On October 6, 2009, in a televised address to the people of the Virgin Islands, Governor John deJongh announced an agreement with Fortune Brands that will keep Cruzan Rum on St. Croix and expand the brand and its importance in the portfolio of Fortune Brands, the largest U.S. spirits company and the fourth largest premium spirits company in the world. The 28th Legislature voted 13-2 to approve the agreement during a special session on October 27, 2009. Governor deJongh signed the agreement into law on November 5, 2009.

Under the 30-year agreement, the Virgin Islands government commits to continue to share the cost of molasses, a critical input in rum production, as it has for the past several decades. In addition, the VI government will continue to invest a portion of the tax revenues generated from the sales of locally produced rum in growing Cruzan Rum and the Virgin Islands rum industry. Finally, the V.I. government will provide financing for the construction of a state-of-the-art wastewater treatment plant and to expand capacity of the Cruzan distillery by more than 50 percent.

The agreement utilizes the rum excise tax “cover-over” program, an economic development tool which returns to the U.S. territories the excise taxes on locally produced rum sold in the United States. The excise tax “cover-over” program, originally established by Congress in 1917 and extended to the U.S. Virgin Islands in 1954, has been an essential part of the economic relationship between the federal government and the U.S. territories for decades. The excise taxes are charged directly to the rum producer and are considered local territorial tax revenues.