Dear Source:
I am writing to protest the another proposed tax on the car-rental industry, a $3-per-contract fee proposed by Sen. Alicia Hansen.
It is naïve to think that because Florida taxes its car-rental contracts, it is okay for the Virgin Islands to do the same. It is a misconception to believe that, because the tourist pays this tax, it will not have a negative effect on our industry and our islands. Each additional dollar charged gives a negative impact to a tourist who has decided to come to the Virgin Islands. We are already much more expensive than the state of Florida. I really don't think anyone should be making comparisons between us and that state.
We V.I. small businesses have been struggling for years to keep our heads above water. With the losses of the hurricane years, the exorbitant insurance charges, lack of government tourism advertising, the doubling and tripling of car rental fees and the lack of inexpensive airline lift, it is harder than ever to do business here.
We have a 4 percent gross receipts tax, a 10 percent corporate tax, an 8 percent hotel tax (people who rent cars also stay in hotels), registration fees, a road tax, business licenses and payroll taxes. Don't you think this should be enough? We need our government to use our money responsibly, not to tax us more whenever it runs out of money to spend!
This particular tax will impact both businesses and tourists. Businesses have to collect the fee, which most likely will be charged on a credit card. This requires the car-rental owners to pay the credit-card companies from 2 to 5 percent, plus sending the government the entire $3. We would have to spend the time to add up this separate and new fee and report it to the government (do we pay gross receipts on this fee?).
Someone in government will have to administer this new tax and make sure car rentals are in compliance. It is my understanding that the Internal Revenue Bureau already has trouble collecting taxes. And we certainly have an overage in the number of workers in the V.I. government. (Just for information purposes, what is the percentage of government workers in the Florida population?)
Why is it that the people of the Virgin Islands will not be able to enjoy the tax cut – not a tax increase – that has been promised by the U.S. Congress? Why is it that we have not enjoyed the prosperity that many stateside citizens are enjoying? Local businesses are reeling under the burdens of a lack of tourism and unfriendly rules, regulations, and taxes. If you think being in business here is easy and overly lucrative, just check out the number of business that fail each year.
To our senators: We need your help in making this government friendly to both business and tourists. We need fiscal responsibility for the taxes we do pay, and no new taxes or fees added to our already burdened businesses. I ask you to please consider all these things, and help keep the cost of doing business down.
Lonnie Willis, vice president
St. John Car Rental
