(a) There is established in the Office of the Governor, the Virgin Islands Tax Study Commission, which shall be composed of eight members among whom shall be: two ex-officio members, the Commissioner of Finance or the Commissioner’s designee and the Director of the Internal Revenue Bureau or the Director’s designee, the latter of whom shall be an ex-officio non-voting member; and six members appointed by the Governor of the Virgin Islands, three of whom shall be from the St. Croix district, and three of whom shall be from the St. Thomas/St. John district. At least three of the Governor’s appointees shall be from the private sector.
(b) All appointees to the Commission shall have expertise in either tax, banking, accounting, finance or insurance.
(c) The Commission shall elect a chairman and other officers. The Governor may not remove any member during the life of the Commission, except for misfeasance or malfeasance in office.
(d) Except for private sector members who will be paid $75 per meeting, members of the Commission shall serve without compensation, but shall receive payment for necessary expenses for each day engaged in the service of the Commission. However, no member, except those from the private sector, may receive more than $50 per day or more than $1,000 per year for expenses, exclusive of transportation.
(e) The Commission shall study and analyze all Virgin Islands laws and regulations relating to taxes, licenses, and fees to determine which laws or regulations must be continued, revised, abolished or replaced by new revenue measures to eliminate any undue burdens on taxpayers. Additionally, the Commission shall study and analyze the laws of other jurisdictions to determine whether those tax laws are desirable substitutes for the tax laws presently in effect in the Virgin Islands.
(f) The Commission may summon and subpoena witnesses, require the production of books, accounts, documents, records and papers of every kind and description, and shall use all reasonable means to compel the attendance of witnesses. The Commission may take oral or documentary testimony, relative to its duties and functions provided, however, that all powers of production and information by the Commission shall be consistent with and subject to the provisions of the Internal Revenue Code, and title 33 of the Virgin Islands Code.
(g) The Commission may employ such research, technical or professional staff as necessary to carry out its duties and responsibilities and may partner with the University of the Virgin Islands for this needed technical support.
(h) The Commission’s study shall include, but shall not be limited to:(1) An evaluation of the Internal Revenue Code of 1986, as amended and as applicable to the Virgin Islands, including the impact of refundable credits and the definition of “residency” by the Internal Revenue Service as applicable to the United States Virgin Islands taxpayers;(2) The consideration of adoption of a Virgin Islands Internal Revenue Code for the purpose of implementing a local income tax provision;(3) The imposition, modification, or elimination of gross receipt taxes;(4) The imposition of a sales tax or a value added tax in lieu of the gross receipts tax, provided that such study shall include a review of covenants for any bond indenture secured by gross receipts taxes;(5) The imposition, modification, or elimination of customs and excise taxes on goods, and the exemptions thereto, including, but not limited to:(A) The exemptions of foodstuff, as currently provided in title 33, section 42(e)(2) of the Virgin Islands Code; and(B) The exemption on boats, boat engines and boat parts as provided in Section 1 of Act No. 6008, enacted August 26, 1994;(6) The desirability of operating and maintaining customs preclearance facilities and the opportunities for the privatization thereof;(7) The feasibility of a tax on internet and catalog sales;(8) Review of the imposition of a gross receipts or similar tax in lieu of the entertainment and amusement tax;(9) Review of the production tax, as provided in title 33, chapter 9 of the Virgin Islands Code;(10) A comparative assessment of the taxes and related fees levied on hotels and other guest accommodations with other tourist destinations, including the Caribbean islands and the United States;(11) The adequacy of the highway users’ tax and the exemptions thereto to finance more frequent maintenance of roads in accordance with the Territory’s capital improvement plan;(12) The consideration of the imposition of a property tax, whether one-time, annual or otherwise, on motor vehicles in lieu of the highway user’s tax;(13) Review of the assessment and collection of the real property taxes, including the provision of an early payment incentive on payment of real property taxes, the collection of property taxes on a quarterly basis, and an assessment methodology for commercial property based on the value of the business as compared to best practices throughout the United States;(14) Cost benefit analysis of all exemptions from or reduction of taxes as provided by law including, but not limited to, the farmers and fishermen exemptions, the enterprise zones, economic development benefits, the lottery winning exemptions, and the small business exemption from gross receipts taxes;(15) Review of the miscellaneous excise taxes as provided in title 33, section 42(a) of the Virgin Islands Code;(16) Review and comparison of other tax incentive programs in similar jurisdictions in partnership with the Economic Development Authority and the University of the Virgin Islands Research and Technology Park; and(17) Methods to address tax collection issues and the possible creation of a Tax Payer Registry.
(1) An evaluation of the Internal Revenue Code of 1986, as amended and as applicable to the Virgin Islands, including the impact of refundable credits and the definition of “residency” by the Internal Revenue Service as applicable to the United States Virgin Islands taxpayers;
(2) The consideration of adoption of a Virgin Islands Internal Revenue Code for the purpose of implementing a local income tax provision;
(3) The imposition, modification, or elimination of gross receipt taxes;
(4) The imposition of a sales tax or a value added tax in lieu of the gross receipts tax, provided that such study shall include a review of covenants for any bond indenture secured by gross receipts taxes;
(5) The imposition, modification, or elimination of customs and excise taxes on goods, and the exemptions thereto, including, but not limited to:(A) The exemptions of foodstuff, as currently provided in title 33, section 42(e)(2) of the Virgin Islands Code; and(B) The exemption on boats, boat engines and boat parts as provided in Section 1 of Act No. 6008, enacted August 26, 1994;
(A) The exemptions of foodstuff, as currently provided in title 33, section 42(e)(2) of the Virgin Islands Code; and
(B) The exemption on boats, boat engines and boat parts as provided in Section 1 of Act No. 6008, enacted August 26, 1994;
(6) The desirability of operating and maintaining customs preclearance facilities and the opportunities for the privatization thereof;
(7) The feasibility of a tax on internet and catalog sales;
(8) Review of the imposition of a gross receipts or similar tax in lieu of the entertainment and amusement tax;
(9) Review of the production tax, as provided in title 33, chapter 9 of the Virgin Islands Code;
(10) A comparative assessment of the taxes and related fees levied on hotels and other guest accommodations with other tourist destinations, including the Caribbean islands and the United States;
(11) The adequacy of the highway users’ tax and the exemptions thereto to finance more frequent maintenance of roads in accordance with the Territory’s capital improvement plan;
(12) The consideration of the imposition of a property tax, whether one-time, annual or otherwise, on motor vehicles in lieu of the highway user’s tax;
(13) Review of the assessment and collection of the real property taxes, including the provision of an early payment incentive on payment of real property taxes, the collection of property taxes on a quarterly basis, and an assessment methodology for commercial property based on the value of the business as compared to best practices throughout the United States;
(14) Cost benefit analysis of all exemptions from or reduction of taxes as provided by law including, but not limited to, the farmers and fishermen exemptions, the enterprise zones, economic development benefits, the lottery winning exemptions, and the small business exemption from gross receipts taxes;
(15) Review of the miscellaneous excise taxes as provided in title 33, section 42(a) of the Virgin Islands Code;
(16) Review and comparison of other tax incentive programs in similar jurisdictions in partnership with the Economic Development Authority and the University of the Virgin Islands Research and Technology Park; and
(17) Methods to address tax collection issues and the possible creation of a Tax Payer Registry.
(i) The Commission may apply for public or private grants, gifts, or donations which shall be placed into a dedicated subaccount of the General Fund in the Treasury of the Virgin Islands and maintained by the Commissioner of Finance. Money may be disbursed from the subaccount for the purposes provided in this section, upon warrant of either the Chairperson or Co-Chairperson of the Commission.
(j) The Commission may convene every five years to perform a tax review as determined by the Governor and the Legislature. However, the first Commission meeting within which a quorum is established shall be held no later than one 180 days after the enactment of this Act.
(k) The Commission shall file a report of its study with the Governor and the Legislature of the Virgin Islands within two years after the first Commission meeting is held, where a quorum is established. This report should include recommendations and draft legislation, if necessary, to implement such recommendations. The priority items to be included in the report are as follows:(1) The imposition, modification, or elimination of gross receipt taxes;(2) The imposition of a sales tax or a value added tax in lieu of gross receipts taxes, including a review of covenants for any bond indenture secured by gross receipts taxes;(3) The feasibility of a tax on internet and catalog sales; and(4) Methods to address tax collection issues and the possible creation of a tax payer registry.
(1) The imposition, modification, or elimination of gross receipt taxes;
(2) The imposition of a sales tax or a value added tax in lieu of gross receipts taxes, including a review of covenants for any bond indenture secured by gross receipts taxes;
(3) The feasibility of a tax on internet and catalog sales; and
(4) Methods to address tax collection issues and the possible creation of a tax payer registry.
(l) The Governor and the Legislature will have 180 days following the submission of the report to determine the appropriate timeline for review of any remaining items outlined in subsection (h) of this section.
(m) The Commission shall have annual meetings with the Governor and the Legislature to provide an update on its study.