Gross receipts taxes on business revenue go up from 4 percent to 4.5 percent starting Sunday and will apply to all May receipts, due to austerity measures signed into law April 9 by Gov. John deJongh Jr.
DeJongh submitted a package of budget cuts, tax increases and pay freezes earlier this year including a one percent increase to the tax to bridge a 2011 budget shortfall of nearly $75 million and a $132 million shortfall the following year. Tax revenues have slumped during the worldwide recession and halting recovery.
With opposition from business owners who complained they are already hurting from the depressed economy and rising utility bills, senators balked at a one-percent increase in the share of revenue taxed, passing a half-percent increase instead. Increasing the tax from 4 to 5 percent of gross receipts would have amounted to a 25 percent increase.
DeJongh signed the senate measures Thursday after issuing a statement earlier in the week warning that without more revenue, the government could run out of cash in late summer and be forced to make abrupt, drastic cuts and layoffs.
Gross receipts tax in the territory dates back to 1959. Gov. Charles Turnbull proposed increasing the tax to meet budget shortfalls and pay salary increases in 2000 and 2003, but was rebuffed in the Senate both times.
The applicable May 2011 gross receipts tax return is due on June 30, 2011. Revised forms will be available on the Bureau’s website beginning on Monday, May 2, 2011. Taxpayers with questions are asked to contact Tamarah Parson-Smalls, Chief Counsel at (340) 714-9312.
