EFTA00811471.pdf

Monday. October 22. 2018 VIRGIN ISLANDS The Virgin Islands Daily News 3 Excise tax violates U.S. Constitution, Gomez rules By BRIAN O'CONNOR involves Reerce was unconstitutional. Gomez ini• in the Virgin Islands, in addition economic protectionism. Gomez Dairy News Staff Services lac., rep- daily dismissed that portion of the to goods imported into the Virgin wrote. resented by Alex complaint. in pan because the gov- Islands. The government "has not as- A federal judge's ruling could Golubssky. ernment is neither a person. nor a However, Internal Revenue Bu- serted any 'legitimate local pur- imperil $45 million in government Reefro spc• federal agency, which arc covered reau employees testified during a pose' for this scheme, let alone tax revenues, court records show. cialires in in• under other sections of federal law. deposition that the government has evidence or argument dot 'this US. District Court Judge Curtis stalling refrig- However. the Commerce Clause not charged local businesses the purpose could not be served as Gomez ruled on Sept. 28 that the eration units. — and constitutional law generally exetse tax, despite the change in well by available nonditetimina- excise Lax — levied against items air conditionen, — allows for claims against gov- law. Gomez wrote. tory means.'" Gomez wrote, quot- and goods imported into the Virgin is makers and ernments. so Gomez reversed his The opinion quotes Glenford ing earlier case law. "Accordingly. Islands — violated the Commerce Curbs water makers dismissal. Hodge. the supervisor of excise tax the Court holds that the Section 42 Clause of the U.S. Constitution. Gomez on local boats. Excise taxes in the territory — for the Internal Revenue Bureau. — as interpreted and enforced by The tax is worth 545 million in according to <sealed in V.I. Code Title 33, Sec- as representative of the govern- the GVI — violates the Commerce revenue for the territorial govern- Gomee's ruling. The V.I. Internal tion 42 — date back at least as far ment position. Clause." ment, budget documents show. Revenue Bureau — which col- as 1980, when Congress passed a "We have no basis to charge a Gomez ordered $5.287.74 in It wasn't clear whether the rul- lects taxes for the government — law allowing for the collection of tax on something that's not im- collected excise taxes returned to ing would free businesses from ex• changed Reck° for importing vari- the tax whenever an item is brought ported into the territory." Hodge is Reefco else tax obligations. or create new ous items over a number of years. into the territory Two years later. quoted as saying. Internal Revenue Bureau Di- taxes for businesses not currently Territorial law allows an exemp- Congress instructed federal offi• Government regulations relating rector Marvin Pickering directed covered by the tax. tion to the excise tax for boats, cials to assist in the collection of to the excise tax have not been up• questions to Walker. The government. represented boat engines and boat pans. the tax. dated since 1983. Gomez wrote in Walker declined to comment, by V.I. Attorney General Claude Reel& sued the government. In 1987, a case challenging the his opinion. citing the ongoing legal case. Walker. has filed for an appeal arguing that the tax collected was excise tax as an illegal barrier to The government "ignores the The case is tentatively scheduled with the 3rd U.S. Circuit Court of improper. The government argued commerce made it to the U$. Su- corrective amendment to Section for hearing during a December Appeals. that the pans in question — in- preme Court. 42 and continues to implement 2019 visit by the 3rd Circuit judg- The Commerce Clause gives the eluding small refrigerators and ice Justices judged the ease moot, the pre.1984 statute that the Third es. court documents show. federal government sole power to makers — were not boat parts. in pan because of a 1984 change Circuit held was invalid under the — Contact Brian O'Connor regulatecommerceamong the states. In an amended complaint, Reef- to the law that required excise tax Commerce Clause." he wrote. as 140414.9130 or email boron- The lawsuit that sparked the ruling ea also argued that the excise tax to be levied against goods made The law thus represents illegal [email protected]. Yacht Haven Grande, EDA come to terms over benefits By BRIAN WCONNOR bfc30‘f EDA togued 1'acht Haven's certificate Ciatay News Stan lud Ixot — %%Inch lists 'he compuny -speak re- unckat about quirerrtnts for the program to count ST THOMAS — The VI. Foe- \View: Of ram in. mccetary donations instead norm Development Authority and the kind contr-Sut ions "Mk follow the a...Idioms" lie said. owners of Yacht Haven Grande have mild be counted, "The certificate. when it done, is a settled over the company's tax exempt NIL:41331 said contract between the EDC and the slam officials said. "It would have The disagreement prompted EDA been cheaper Island Global las filed at applica- officials to hold a "show cause" hear- to pay the fine tion to tredify its certificate to count ith ing last week, in which the company Thomas year ago," kind retributions in addition to mon- Mukamal a he was ordered to show cause why it's said. "We wanted easy contributiorn. Rigid aid. EDA status should not be revoked suspend• to force them to staff are m theI:cocoa of mincing the ed cc rrinds&d take a position." spoken:m.84;gs said. Officials from Yacht Haven USVI. The dispute over comnbutions is the Similar settlements are a regular pan which is owned by Island Global second time this year finthrial tensions of the EDC pecgram. Biggs said. Yachting, lad taken the position that between WA aril Island Global Yacht- "1 think stele moving ahead." he in-kind contnbutions — donations of ing have spilled into public. IG1LAYII said "Settlements are all pan of the time and space for events for com- St. Thomas Holdings. aruther subsid- proca munity stoups —should coon( finan- iary company. was paced under a ben Once additinnal monetary contribu- cially ;ward community contribution for 549.036.90in unpaid gross receipts tions are made. Pt company will be obligations required to maintain the taxes on June 25. The company was re- :tie veers Of Men fully renewed Bus said. The FDA company's Economic Development leased from the lien — metwating the he V.I. Revive Festwal in December draws a large crowd to Yacht Haven welcomes in-kind contributions. the, but Commission program status. EDA tows had been paid or administrathey Grange on St. Thomas. The Economic Development Authority and the officials are bound a follow kites staff said they were bound by the letter waived — on Oct. 4. Property's owners have settled a dispute over the company's tax-exempt ofthe law, Boggs said. of the law to consider only monetary The AYH stands for Amman taws and whether in.krid contnbutons of space ft( events for community "Now that we've settled, we consider contributions toward the total. Yacht Haim, anodes EDC bor.& groups shosid count toward nsoblgatons under the Economic Development them to be in fullcompliance." he sari Thomas Mukamal. CEO of Island ciary. Mukamal said. The Red lkok• Con-reason program Homier. Mukamal said the corn- Global Yachting. said the company based retail location was awaiting pony will hue to scrutinize community routinely often space at Yacht Haven miewal of its EDC benefits for two cal hire rewirenwrns are all part of interne lax events to host at Yacht Ibsenasa result Grande foe community events Those years, at which point the Internal Rev the EUM EDC program_ In exclanµe • I00 percent exemption on gross of the decision. events come at a cost to his company. awe Bureau mistakenly charged the for meeting MOW Cnteria — rewired receipt tax "Now we know" he said. "When Mukarnal company gross receipts tax it was ex- community contributions can vary • 100 percent exemption on business somebody asks us to do it. We'll likey "We donate the venue and then =ivied front. Mukamal said. from company to company and num- property sex have to be a little mote selective in provide the cleaning services. Hai- "They mina have bawd us up for ber in the lens of thousands of dollars • 100 percent exemption on excise how we do it. That's a potential and My staff, if it's an indoor maw." he that pence he said. — EDC beneficiaries reccnv the fol- tax payments unfortunate" said. 'All of that stuff can be quite The taxes were waned on renewal. towbar:tax benefits: • Reduction in the custorm duty EDA board members Jose Pam. expensive." Mukamal said • 90 perms reduction in corporate from the standard 6 percent to I percent Haklane Davies. Juan Figuerea and The dispute reached the Economic Community contributions, mini- income tax EDA Assistant Executive Direct& Eugene Farrell vend unanimously for Development Commission in part mum employment standards, and lo - • 90 percent ;Simian in personal Waync Biggs Jr. said officals were the scnkmag EFTA00811471