Office of Insular Affairs Advances $257.4 Million to the U.S. Virgin Islands and Guam for Estimated Tax Payments

WASHINGTON – The Office of Insular Affairs (OIA) has transferred payments of $181,068,638 to the U.S. Virgin Islands (USVI) and $76,402,101 to Guam. These payments represent an advance of fiscal year 2025 estimated rum tax cover over payments to the USVI and fiscal year 2025 federal income tax Section 30 advance payments to Guam.

“The Department of the Interior works closely with the U.S. Department of Treasury to ensure that these critical funds for the territories are calculated and transmitted as quickly as possible,” said Assistant Secretary for Insular and International Affairs Carmen G. Cantor.

Under the Revised Organic Act of the Virgin Islands (48 USC Chapter 12 Section 1541), any excise tax collected on rum manufactured in the USVI and exported from the territory to the United States is transferred back to or “covered over” to the USVI. The USVI Government submits an advance estimate of rum excise taxes to OIA on an annual basis so that a payment can be made by September of each fiscal year. Any adjustments are calculated and paid based upon amounts advanced from rum excise taxes derived from the USVI and actual receipts collected by the federal government. The fiscal year 2025 advance payment to the USVI Government was calculated using the $10.50 per proof gallon rate, as provided for under current law (Public Law 98-369).

Under Guam’s Organic Act, federal income taxes derived from active members of the United States Armed Forces and pensions paid to retired civilian and military employees of the United States, or their survivors, who reside in, or who are domiciled in Guam, are annually “covered over” to the Guam Treasury to support the operations, activities, and programs of the local government (48 U.S. Code 1421 Section h).  The Guam Government submits an advance estimate of these income taxes to OIA on an annual basis so that a payment can be made by September of each fiscal year. Any adjustments are calculated and paid based upon amounts advanced for income tax collections and actual income taxes collected.

The Assistant Secretary for Insular and International Affairs and the Office of Insular Affairs (OIA) carry out the Secretary of the Interior’s responsibilities for the U.S. territories of American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, and the U.S. Virgin Islands. Additionally, OIA administers and oversees federal assistance under the Compacts of Free Association to the Federated States of Micronesia, the Republic of the Marshall Islands, and the Republic of Palau. OIA also administers discretionary grants to all the Insular Areas.

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