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Started By
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Why your bottle of rum costs so much, a tax that has gone very very wrong
Posted on 6/10/26 at 7:54 am
Posted on 6/10/26 at 7:54 am
In 1917 the US govt set up a process where taxes on goods shipped from Puerto Rico were returned to them. It eventually evolved into a rum tax referred to as the "cover over" tax and encompassed any rum imported into the US.
Its now, (it was just increased) about 4 dollars US a bottle which is about 8 dollars at retail. Its about 700 million dollars a year that was returned to Puerto Rico, and they gave about 11% of that to the rum producers.
Then the oil refinery in St. Croix closed, devestating the island,and they came up with an idea. What if we talked to Captain Morgan in Puerto Rico.
You move here of the entire cover over tax, we will give you 50% AND we will use our half to build you a brand new distillery. Boom shaka laka.
Then Bacardi in Puerto Rico said this 11% isnt working or should we answer St. Croix who is calling? They ended up giving Barcardi 46%.
Since the tax applies to all rum, even the smaller brands like Mt. Gay or Appleton have their rum taxed and then given to Bacardi and Captain Morgan.
So you end up paying a lot more for rum, and limited selection of other rums.
Its now, (it was just increased) about 4 dollars US a bottle which is about 8 dollars at retail. Its about 700 million dollars a year that was returned to Puerto Rico, and they gave about 11% of that to the rum producers.
Then the oil refinery in St. Croix closed, devestating the island,and they came up with an idea. What if we talked to Captain Morgan in Puerto Rico.
You move here of the entire cover over tax, we will give you 50% AND we will use our half to build you a brand new distillery. Boom shaka laka.
Then Bacardi in Puerto Rico said this 11% isnt working or should we answer St. Croix who is calling? They ended up giving Barcardi 46%.
Since the tax applies to all rum, even the smaller brands like Mt. Gay or Appleton have their rum taxed and then given to Bacardi and Captain Morgan.
So you end up paying a lot more for rum, and limited selection of other rums.
3
Posted on 6/10/26 at 8:16 am to trinidadtiger
quote:
What if we talked to Captain Morgan in Puerto Rico.
I worked with a family member of the distillery that had the Captain Morgan contract. He was pissed that his family gave up this cash cow.
I believe St. Croix used funds from the 2009 Recovery Act to build the new distillery.
This post was edited on 6/10/26 at 8:20 am
Posted on 6/10/26 at 8:17 am to trinidadtiger
So the tax applies to any rum produced in the Caribbean and not just those from Puerto Rico?
While St. Croix is US Virgin Islands I know Mt. Gay is in Barbados.
While St. Croix is US Virgin Islands I know Mt. Gay is in Barbados.
Posted on 6/10/26 at 8:20 am to trinidadtiger
I remember buying a f. of Bacardi for $2 in Panama on Rodman Naval Base back in the day (around 88 or so). I think servicemen didn't have to pay tax on it or something. Rum is cheap as hell to make. Without taxes, it would probably still cost pretty much close to that now along with a lot of other standard liquors.
We are taxed ridiculously in this country and not nearly as much as those in the UK or Europe where those people absolutely fetishize and love paying taxes.
We are taxed ridiculously in this country and not nearly as much as those in the UK or Europe where those people absolutely fetishize and love paying taxes.
This post was edited on 6/10/26 at 8:21 am
Posted on 6/10/26 at 8:23 am to theballguy
rum in the Virgin Islands is 50% cheaper than orange juice. tends to make a powerful drink.
Posted on 6/10/26 at 8:25 am to theballguy
No tax on military installations.
Posted on 6/10/26 at 8:26 am to Trevaylin
quote:
rum in the Virgin Islands is 50% cheaper than orange juice. tends to make a powerful drink.
On a boat near Belize we were doing some diving and the boatmen had 151 punch. Just thought it was reg 80 proof. That was the strongest shite I've ever drunk (had 2 cups of it). Even then my wife almost never drank and she was fricked up off of 1/2 cup of it. I'd swear they put a crack rock in it or something. We had to take it easy the rest of the day
Posted on 6/10/26 at 8:29 am to Night Vision
quote:
No tax on military installations.
Contractors and gubmin employees can get gas and eat at the snackbar on base but that's the extent of it.
I wish I could buy from the Class 6 store today
Posted on 6/10/26 at 8:36 am to theballguy
My wife and I went to St Croix for our honeymoon. We started drinking rum drinks at 9 am all day and got absolutely fricked up.
It’s a laid back island. They seem to encourage drinking and driving
It’s a laid back island. They seem to encourage drinking and driving
Posted on 6/10/26 at 9:03 am to PsychTiger
quote:
So the tax applies to any rum produced in the Caribbean and not just those from Puerto Rico?
While St. Croix is US Virgin Islands I know Mt. Gay is in Barbados.
Correct. Mt Gay is Barbados, Appleton Jamaica they pay the tax as well. It is then given to the govts of US Virgin Islands and Puerto Rico......who then give it to the distillers.
So they are taxing you, and then letting competitors use your own tax dollars to compete against you.
Its the reason why all the Caribbean Islands tax the shat out of Bacardi and Captain Morgan.
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