Fuel tax increases for gasoline and diesel from seven to 14 cents per gallon will go into effect Monday, according to the V.I. Internal Revenue Bureau.
“The fuel tax will be collected at the time of importation into the territory. On St. Thomas, importers must pay the 14 cents tax at the Excise office in the Nisky Shopping Center before clearing the shipment," said IRB Director Claudette Watson-Anderson in a statement. On St. Croix, importers must pay the 14 cents tax at Gallows Bay and the airport.
“Importers are reminded that there is no cash collection at the ports of entry on both islands,” Watson-Anderson said. “Credit cards and checks are accepted for payment of the fuel tax.”
The change in the tax came about from recent legislation sponsored by Sen. Carlton "Ital" Dowe and six other senators to raise the fuel tax from seven cents to 14 cents, while eliminating the current 6 percent excise tax on imported gasoline and diesel. The 6 percent tax has not been collected because gasoline and diesel were being produced within the territory at Hovensa refinery, which has ceased refining but still supplies gasoline imported through its facilities.
If the tax remained on the books, when the territory starts importing gasoline in quantity, gas prices would increase some 21 cents more per gallon. The new legislation allows some increase, but prevents it from rising the full amount.
The new fuel tax revenues are to be allocated to purchase new, more efficient power generating units in both districts and help the Water and Power Authority secure bond financing, all of which should lower fuel consumption, and hence lower customer's bills, currently among the highest in the nation.
Importers will be required to confirm the gallons of gasoline or diesel being imported in order to calculate the tax due each and every time there is a shipment to be released. A new tax form has been implemented to assist with this process.
In addition, the monthly fuel tax return has been revised to allow for the upfront payments of this tax to be treated as a credit towards each month's tax liability. Fuel tax returns are due 30 days following the close of each month.
Revised forms are available at the excise tax locations and also on the bureau's website at www.viirb.com.