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Some Businesses Surprised by New Taxes

March 29, 2005 – With April 1 a few days away, businesses subject to new taxes that take effect that day are calling on the Internal Revenue Bureau for some guidance. At least one official at the tax bureau says the implementation of three new revenue raisers is still being worked out, and some businesses are asking for a few extra days to prepare.
Anyone who brings in goods on a shipping container or flat rack, who buys tires for a vehicle, or who rents a car in the Virgin Islands will be shelling out more money to the government come April 1. (See "Taxes on Tires, Containers, Rental Cars Start April 1").
IRB Director Louis Willis says the laws that created the container tax, the tire tax and the rental car surcharge have been around for several months. But Willis' legal counsel, Tamra Smalls, said the phones start ringing at the IRB only a few days ago when public notice was given that the taxes would soon take effect.
Smalls said most callers want to find out what's expected of them. On St. Croix, car rental agent Cathy Sisco says the public notice took some business owners by surprise. Sisco is the office manager at Olympic Car Rental.
"They haven't informed us of anything. We haven't been told by the IRB that there was a tax starting, how we're supposed to collect it, how we're supposed to account for it, where we're supposed to send it to. They haven't given us any information. If they would just contact us and let us know what we're supposed to do it would be a big help," Sisco said over the weekend.
Smalls said some tire sellers and agents from some of the larger car rental chains have taken a first step by calling the bureau for clarification. "They just wanted to make it clear that the tax is paid by the person purchasing the tire and the special needs their computers will have to go through in order for the bureau to come in and do some kind of audit,"
Smalls said Monday.
At the rental chains there were similar concerns. The tax bureau official said some were asking for a few days past April 1 to update computers, "in order to properly collect and hold on to this money."
Businesses are being asked to collect the tax at the point of sale and turn the money in at the end of the month. Those collecting container taxes have two different charges to apply, depending on the size of the container. Tire sellers also have two standards, depending on the size of the tire being sold. Car rentals have an easier time of it. They are being asked to apply a daily surcharge to anyone who rents a vehicle from any agency doing business in the territory.
So far, the IRB had made no decisions, Smalls said, but she hinted that it might, once inquiring businesses fax in their concerns.

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