US VIRGIN ISLANDS Law and Practice Contributed by: Marjorie (Jorie) Roberts, Duncan J.J. Kessler and Jessica McKenney, Marjorie Rawls Roberts PC
Marjorie Rawls Roberts PC PO Box 6347 St. Thomas, VI 00804 5093 Dronningens Gade Suite 1, St. Thomas VI 00802 US Virgin Islands
Tel: +340 776 7235 Fax: +340 776 7951 Email: jorie@mrrvilaw.com Web: www.mrrvilaw.com
1. Legal System 1.1 Legal System and Judicial Order
worldwide income to the USVI Bureau of Internal Rev - enue (BIR). Congress has, through the Revised Organic Act of 1954, as amended, and its predecessor Organic Acts, also established a territorial government for the USVI that includes a locally elected Governor, a locally elected unicameral legislature and locally created administrative agencies – as well as a judicial system, discussed below. The USVI Legislature may enact general statutory laws for the territory (subject to the veto of the Governor) to the extent they do not conflict with federal law. The Legislature may also grant rule- making authority to the local executive agencies, and the Governor has the power to issue executive orders. The judicial system in the USVI comprises both federal and local courts (previously referred to as “territorial courts”). The jurisdiction of the federal District Court of the Virgin Islands is substantially similar to that of the federal district courts in the 50 states. However, because Congress established the District Court of the Virgin Islands pursuant to its authority under Arti - cle IV of the US Constitution rather than Article III, there are some important differences. For example, the District Court has exclusive jurisdiction over ques - tions of income tax in the USVI and may preside over some criminal cases based on local law. Decisions of the District Court are appealable to the US Court of Appeals for the Third Circuit (headquartered in Phila - delphia, Pennsylvania) and, ultimately, to the Supreme Court of the United States, similar to cases arising from Delaware, Pennsylvania and New Jersey.
The legal system of the United States Virgin Islands (USVI) is, in most respects, similar to the legal systems of the 50 states of the United States of America. Fed - eral sources of law, such as the Constitution of the United States, statutes enacted by the US Congress, regulations promulgated by US administrative agen - cies, and executive orders issued by the President of the United States, are generally applicable in the USVI. However, because the USVI is an unincorpo - rated territory of the United States, Congress may vary the applicability of most federal laws in the USVI in a way that deviates from the 50 states. For example, the USVI constitutes a separate customs zone with different tariff rates from the rest of the United States (based on the Danish customs law in effect when the United States purchased the USVI from Denmark in 1917), and Congress has authorised unique variations in the federal income tax laws in the USVI that differ from the uniform federal income tax laws in the 50 states. However, overall, the USVI operates under a mirror tax code with the US Internal Revenue Service (IRS), meaning that the USVI has adopted the Internal Revenue Code of 1986, as amended, and the appli - cable Treasury Regulations, as its own code pursuant to the Naval Services Appropriation Act of 1922, 48 U.S.C. 1397 (the “Code”). Section 1397 specifically provides that taxes will be paid to the USVI. This is further expanded in other statutes and regulations, including Section 932 (c), which specifies that bona fide residents of the USVI pay income taxes on their
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