June 30, 2008 — Gizette L. Thomas, director of the V.I. Internal Revenue Bureau, offered a proposal during budget hearings Monday in Frederiksted that would streamline the process businesses must go through each year to renew their licenses.
Details of the proposal still have to be worked out, Thomas said, but would likely make it so licenses are issued before tax-clearance letters are complete.
"The current tax-clearance process is not the most efficient and business-friendly," Thomas said, elaborating that IRB has experienced high employee turnover in that section, contributing to the delays.
To fix the problem, she proposes to "remove the bureau from the pre-licensing process while still protecting the government's interest through a coordination between the bureau and the department of Licensing and Consumer Affairs."
A draft bill for the senators to consider will come soon, she said.
Meanwhile, Thomas and her team were there to defend the IRB's budget, which comes entirely from the V.I. Government General Fund.
For 2009 the bureau is requesting $11.5 million. Of that, $6.9 million is for salaries for personnel. Another $2.5 million is for fringe benefits — insurance, Social Security and Medicare withholding, and retirement-fund contributions.
Rent is a moderately large expense, coming in at $564,000, with rental for the IRB main office in St. Thomas accounting for $450,000. Air-conditioning work and mold remediation at that rented building are expected to cost IRB an additional $500,000 this year.
Sen. Terrence "Positive" Nelson asked why the property owners did not pay for mold remediation.
"What we have done is notify the landlord of mitigation and submit a claim to the insurance company to see if it is covered," Thomas said. "The landlord did assist us when we began remediation and split a bill. However, the full burden could be on the bureau."
"I don't understand," said Sen. James Weber III. "We paid to modify the building, and then also pay rent? In simpler terms, if you rent an apartment from somebody but the roof leaks and the bathroom doesn't work, surely that's the landlord's responsibility."
The building was originally retail space, but when IRB moved in, it paid to modify the building to suit its needs. The air conditioning that is being replaced was put in by IRB to begin with and, according to the rental contract, the half-million dollars in renovation costs would fall under maintenance and upkeep, Thomas said.
"Rent is very high on St. Thomas," Thomas said, prompting Nelson and Sen. Ronald Russell to say there is plenty of space on St. Croix for an office, and Sen. Carlton "Ital" Dowe to mention his goal of a single, unified, government complex on St. Thomas, owned by the government.
As of May 30, IRB has collected $492 million for fiscal year 2008, according to Thomas. Individual income tax comprises $290 million; corporate income tax, $65 million; gross-receipts tax, $98 million; excise taxes, $15 million; and a million in other miscellaneous taxes.
No votes were taken. Present were Dowe, Nelson, Russell, Weber and Sen. Juan Figueroa Serville. Sen. Liston Davis was absent and excused, and Sen. Neville James was absent.
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