Oct. 2, 2006 — A bill to give the territory local control over property-tax rules failed to clear Congress Saturday, but proponents hope to see it reappear next month.
"We are the only U.S. jurisdiction having federal law determine property taxes," said an aide to Delegate Donna M. Christensen, Brian Modeste. The bill would give the territory the right to decide how it wants to impose property taxes, he said. "It's not fair. We should be treated like everyone else."
The bill, which would repeal a provision of a 1936 federal law that deals with the territory's real property taxes, didn't make it through the U.S. House of Representatives when it met Saturday, but it could come up in a lame-duck session planned for November.
"While I am disappointed that we will likely have to wait until Congress returns after the election for the House to act on the property-tax measure," Christensen said in a Friday news release, "passage of the bill in the Senate after five months of being held up gives us a great deal of momentum to go forward."
The need for a change in the federal law came to light in 2000 when U.S. District Judge Thomas K. Moore ruled that the local government was incorrectly assessing commercial properties. He ordered the government to begin assessing real estate based on market value rather than replacement cost and to tax all properties at the same rate regardless of whether they were used for residential or commercial purposes.
While Moore's ruling put the territory in line with the 1936 law, it threatens to raise taxes for residential property owners. Although many people in the Virgin Islands believed that the 1936 law became irrelevant after the passage of the 1954 Organic Act, Moore's decision indicated the 1936 law remained valid.
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