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Sales Tax for VI?

ms411
January 28, 2015 07:47AM

Registered: 8 years ago
Posts: 3,521

My prediction. It was proposed a few years ago, but was voted down in favor of increasing taxes on businesses.

Puerto Rico collects sales tax from cruisers making purchases on the ship while the ship is docked there and until it leaves the PR boundary. So they make money even if people stay on the ship!

Re: Sales Tax for VI?

vicanuck
January 28, 2015 08:23AM

Registered: 8 years ago
Posts: 2,285

Barter among businesses and the underground economy is already huge in the VI and I would expect it would increase significantly if a sales tax were instituted.

Re: Sales Tax for VI?

STXBob
January 28, 2015 08:57AM

Registered: 12 years ago
Posts: 2,131

There's already a built-in sales tax. The Gross Receipts Tax is 5%, and it's often added multiple times as goods go from wholesaler to retailer to consumer, etc. The Gross Receipts Tax is also evaded by many businesses. The govt could add "enforcement" to their agenda (can you imagine?!). Or better yet, switch to a VAT, which is designed to be self-enforcing, and is charged just once as goods move through the supply chain.

Re: Sales Tax for VI?

vicanuck
January 28, 2015 10:58AM

Registered: 8 years ago
Posts: 2,285

I believe I heard a while back (likely on talk radio) that if a VAT or Sales Tax were implemented to replace the Gross Receipts Tax (GRT), it would need to be 15 - 17% to make up for the multiple levels of GRT.

I'm sure the government would think that a hidden tax is much more palatable for the electorate.

Re: Sales Tax for VI?

tedc
January 28, 2015 11:14AM

Registered: 6 years ago
Posts: 70

Not intending to disturb the "change is bad" contingent again, but...

Instead of trying to squeeze more out of the current supply chain, why not just introduce an entirely new (for the VI) taxed market and put together a quick "full legalization" bill for recreational marijuana? Grow, sell, and public smoking lounges... each step taxed, revitalized STX farming industry, revitalized tourist industry.

Blah, blah, "bringing bad element to the VI" arguments - it happens already, it's just underground, not taxed at all, and feeds the criminal element with more money and guns. Why not feed the government coffers instead?

Re: Sales Tax for VI?
avatar

CruzanIron
January 28, 2015 11:40AM

Registered: 5 years ago
Posts: 2,399

Or we can meter the taxi's so that their income can be verified and taxed.

Re: Sales Tax for VI?

IslandHops
January 28, 2015 11:51AM

Registered: 9 years ago
Posts: 929

Quote
CruzanIron
Or we can meter the taxi's so that their income can be verified and taxed.

+1

Re: Sales Tax for VI?

Alana33
January 28, 2015 12:09PM

Registered: 6 years ago
Posts: 12,041

Re: Sales Tax for VI?
avatar

Exit Zero
January 29, 2015 10:28AM

Registered: 10 years ago
Posts: 2,254

A sales tax would likely produce less overall revenue contribution than the Gross Receipts tax since only the end buyer would pay the tax - instead of each business along the chain of sale as it is now - [even with the tax evasion currently].
The Gross Receipts Tax is a very regressive form of taxation and pushes up the cost of goods.

The taxi metering might increase personal income tax collection but would have little effect or be affected by a sales tax.

A sales tax would certainly reduce the cost of some goods as they would only be taxed once at the point of sale.

Main Street would obviously oppose a sales tax as that lack is a very strong selling point for the cruise ship market.

Re: Sales Tax for VI?

IslandHops
January 29, 2015 10:33AM

Registered: 9 years ago
Posts: 929

As the gross receipts tax has been leveraged for debt obligations for years to come, the introduction of a sales tax would have to be on top of the existing gross receipts tax (which no one would put up with), or require significant restructuring of the majority of the territories bond obligations - a huge undertaking calling into question a far closer examination of the territories finances.

I'd say chances of a sales tax being introduced are next to none.

Re: Sales Tax for VI?

ms411
January 29, 2015 11:08AM

Registered: 8 years ago
Posts: 3,521

Not everything has to qualify as a sales taxable item. Start small and add items gradually. Happens all the time.

Re: Sales Tax for VI?

Alana33
January 29, 2015 12:58PM

Registered: 6 years ago
Posts: 12,041

If I have to pay a sales tax in the VI then it's definitely time to move stateside. We get little to nothing for the taxes we already do pay.

Re: Sales Tax for VI?

OldTart
January 29, 2015 01:19PM

Registered: 6 years ago
Posts: 6,524

Quote
Alana33
If I have to pay a sales tax in the VI then it's definitely time to move stateside. We get little to nothing for the taxes we already do pay.

I hear you. Prices have jumped way up in the last couple of years (not that stateside prices haven't) and another jump will be a serious dent not only to locals but to visitors. Already and for several months now, visitors have been remarking that the deals on liquor are just about non-existent these days when they can buy the same thing at home (including Cruzan rum!) for pretty much the same price they pay here so it's not worth it to schlep back home.

Re: Sales Tax for VI?

FL Barrier Islander
January 29, 2015 01:40PM

Registered: 13 years ago
Posts: 501

I'm not sure I understand this thread. Isn't "duty free shopping" one of the incentives and one of the key marketing points that bring tourists to USVI? And wouldn't sales tax impact the tourist industry where people and cruise ships would feel compelled to avoid the USVI and go to other locales that are duty free? Or are you saying "sales tax" is different than "duty"? Sorry......I can be thick sometimes but would appreciate some enlightenment on my thoughts.

Re: Sales Tax for VI?

ms411
January 29, 2015 02:07PM

Registered: 8 years ago
Posts: 3,521

Yes, duty free is different from sales tax. Duty are fees imposed by Customs for imported goods supposedly to increase their cost so imported goods do not have price advantage over locally produced goods.

Duty free goods are supposed to be a draw in destinations that don't produce anything so they generate revenue from trade. However, the U.S. has been reducing or eliminating duties on many items that are imported into the States, so duty free for Stateside residents traveling outside the U.S. is getting to be less of a bargain. In many countries only visitors qualify for duty exemption. I had to show passport and give ship name and cabin # when purchasing a duty free bag in Grenada.

PR sells duty free at airport and cruise docks, yet they still have a sales tax that applies to other items.

Governments get very creative in creating new taxes and revenue when they are cash strapped.

Re: Sales Tax for VI?

FL Barrier Islander
January 29, 2015 03:12PM

Registered: 13 years ago
Posts: 501

Thank you for the 411!

Re: Sales Tax for VI?

denvertired
January 30, 2015 04:17PM

Registered: 3 years ago
Posts: 113

I live in Denver and can tell you that the legalization of MJ has raised an incredible amount of tax revenue but, there is always more to the argument than just money.
The prices of commercial property have sky rocketed
It's harder to get employees that can actually pass a drug test (I run a bus company and drug testing is mandatory)
No one has stopped to figure out if there is a legal limit for driving
There hasn't been a lot of crime around the MMJ centers but there have been some very suspicious fires at grow facilities. Fires destroy crops and records.

All of that said Colorado collected $65,000,000 in tax revenue

Re: Sales Tax for VI?

Alana33
January 30, 2015 06:25PM

Registered: 6 years ago
Posts: 12,041

Our senators will no doubt soon be putting that consideration in their pipes and smoking it.

Re: Sales Tax for VI?

vicanuck
January 30, 2015 07:07PM

Registered: 8 years ago
Posts: 2,285

Such an obvious revenue generator...

Re: Sales Tax for VI?

Spartygrad95
January 30, 2015 08:31PM

Registered: 4 years ago
Posts: 1,885

As someone who never "inhaled" but understands business.. Marketing the VI as the Amsterdam of the Caribbean seems like a way to separate us from the rest of the islands

Re: Sales Tax for VI?

Alana33
February 03, 2015 06:11PM

Registered: 6 years ago
Posts: 12,041

Yep....Lala land of the Caribbean.wink
I'm sure the criminal element will enjoy having stoned tourists wandering around to pick off.



Edited 1 time(s). Last edit at 02/03/2015 06:13PM by Alana33.

Re: Sales Tax for VI?

Spartygrad95
February 03, 2015 06:48PM

Registered: 4 years ago
Posts: 1,885

Because stoned people are more of a target than drunks?

Re: Sales Tax for VI?

Alana33
February 03, 2015 07:18PM

Registered: 6 years ago
Posts: 12,041

Nope, they're both pretty good!

Re: Sales Tax for VI?

Spartygrad95
February 03, 2015 07:24PM

Registered: 4 years ago
Posts: 1,885

I would venture to say more stoned people have their wits about them than the typical drunk I see here

Re: Sales Tax for VI?

OldTart
February 03, 2015 08:06PM

Registered: 6 years ago
Posts: 6,524

Quote
Spartygrad95
I would venture to say more stoned people have their wits about them than the typical drunk I see here

I sometimes think that that wonderful old movie, "Reefer Madness" remains the lynchpin for many. big grin

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