands and transported to the United States. The amount so determined less 1 percent and less the estimated amount of refunds or credits shall be subject to disposition as follows:
(A) The payment of an estimated amount shall be made to the government of the Virgin Islands before the commencement of each fiscal year as set forth in of the Act entitled “An Act to authorize appropriations for certain insular areas of the United States, and for other purposes”, approved
(B) Any amounts remaining shall be deposited in the Treasury of the United States as miscellaneous receipts.
If at the end of any fiscal year the total of the Federal contribution made under subparagraph (A) with respect to the four calendar quarters immediately preceding the beginning of that fiscal year has not been obligated or expended for an approved purpose, the balance shall continue available for expenditure during any succeeding fiscal year, but only for emergency relief purposes and essential public projects. The aggregate amount of moneys available for expenditure for emergency relief purposes and essential public projects only shall not exceed the sum of $5,000,000 at the end of any fiscal year. Any unobligated or unexpended balance of the Federal contribution remaining at the end of a fiscal year which would cause the moneys available for emergency relief purposes and essential public projects only to exceed the sum of $5,000,000 shall thereupon be transferred and paid over to the Treasury of the United States as miscellaneous receipts.
For purposes of subsections (a)(3) and (b)(3), any article containing distilled spirits shall in no event be treated as produced in Puerto Rico or the Virgin Islands unless at least 92 percent of the alcoholic content in such article is attributable to rum.
(1) Value added requirement for Puerto Rico
Any article, other than an article containing distilled spirits, shall in no event be treated as produced in Puerto Rico unless the sum of—
(A) the cost or value of the materials produced in Puerto Rico, plus
(B) the direct costs of processing operations performed in Puerto Rico,
equals or exceeds 50 percent of the value of such article as of the time it is brought into the United States.
(2) Prohibition of Federal excise tax subsidies
(A) In general
No amount shall be transferred under subsection (a)(3) or (b)(3) in respect of taxes imposed on any article, other than an article containing distilled spirits, if the Secretary determines that a Federal excise tax subsidy was provided by Puerto Rico or the Virgin Islands (as the case may be) with respect to such article.
(B) Federal excise tax subsidy
For purposes of this paragraph, the term “Federal excise tax subsidy” means any subsidy—
(i) of a kind different from, or
(ii) in an amount per value or volume of production greater than,
(3) Direct costs of processing operations
For purposes of this subsection, the term “direct cost of processing operations” has the same meaning as when used in section 213 of the Caribbean Basin Economic Recovery Act.
(1) Excise taxes on rum covered into treasuries of Puerto Rico and Virgin Islands
All taxes collected under on rum imported into the United States (less the estimated amount necessary for payment of refunds and drawbacks) shall be covered into the treasuries of Puerto Rico and the Virgin Islands.
(2) Secretary prescribes formula
The Secretary shall, from time to time, prescribe by regulation a formula for the division of such tax collections between Puerto Rico and the Virgin Islands and the timing and methods for transferring such tax collections.
(3) Rum defined
For purposes of this subsection, the term “rum” means any article classified under subheading 2208.40.00 of the Harmonized Tariff Schedule of the United States (
(4) Coordination with subsections (a) and (b)
Paragraph (1) shall not apply with respect to any rum subject to tax under subsection (a) or (b).
(1) $10.50 ($13.25 in the case of distilled spirits brought into the United States after
(2) the tax imposed under subsection (a)(1) of section 5001, determined as if subsection (c)(1) of such section did not apply, on each proof gallon.
(1) subpart B of part II of subchapter A of chapter 51 shall be applied as if—
subpart B of part II of subchapter A of chapter 51 shall be applied as if—
(A) the use and tax determination described in section 5111 had occurred in the United States by a United States person at the time the article is brought into the United States, and
(B) the rate of tax were the rate applicable under subsection (f) of this section, and
(2) no amount shall be covered into the treasuries of Puerto Rico or the Virgin Islands.
(1) any provision of law which is not contained in this title or in a revenue Act; and
(2) whether such provision of law is a subsequently enacted provision or directly or indirectly seeks to waive the application of this subsection.
For purposes of subsections (a)(3), (b)(3), and (e)(1), refunds under shall not be taken into account as a refund, and the amount of taxes imposed by and collected under shall be determined without regard to .