Join discussions on moving to and living in the USVI, ask questions, share info & tips! (Vacationing? Visit Travel Message Board)


90% personal tax credit?

nautyrn
December 14, 2015 11:48AM

Registered: 2 years ago
Posts: 12

Does anyone ACTUALLY get this? I am researching relocating and, of course, the cost of living is a consideration and this piqued my interest.

How does one go about getting it? Is there an application process? (after becoming a "bona fide" resident, of course)

TIA!

Re: 90% personal tax credit?
avatar

CruzanIron
December 14, 2015 11:50AM

Registered: 4 years ago
Posts: 2,383

Never heard of such a thing.

How did you hear about it?

Re: 90% personal tax credit?

OldTart
December 14, 2015 12:43PM

Registered: 6 years ago
Posts: 6,524

No such thing. Our tax deductions are exactly the same as those on the mainland and exactly the same forms are used for filing returns. The only difference (which in no way affects your deductions) is that the taxes stay in the USVI.

Re: 90% personal tax credit?

caribstx
December 14, 2015 12:46PM

Registered: 4 years ago
Posts: 418

He must be ready something to do with the EDA/EDC program where some businesses MAY qualify for a 90% reduction in certain taxes.

But, this is not for normal residents or working people.

We have to pay the full freight.

Re: 90% personal tax credit?

Alana33
December 14, 2015 12:47PM

Registered: 5 years ago
Posts: 11,580

It may be applicable if you're a business relocating to the VI under the terms for EDC benefits, if qualified.
Not for personal income tax, however.
If you find out differently, please.....let us all know!wink

Re: 90% personal tax credit?

nautyrn
December 14, 2015 02:38PM

Registered: 2 years ago
Posts: 12

It is kind of like getting medical information off WebMD...

It was a Newsweek article and also cited in Fortune magazine (the two reasonably reliable sources is what made me wonder)- both specifically stating corporate AND personal tax credit. I tried to read the tax code but that made my head hurt...I do have my accountant looking into it just to verify. If the news is good I'll be shouting it from the rooftops.

Re: 90% personal tax credit?

janeinstx
December 14, 2015 02:48PM

Registered: 5 years ago
Posts: 612

Re: 90% personal tax credit?

OldTart
December 14, 2015 02:59PM

Registered: 6 years ago
Posts: 6,524

The Newsweek article is here and clearly addresses tax shelter for businesses:

[www.newsweek.com]

Re: 90% personal tax credit?

nautyrn
December 14, 2015 04:09PM

Registered: 2 years ago
Posts: 12

Quote
OldTart
The Newsweek article is here and clearly addresses tax shelter for businesses:

[www.newsweek.com]

It also clearly says "personal income taxes" - paragraph 5, below:

"What’s a company like this doing in the U.S. Virgin Islands? With the blessing of the U.S. Treasury and Congress, the islands offer a 90 percent reduction in U.S. corporate and personal income taxes. Much of corporate America already pays federal taxes well below the statutory 35 percent rate. But in the U.S. Virgin Islands, the average rate is just 3.37 percent."

Re: 90% personal tax credit?
avatar

CruzanIron
December 14, 2015 04:28PM

Registered: 4 years ago
Posts: 2,383

Looks like Newsweek is wrong.

Re: 90% personal tax credit?

OldTart
December 14, 2015 04:42PM

Registered: 6 years ago
Posts: 6,524

Quote
nautyrn

It also clearly says "personal income taxes" - paragraph 5, below:"

I read the article. Semantics. In context it means that the owners of the companies can claim exceptionally large deductions on their personal income which is derived from the business.

Re: 90% personal tax credit?

nautyrn
December 14, 2015 05:12PM

Registered: 2 years ago
Posts: 12

Quote
CruzanIron
Looks like Newsweek is wrong.[/quote

WHA..??? You mean I have been mislead by a major media outlet (or 3) and the interwebs?? Say it ain't so....

This is why I contacted my tax accountant and followed up with some real life context - all these nice folks. happy

Re: 90% personal tax credit?

OldTart
December 14, 2015 05:23PM

Registered: 6 years ago
Posts: 6,524

Did you read the link which janneinstx posted?

Re: 90% personal tax credit?

nautyrn
December 14, 2015 06:12PM

Registered: 2 years ago
Posts: 12

Quote
OldTart
Did you read the link which janneinstx posted?

Thank you, I did.

And let me be very clear, I'm not looking to avoid paying taxes. But I also pay A LOT of taxes, so a 90% credit on my federal tax rate makes me look deeper.

I understand how the list of benefits appear in the context of corporate incentives but regardless of how I interpreted it when I read it on this, or any website, I would still have asked the question. I am a WHY person. All the various sites (VIBIR, usvieda, and others) say "90% reduction in personal income taxes" which could be interpreted as the corp employees get a lower tax rate (which seems weird but would be a useful recruiting tool for a corp), the general population gets a lower tax rate (less weird but still strange) or....?....and I would be remiss if I did not seek to understand the context. And some may say that the very thought is crazy but there are programs where I live now to encourage growth in economically depressed areas - everything from student loan forgiveness to cash incentives to relocate - so reading that there is a tax incentive to move to an area that is historically more expensive and might have slow economic growth did not seem completely out of the realm of possibility. I researched many places including the site listed above but, alas, I'm a nurse not an accountant, so I also contacted my tax accountant who is very good at what she does but not familiar with the USVI. So rather then pay hundreds of dollars for her to research the issue (before it even applies to me!) I thought I would ask the other experts - the people who live there. And now I have my answer.

Re: 90% personal tax credit?

OldTart
December 14, 2015 06:19PM

Registered: 6 years ago
Posts: 6,524

That's what we're here for, glad to help.

Re: 90% personal tax credit?

caribstx
December 15, 2015 08:03AM

Registered: 4 years ago
Posts: 418

My company could easily qualify for EDA benefits. But, I don't want the government telling me who to hire, how many to hire or what to do with my charity dollars. Its just not worth it.

Re: 90% personal tax credit?

Donnasculpts
December 16, 2015 09:35AM

Registered: 3 years ago
Posts: 39

Yes there is a 90% reduction in personal income tax for EDC resident shareholders ...
"A 90% exemption also applies to the individual income tax liability of V.I. resident stockholders on income derived from the dividends of the corporation or, for S corporation or partnership distributions."
The key being in how you distribute "income". But, yes it can be done relatively easily. There is a nice example on the EDC website.
[www.usvieda.org]

Join the discussion. Click the button below to Login or Register now!

Click here to login

  • Blue Ocean Transport

Moving to the U.S. Virgin Islands?

Settlers Handbook
Only $17.95

The Settlers Handbook for the U.S. Virgin Islands is your guide to moving to St. Croix, St. Thomas, St. John and Water Island.

The current 18th Edition, released in January 2016, will help you explore your dream of island living. A solid reference book, it was first published in 1975. That's 40 years of helping people move to the islands. A must read. Order today.

Order Today

Advertise

Join VIMovingCenter.com Today!

Tell prospective and current residents about your business.

Learn More →

Sister Sites

VITraders

USVI Books & Souvenirs

VInow

USVI Vacation Guide

Living in de V.I.

USVI Relocation DVD

Proud Supporter

VI Olympic Team

For over 45 years, the Virgin Islands has celebrated the Olympic tradition by sending our athletes to compete.

Learn More →