March 16, 2005 On April 1, three measures passed in the previous legislature to enhance revenues for the V.I. will go into effect. The Internal Revenue Bureau sent out a press release Tuesday announcing a tire tax and a container tax, but IRB chief counsel Tammy Smalls said Wednesday a rental vehicle tax will also be implemented April 1.
Anybody purchasing tires at a Virgin Islands store will have to pay $1 per tire on tires 18 inches or under. If the tires are over 18 inches, the price rises to $2 per tire.
The retailer that sells the tires is responsible for collecting the tax. It must be turned over to the Internal Revenue Bureau within 30 days of the end of the month.
Containers will also be taxed. If the container is less than 40 feet, the tax is $50. If it's over 40 feet, the tax will be $100 per container.
The tax is paid at the Excise Tax Office.
IRB chief of audit Alonzo Brady said he didn't envision that paying the tax would be cumbersome since people bringing in containers already have to visit the Excise Tax office to pay their excise tax.
No containers will be released until the tax is paid.
The rental vehicle tax runs $2 per day.
Smalls said that the bill creating the taxes passed about two years ago. She said the amount of money IRB expected to raise was "never quantified."
She said that IRB waited to implement the tax because the senators did not fund the department's cost. Instead, she said money for training, creation of new forms and upgrading the computer system all came from IRB's budget.
Bernard Liburd, manager at H&H Tire and Battery on St. Croix said customers are already complaining about the tire tax.
"Of course it will be passed on to the customer," he said.
He said the new tire tax comes on top of a charge to get rid of old tires. He said for a 13- to 15-inch tire, the disposal fee runs $3.
Liburd said the container tax will also be absorbed by customers.
"But that's nothing compared to the cost of the homeland security charges," St. John Hardware owner Tommy Bertolino said.
He said that while he will be forced to pass on the cost of the container tax to his customers, they've already been hit with higher costs thanks to the increase in shipping charges. He said shipping companies now have to pay for security at ports and on their containers. Additionally, fuel costs have gone up.
Bertolino estimated that those costs have risen about $225 per container in the past year.
He said St. John Hardware brings in either a 20-foot or a 40-foot container each week.
Terry Hosier, manager at Prime Foods on St. Thomas, is taking a creative approach to the new container tax.
He said every single senator solicits Prime Foods for money for their projects.
"I will take it from that fund," he said.
He said that since many of the senator's projects are for children, that is who will be hurt by his move.
Hosier said he can't pass the container tax along to his customers because "any more increases, and you'll kill yourself."
As for the $2 per day tax on rental vehicles, rental car agencies must collect the tax. They must send it to the IRB within 30 days of the end of the month the taxes were collected.
Thompson Alexander at Thrifty Car Rental on St. Thomas said he didn't see where the extra $2 a day would be a problem for tourists. He said he didn't think Thrifty would have to raise its base rate because of the tax.
Lonnie Willis, owner of St. John Car Rental, said Thursday she plans to post a notice and addition to her car rental rates, which says, "Due to the greed and wastefulness of the Virgin Islands Government, we regret that we are forced to collect a tax of $2 per day on top of your car rental rate. We apologize to you for this cost, and hope that you will write to the Virgin Islands Legislature and the governor to protest this undue cost. We feel the Government gets plenty of money from our 4 percent gross receipts tax and other charges, and would not need this money if they were fiscally responsible."
Connecticut resident Laura Lerman said that everything else is so expensive, another $2 per day on her rental car wouldn't deter her from visiting.
"What's $2 a day for paradise," she said.
Her husband, Kenneth Lerman, said that nearly every place taxes visitors, so the Virgin Islands is not an exception.
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