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Tuesday, September 27, 2022
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Attorney Says Legislators Can Adjust Tax Rate

Dear Source,
In reviewing Sen. Almando Liburd's comments in the article, New V.I.
Millionaires Might Not Be Happy About It
, I wanted to correct the Senator's misstatement that the V. I. Legislature is powerless to provide real property tax relief to residents of the U.S. Virgin Islands.
As one of the attorneys who litigated the real property tax case, the case held, in short, that all real property must be assessed at its actual, market value. That's it. That is required to ensure that all taxpayers are treated equally with respect to how their taxes are calculated. Nothing in the litigation in any way prohibits the V. I. Legislature from amending the tax rate. The tax paid by property owners is determined by multiplying the assessed value of the property by the tax rate. While the assessed value must be actual, market value by federal law, the V.I. Legislature determines the tax rate.
The way it is supposed to work is that the government determines its revenue needs, evaluates the aggregate assessed value of property subject to taxation, and then determines a tax rate. Unfortunately, as noted by the District Court, that is not the way it historically has worked in the Virgin Islands. Here, the tax rate has remained static for decades, and the government tinkered with the assessed value of the properties as a way to raise additional revenue without having to get the Legislature to change the tax rate.
In short, if, once the reassessment project has been completed, Sen.
Liburd believes that the tax burden on Virgin Islands taxpayers is too high; the short answer is that he should sponsor legislation to reduce the rate at which real property is taxed.
Chad C. Messier
St. Thomas

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