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)
these reports is compiled and used by the public and private sectors for impact analysis and forecasting. The USVI’s hotel room tax is paid by every hotel guest in the USVI and is imposed at a rate of 12.5% of the gross room rate or rental, which includes the room rental rate, additional charges, service charges and amounts paid to or from agents, online travel com - panies, etc. Residency Requirements Many of the USVI economic incentives and related programmes provide personal tax benefits for USVI bona fide residents on their distributions, allocations or dividends. To be a USVI bona fide resident, a per - son must meet one of five alternative physical pres - ence tests each year, have a closer connection to the USVI than any other location and have a USVI tax home. The most commonly used physical presence test is being in the USVI for all or part of 183 days in a tax year. However, individuals who travel frequently can satisfy the physical presence test by spending no more than 90 days in the US during the year, by having no significant connection to the US at any time during
the year (ie, by not having a permanent home, spouse, minor children or a current voter’s registration locat - ed in the US), by not making more than USD3,000 in earned income in the US during the year (and being present for more days in the USVI than in the US for that year), or by being present for 549 days over a 3-year period (that includes the current tax year and the previous two years) and spending at least 60 days for each of those years in the USVI. The establish - ment of a “closer connection” involves such factors as, having your principal home and belongings in the USVI, filing tax returns as a USVI resident, obtaining a USVI driver’s licence, registering to vote and voting in the USVI, participating in the USVI community, hav - ing a USVI bank account, and, when feasible, having your spouse and minor children in the USVI, although no single factor is determinative. A “tax home” is an individual’s principal place of business. In most cases, the individual must be a bona fide resident of the USVI for the entire year in order to get benefits from a benefited business. However, there is a one-year move exception to the USVI bona fide residency requirement for general tax filings.
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