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HomeNewsArchivesYEAR 2000 V.I. TAX REFUNDS BEING MAILED

YEAR 2000 V.I. TAX REFUNDS BEING MAILED

June 1, 2001 – The Bureau of Internal Revenue expects to process and mail about 4,500 tax-year 2000 refund checks by Friday — representing, it says, about one-sixth of the total 25,000 taxpayers owed refunds for last year.
Louis Willis, IRB director-designate, said Thursday he is confident "all refunds will be paid in time to save the government the expense of having to include interest."
Shortly after he took over as acting director, Willis promised to process refunds in a more timely fashion in order to eliminate the costly interest the government has been forced to pay in the past because of delayed refunds.
One tax-related expense the government may find it impossible to avoid, however, is a result of the Bush administration tax cut approved by Congress on Saturday and about to be signed into law. Because the Virgin Islands tax code mirrors that of the federal government, local taxpayers will be entitled to the same tax breaks as their mainland counterparts. "Single taxpayers are entitled to receive $300, single heads of households $500, and married couples who file jointly $600," Willis said.
According to CBS MarketWatch, describing what will happen on the federal level: "The most immediate impact for taxpayers will come from a new, retroactive 10 percent income tax bracket. The Treasury Department will aim to distribute lump-sum refund checks" of up to $300 for individual taxpayers, up to $500 for single parents and up to $600 for married couples by Oct. 1 to taxpayers who filed their 2000 tax returns by April 16 of this year.
The 10 percent tax bracket was enacted retroactive to Jan. 1 on the first $6,000 of income for individuals, $10,000 for single parents and $12,000 for married couples. At present, the lowest income tax rate is 15 percent. The lump-sum refunds are intended to jump-start the economy by encouraging spending immediately, regardless of how much taxpayers may wind up owing at the end of 2001.
Other than the retroactive provision, the new rate changes will begin to take effect July 1. The lump-sum payments also could offset the higher withholding now in effect for 2001.
Over gradual phase-in periods of five to 10 years, the legislation will result in cuts in marginal income-tax rates, doubling of the $500 child credit, elimination of the "marriage penalty," repeal of the estate tax, and the addition of expanded education and retirement savings incentives. The child credit goes up to $600 for 2002. Part of the credit is refundable to some lower-income parents who have no income-tax liability.
According to Willis, the local government will have to pay out about $20 million under the retroactive provision. He said he does not know where the funds will come from, but "administration officials are to meet soon to find a solution."
Willis said it is possible the federal government will reimburse the territory for some or all of the liability, as it will do in the case of the increased child tax credit.
At an all-island tax conference scheduled later this month, the U.S. territories and dependencies are expected to lobby heavily for Washington's assistance in meeting the tax-cut rebate requirement.
The tax-cut burden on the V.I. government comes at a time when the territory already is appealing to Washington to lift the burden of the earned-income credit. Again because of the mirror system, that provision results in the local government paying refunds to households that fall below certain income levels.
Delegate Donna Christian Christensen said Thursday she is continuing to lobby for relief and is optimistic about the progress being made. If the local government is finding it difficult now to afford what the national tax policy requires, she said, then it may find it impossible in the future.
Christensen said she has been told that the Turnbull administration is taking steps to prepare for impact of the federal tax-cut law.

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June 1, 2001 – The Bureau of Internal Revenue expects to process and mail about 4,500 tax-year 2000 refund checks by Friday -- representing, it says, about one-sixth of the total 25,000 taxpayers owed refunds for last year.
Louis Willis, IRB director-designate, said Thursday he is confident "all refunds will be paid in time to save the government the expense of having to include interest."
Shortly after he took over as acting director, Willis promised to process refunds in a more timely fashion in order to eliminate the costly interest the government has been forced to pay in the past because of delayed refunds.
One tax-related expense the government may find it impossible to avoid, however, is a result of the Bush administration tax cut approved by Congress on Saturday and about to be signed into law. Because the Virgin Islands tax code mirrors that of the federal government, local taxpayers will be entitled to the same tax breaks as their mainland counterparts. "Single taxpayers are entitled to receive $300, single heads of households $500, and married couples who file jointly $600," Willis said.
According to CBS MarketWatch, describing what will happen on the federal level: "The most immediate impact for taxpayers will come from a new, retroactive 10 percent income tax bracket. The Treasury Department will aim to distribute lump-sum refund checks" of up to $300 for individual taxpayers, up to $500 for single parents and up to $600 for married couples by Oct. 1 to taxpayers who filed their 2000 tax returns by April 16 of this year.
The 10 percent tax bracket was enacted retroactive to Jan. 1 on the first $6,000 of income for individuals, $10,000 for single parents and $12,000 for married couples. At present, the lowest income tax rate is 15 percent. The lump-sum refunds are intended to jump-start the economy by encouraging spending immediately, regardless of how much taxpayers may wind up owing at the end of 2001.
Other than the retroactive provision, the new rate changes will begin to take effect July 1. The lump-sum payments also could offset the higher withholding now in effect for 2001.
Over gradual phase-in periods of five to 10 years, the legislation will result in cuts in marginal income-tax rates, doubling of the $500 child credit, elimination of the "marriage penalty," repeal of the estate tax, and the addition of expanded education and retirement savings incentives. The child credit goes up to $600 for 2002. Part of the credit is refundable to some lower-income parents who have no income-tax liability.
According to Willis, the local government will have to pay out about $20 million under the retroactive provision. He said he does not know where the funds will come from, but "administration officials are to meet soon to find a solution."
Willis said it is possible the federal government will reimburse the territory for some or all of the liability, as it will do in the case of the increased child tax credit.
At an all-island tax conference scheduled later this month, the U.S. territories and dependencies are expected to lobby heavily for Washington's assistance in meeting the tax-cut rebate requirement.
The tax-cut burden on the V.I. government comes at a time when the territory already is appealing to Washington to lift the burden of the earned-income credit. Again because of the mirror system, that provision results in the local government paying refunds to households that fall below certain income levels.
Delegate Donna Christian Christensen said Thursday she is continuing to lobby for relief and is optimistic about the progress being made. If the local government is finding it difficult now to afford what the national tax policy requires, she said, then it may find it impossible in the future.
Christensen said she has been told that the Turnbull administration is taking steps to prepare for impact of the federal tax-cut law.