US VIRGIN ISLANDS TRENDS AND DEVELOPMENTS Contributed by: Marjorie Roberts (“Jorie”), Sean Foster, Renée Marie André, Lisa Wisehart, David Bornn, Duncan J. J. Kessler and Jessica McKenney, Marjorie Rawls Roberts PC (St Thomas - HQ)
for the development, construction, reconstruction and renovation of the facility. In addition, the amendment provides for the imposi - tion of an economic recovery fee (ERF) to finance, fund or cover the costs incurred for renovation, reconstruc - tion, construction, improvement and development of hotel properties and related facilities or infrastructure. The amount of the ERF is the difference between the percentage rate of the hotel room occupancy tax applicable at the time of the application (currently set at 12.5%) and a percentage rate over such tax, not to exceed 7.5%, determined by the applicant and subject to implementation protocols. The ERF can be collected and deposited into an ERF trust account for a period of 30 years and is only available to appli - cants who apply before 31 December 2028. Any funds remaining after completion of an approved project may be used by the developer for other expenditures to improve or enhance the ERF project. Enterprise Zone Commission (EZC) Programs Businesses seeking to invest in historic preserva - tion have additional opportunities through the EZC Programs, administered by the EDA and offering tax incentives for businesses investing in designated his - toric and commercial districts. The Enterprise Zone Commission administers three programs: the Enter - prise Zone Tax Credit program, the Enterprise Zone Plan and the Commercial Zone program. Under the Enterprise Zone Tax Credit Program (“Tax Credit Program”), the licensed business (or owner- occupied residence) must be within the designated zone, the applicant must be a USVI resident and the actual investor in the Enterprise Zone (“EZ”), and eco - logical compatibility standards with the area must be met. The business must employ at least two residents of the USVI and invest a minimum of USD10,000 in constructing, renovating, or rehabilitating a building. The benefits last for ten years and include: • non-refundable gross receipt or income tax credit equal to the construction or rehabilitation of a building within the EZ within a fiscal year; • a non-refundable gross receipt or income tax credit equal to 10% of expenditures within a fiscal year
for investment in machinery and equipment for the business; • a gross receipt tax rate of 3%; • a one-time non-refundable USD500 income tax credit for every job created for USVI residents; and • a property tax credit against all taxes imposed equal to the increase in property taxes assessed due to renovation, rehabilitation or construction of property within the EZ. Under the Enterprise Zone Plan Program, qualifying businesses must meet the requirements of the Tax Credit Program and conduct business activities in accordance with the adopted plan for the EZ in which they were established. This includes for activities such as museums, art galleries, cultural businesses and greenbelt businesses in Christiansted, St. Croix; for experiential tourism and arts and restaurants in the Garden Street-Upstreet area in Charlotte Amalie, St. Thomas; for businesses that promote the USVI’s his - tory and culture and technology related businesses in Frederiksted, St. Croix; and for start-up businesses related to technology, the environment or USVI culture in Savanne-Downstreet in St. Thomas. Benefits under the Enterprise Zone Plan Program include an income tax exemption of 90%, a 100% exemption from the gross receipts tax, and a 100% exemption from prop - erty taxes. These benefits last for five years from the date of the certificate. Research and Technology Park (RTPark) Program The RTPark Program seeks to support the USVI’s expanding technology and knowledge-based sec - tors in order to promote the growth, development and diversification of the USVI economy. It also works to broaden the capabilities of the University of the Virgin Islands (UVI) by giving it financial support and train - ing opportunities for UVI students, and by creating a supportive research environment that combines the resources of UVI with those of the public sector and private industry. In Fiscal Year 2023, UVI received approximately USD3,100,000 from the RTPark Pro - gram. The RTPark Program is open to technology- and knowledge-based businesses and is ideal for busi - nesses in health fields, marine science, and sustain - ability, especially where technological resources are
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