US VIRGIN ISLANDS TRENDS AND DEVELOPMENTS Contributed by: Marjorie (Jorie) Roberts, Sean E Foster, Renée Marie André, David Bornn, Lisa M Wisehart and Duncan J J Kessler, Marjorie Rawls Roberts PC
ness activities that are not covered by a ben - eficiary’s grant of RTPark benefits. Moreover, the BIR requires each beneficiary to report its gross receipts (monthly, assuming annual gross receipts of more than USD225,000) on Form 720 VI and then indicate that the beneficiary is exempt from payment of the tax pursuant to its status as an RTPark beneficiary. Beneficiaries receive an exemption from USVI excise tax on building materials and machinery used in the construction of their facilities, and on raw materials brought into the USVI to produce articles. Otherwise, a tax ranging from 2% to 25% applies to the fair market value of many items. In addition, several statutory exemptions from excise tax apply, regardless of beneficiary status. Beneficiaries receive an exemption from the USVI property tax, although the personal homes of beneficiary owners do not receive the prop - erty tax exemption, even if the respective owners maintain home offices. Moreover, if a beneficiary rents an office, the property tax exemption does not pass through to its landlord. Because the USVI is outside the US customs zone, it has enacted its own customs law, impos - ing a 6% duty on items not manufactured in the US. An RTPark beneficiary’s customs duties are reduced from 6% to 1% on raw materials and component parts imported from outside the USVI. Materials made in the US are exempt from any customs duty. As with the excise tax, sev - eral statutory exemptions from customs duties apply, regardless of beneficiary status. Manufacturing and agriculture as growth sectors The USVI legislature has provided a number of tax benefits and economic incentives to encour -
age agriculture, including the Farmers, Fisher - men and Consumers Assistance Act, which gives certain tax exemptions to the farming and fishing industry, including an exemption from gross receipts tax on sales of products derived from the agricultural business. The EDC Program includes agriculture, food processing, product assembly and manufacturing as eligi - ble activities. The USVI Economic Development Bank, administered by the EDA, provides low- interest loans and micro-credit for USVI farmers and fishers, and farmers can qualify for property tax exemptions on agricultural land. South Shore Trade Zone Act In 2020, the USVI legislature enacted the Vir - gin Islands South Shore Trade Zone Act (SSTZ), which designates 3,000 acres on the south shore of St Croix, features a deep-water port and is a short distance from the Henry E. Rohlsen Air - port, as an Enterprise Zone. The SSTZ entitles approved applicants to a credit equal to 90% of the otherwise applicable income tax, in addition to a 100% exemption from the gross receipts tax, property tax, excise taxes and customs duties for up to 20 years. The goal of the SSTZ is to designate an area that eliminates traditional barriers to commercial trade and investment in support of light manu - facturing, trans-shipment, agricultural sector, micro-manufacturing, industrial development and the territory’s green and blue economy sec - tors. Among other requirements, an applicant in a qualifying business must make a minimum capital investment of USD100,000 (exclusive of inventory) and employ a minimum of ten full-time employees and one paid apprentice. Applicants must comply with all local and federal laws and notify the USVI Department of Labor of any job openings or subcontracting openings. The SSTZ is administered by the EDA.
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