Gross receipts taxes will increase for companies getting V.I. Economic Development Commission tax breaks and a new board will be created to cut down on unclassified government employees, if a bill with a basket of fiscal measures approved in committee Tuesday becomes law.
The bill [30-0166] sponsored by Sens. Terrence "Positive" Nelson and Nereida "Nellie" Rivera-O’Reilly would give a 1 percent reduction in total gross receipts tax for paying estimated tax in advance. Legislative Post Auditor Jose George calculated this could reduce receipts by $1.6 million under projected levels of $165.4 million in Fiscal Year 2014. However, George also questioned whether many would be able to pay in advance, given current economic conditions.
The bill also provides for an additional 1 percent tax on gross receipts and excise taxes for companies holding a Virgin Islands Economic Development Commission certificate. This would be "1 percent on the current" rates, so a company paying 1 percent now would pay a 2 percent rate, etc., in contrast to the early payment discount, which is 1 percent of the dollar amount of tax.
The bill also requires all government agencies to suspend all nonessential locally funded contracts for professional services. Management and Budget Director Debra Gottlieb, Finance Commissioner Angel Dawson and Internal Revenue Bureau Director Claudette Watson-Anderson all raised concerns about potential legal issues and about how "nonessential" would be defined.
The bill would also establish a "Workforce Reduction Planning Board" within the Office of the Governor, tasked with reducing the nonservice unclassified workforce of the government to a maximum of 1,000 employees. Dawson and others questioned how the number could be determined in advance.
It would also:
– authorize all branches of government to implement voluntary part-time employment status for a period of up to two years for nonessential employees;
– authorize all branches of government to establish online payment accounts to make it faster and easier to pay fees and taxes through existing web pages;
– authorize the government to commission an asset of the Lonesome Dove Oil Wells, which are property in Texas federal court awarded the V.I. government in a tax dispute;
– reprogram $250,000 to buy portable automated credit card payment machines for police to process traffic ticket payments in real time;
– and authorize the Department of Property and Procurement to negotiate leases with mobile phone tower operators to place towers on government owned property.
The committee amended the bill [Amendment 30-724] and then approved it without opposition. Voting yea were O’Reilly, Sens. Donald Cole, Myron Jackson and Clifford Graham. Sens. Judi Buckley, Terrence "Positive" Nelson and Clarence Payne were absent.
