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New VI Tax on Internet Purchases

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vicanuck
(@vicanuck)
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A bill sponsored by Senator Novelle Francis and favored by the Governor seeks to tax Virgin Islanders for items they purchase through the internet, including on platforms such as Amazon, Target, Walmart and other e-commerce businesses.

How does everyone feel about this latest taxation money grab purported to support the ongoing GERS Ponzi scheme?

Many of us already pay Florida State Sales Tax because we have to ship to STT Cargo, VI Cargo, Paradise Freight and other freight forwarders.

I guess I'll be getting a VPN service to mask my online identity and location. What other strategies are available to avoid such taxes?

Discuss...

 

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Topic starter Posted : November 18, 2020 8:38 am
daveb722
(@daveb722)
Trusted Member

That is totally unacceptable.  If the VI promoted businesses and made their costs lower, I wouldn't have to buy online.  Like you stated when I ship via paradise, I already paid taxes, so do I get those back on my tax return?  Also we pay shipping on top of most purchases due to location already making it more expensive but ultimately cheaper than buying it here.  Again, lower the cost of doing business and we might not have to buy online.  

The selection or products here is abysmal and I knew that coming here permanently, knowing if I needed it, I would have to buy online. 

One example is my wife uses nasacort.  At the local Rx it's about $25 for one.  I was able to get a 2-pack from wal-mart for under $20 (with the shipping factored in).  Although I paid shipping here, I just did a large order and stocked up on items.  

 

Just another band-aid. 😡 

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Posted : November 18, 2020 9:00 am
jaldeborgh
(@jaldeborgh)
Advanced Member

I’m only surprised it’s taken this long given the financial state of the Territory.  This would be a consumption tax, so fair in one sense.  The fact is peoples incomes are fixed and it’s a zero-sum game so any added taxes only reduces people’s disposable income.  Raise taxes, reduce economic activity, it’s Economics 101, in spite of what the government says.  We’ve used deficit spending for too long and now it’s got the Government pinned against the wall, leaving only one option, raise taxes.  A sad state of affairs.  The only long-term cure, elect people who are fiscal conservatives, fat chance that will ever happen in today’s world.

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Posted : November 18, 2020 9:16 am
Sage and rewired liked
rewired
(@rewired)
Advanced Member

"Government is like a baby. An alimentary canal with a big appetite at one end and no sense of responsibility at the other. "    

Ronald Reagan

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Posted : November 18, 2020 9:31 pm
Scubadoo
(@Scubadoo)
Trusted Member

It's hard enough to get suppliers to ship to the VI due to export/customs issues they don't want to deal with.  If they are made to collect sales tax some may not bother to ship at all.  

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Posted : November 18, 2020 10:07 pm
stjohnjulie
(@stjohnjulie)
Trusted Member

I think this is a horrible idea.   This could would complicate things for wholesalers as well. Maybe to the point that many companies would decide to stop shipping here all together.  There is simply no way that local small businesses could afford to stock their stores with all the various items needed in smaller demand like we have here.  Even the bigger stores like Kmart and Walgreens that have all kinds of buying power can’t keep their stores stocked.  I would be unhappy to see any tax imposed or raised prior to the IRB doing its job of collecting taxes from the many many people and businesses who don’t pay or under pay taxes.  

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Posted : November 19, 2020 3:40 am
daveb722
(@daveb722)
Trusted Member

Kmart no longer has any buying power, they are on their way out, probably a year I'm thinking.  Only thing they are getting in is clothing from what I see and a bunch of closeouts.  A walmart would do great, they have awesome inventory management and are in PR, so logistics is already in place.  My biggest complaint with this whole bill is that we are forced to buy from off island due to the incompetence and lack of foresight of the so-called "Senators" and now we have to pay for it.

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Posted : November 19, 2020 8:16 am
NorthsideKevin
(@northsidekevin)
Advanced Member

Yeah.  No.  If they're already charging shipping, you might as well have it shipped free to someone in the U.S., who can ship it to you.  it's the principle of the thing.  I'm not going to support GERS running mismanagement.  There's a whole world of corruption in GERS, from loans to "favors."  Nope.  And I don't think Amazon or any of the others will bother to comply anyway.  They'll just stop sending here, like so many others have in the past.  Go ahead.  Sue 'em.  

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Posted : November 19, 2020 8:59 am
STTsailor
(@STTsailor)
Trusted Member

More taxation never solves the overspending problem. 

The government made unrealistic promises to retirees, didn’t contribute their share to GERS and doesn’t have the balls to reduce benefits. On top of that GERS made a lot of bad investments. GERS would have done much better investing through Vanguard or Fidelity. 

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Posted : November 19, 2020 9:08 am
Sage and janeinstx liked
sttanon
(@sttanon)
Advanced Member

          This essentially taxes items a third time. The community is already having to pay a second import duty on items that already cleared. Hrmmmm or I dont know, what about the local government getting on FedX, UPS, and USPS to stop treating the VI as a international address. I suppose the United States part of the USVI's name is just to be clever or that it sounds good.... Really UPS charging 80 bucks shipping on a item that weighs less than a pound ?!?!?

          This is going to do nothing more that cause additional burden on the community at a time where people are suffering already. This has been proposed a few times already when times werent so tough and caused a uproar. The "Sin Tax" was also supposed to be such a great idea and where has that gone, or I guess a better question would be where did the money go ?

          The "logic" that says this will encourage people to shop local is a total crock. Local retailers many times do not stock the items that people are shopping for or when they do it is usually at markups that price themselves out of consideration. I try to support local businesses but cannot in good faith when I have to pay 2-3 times more because it is right down the street. I know that the businesses have their own problems though and also have to make money. With shipping costs, import taxation etc they cant compete with places like Walmart, Amazon, etc...... The Pirates of the Power Generation (WAPA) with their rates also causes businesses to have such a drastic markup.

          I would hope that the govt realizes that this idea has been a lousy one since the first time it was proposed and let it die again in committee.........

 

 

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Posted : November 19, 2020 10:08 am
Sage liked
Scubadoo
(@Scubadoo)
Trusted Member

Francis Withdraws Internet Sales Tax Bill

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Posted : November 20, 2020 9:07 pm
Jumbie and rewired liked
STTsailor
(@STTsailor)
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He must have logged in to this thread! 

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Posted : November 20, 2020 10:24 pm
Jumbie liked
vicanuck
(@vicanuck)
Expert

They're going to come up with something else...probably a local Sales Tax eventually.

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Topic starter Posted : November 21, 2020 8:37 am
sttanon
(@sttanon)
Advanced Member
Posted by: @vicanuck

They're going to come up with something else...probably a local Sales Tax eventually.

If the net tax got people worked up, sales tax would cause riots

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Posted : November 21, 2020 9:28 am
Jumbie liked
Exit Zero
(@exit-zero)
Trusted Member Registered

Revamp the EDC program - the exclusion of so much available revenue is hardly in proportion to the community benefits the way it is now.

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Posted : November 21, 2020 2:54 pm
East Ender
(@east-ender)
Expert

If they try to get a sales tax, that means goods that are taxed twice-when they come in (Excise) and when the retailer sells (Excise)- will now be taxed a third time (Sales). You think things are expensive now!.

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Posted : November 21, 2020 3:00 pm
Exit Zero
(@exit-zero)
Trusted Member Registered
Posted by: @east-ender

If they try to get a sales tax, that means goods that are taxed twice-when they come in (Excise) and when the retailer sells (Excise)- will now be taxed a third time (Sales). You think things are expensive now!.

You forget the Gross Receipts Tax also added to each transaction of a product!!

 

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Posted : November 21, 2020 9:22 pm
jaldeborgh
(@jaldeborgh)
Advanced Member

When the government is broke and borrowing more is impossible, with no appetite for cutting expenses, there is only one option......increase taxes.  At some point it doesn’t mater how loud the screaming, raising taxes is the only option, which might help change the way people vote.

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Posted : November 22, 2020 8:03 pm
vicanuck
(@vicanuck)
Expert
Posted by: @east-ender

If they try to get a sales tax, that means goods that are taxed twice-when they come in (Excise) and when the retailer sells (Excise)- will now be taxed a third time (Sales). You think things are expensive now!.

I think the Excise Tax was ruled unconstitutional. Hence, the need for a Sales Tax. I'm a business owner...I haven't paid Excise Tax for more than a year.

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Topic starter Posted : November 23, 2020 8:14 am
STTsailor
(@STTsailor)
Trusted Member
Posted by: @jaldeborgh

When the government is broke and borrowing more is impossible, with no appetite for cutting expenses, there is only one option......increase taxes.  At some point it doesn’t mater how loud the screaming, raising taxes is the only option, which might help change the way people vote.

The electorate does not seem to learn from prior mistakes. They only elect big spenders as they are not spending their money.  Now the gov is running out of other people money. 

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Posted : November 23, 2020 10:53 am
Gator's Mom
(@gators_mom)
Trusted Member

Here is information on the ruling on the current excise tax.

https://viconsortium.com/vi-top_stories/virgin-islands-v-i-loses-the-latest-round-in-excise-tax-legal-battle

I am not sure the USVI has any wiggle room in its budget to cut expenses. Yes - noted - senators are pigs for raising their own salaries well beyond what they would be in comparable jurisdictions elsewhere.  

Structural deficits that carry forward from year to year are unfortunate and a mark of failure.

Using WAPA charges as an alternative to taxation by requiring residential rate payers to foot the charge for the government's utility use is vile. 

Regressive taxes such as sales taxes appear fair but are burdensome to poor people - and many many Virgin Islanders are poor people (who vote). There is a case to exclude certain items such as food from sales taxes as an option.

My suggestions would be to

  • double property taxes that are as low as senators' salaries are high. 
  • readjust the EDC exclusions that allow many to live and conduct business in the VI while paying little or no taxes of any kind.
  • contract with an outside company to manage hospital operations - though it could be hard to find a taker.
  • contract with a private company to manage WAPA's power generation - though it could be hard to find a taker.
  • Put greater thought into how to levy taxes on internet purchases in consultation with Amazon, etc. There is a cost to governments that levy these taxes. The cost to set up might supersede the taxes collected.
  • Fix GERS (no idea how).

We can all talk of ways we individually mitigate the cost of living in the VI that has nothing to do with the collective well-being of Virgin Islanders. In the end, a rising tide lifts all ships, so they say.

 

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Posted : November 23, 2020 11:19 am
Exit Zero
(@exit-zero)
Trusted Member Registered

Raising Property Tax will really result in more Virgin Island families having to sell land to off islanders to pay higher tax. STJ folks are particulary hard hit by this when multi million dollar villas are built near their modest long time home and the raise in their appraised value.

Perhaps an adjustment Only After a property is sold would be a plan to stem the sale for raised taxes.

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Posted : November 23, 2020 2:06 pm
islandjoan
(@islandjoan)
Trusted Member

@STTsailor

 

There was a veritable flood of comments on his Facebook page. I popped over there just to see how many comments he got. VIconsortium also got flooded.

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Posted : November 23, 2020 2:22 pm
Gator's Mom
(@gators_mom)
Trusted Member
Posted by: @exit-zero

Raising Property Tax will really result in more Virgin Island families having to sell land to off islanders to pay higher tax. STJ folks are particulary hard hit by this when multi million dollar villas are built near their modest long time home and the raise in their appraised value.

Perhaps an adjustment Only After a property is sold would be a plan to stem the sale for raised taxes.

In the real world, my $1200 VI property tax bill would be at least $8000 annually. Even if my bill were $2400/year it would still be a value bargain.

So double the rate first. Increase on sale of property, sure - but I think that currently occurs.

Aren't homestead rules meant to protect home owners from massive year to year increases? I know the VI found resolution with this happening some years back. Investment property and second homes should have a max percentage of increase year to year, too. FL did this some time back.

Remember when there were no property tax bills for years and years??

 

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Posted : November 23, 2020 2:22 pm
vicanuck
(@vicanuck)
Expert

@gators_mom

I always thought property taxes here were ridiculously cheap. The property taxes on my other, smaller home in Illinois are at least double what I pay here.

I don't mind paying more if I could enjoy enhanced/additional services. But, if they're going to waste it on things like GERS, I couldn't support that.

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Topic starter Posted : November 24, 2020 8:05 am
janeinstx liked
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