The hotel occupancy tax increases from 10 percent to 12.5 percent on Jan. 1, 2016, and hotel owners need to be aware and ready to collect and remit the new amounts. The tax on timeshare estates will also increase from 8 percent to 10.5 percent. The new revenues will go to promote local agriculture and help finance sports programs and sports tourism.
The measure was sponsored by Senate President Neville James at the request of Gov. Kenneth Mapp and requires at least $1 million of the new, additional revenues be directed to the Department of Agriculture’s Agriculture Revolving Fund. Another $1 million must be used to promote sports tourism.
Half a million dollars annually is devoted to the Department of Education for interscholastic sports on St. Croix, St. Thomas, St. John, the British Virgin Islands and Puerto Rico. And half a million dollars is earmarked for the Department of Sports, Parks and Recreation for recreation and sports activity programs.
The remaining new funds are to be divided four ways, between advertising for each of the three major U.S. Virgin Islands and advertising the "marine industry of the Virgin Islands."
According to Mapp, the funding will support a soon-to-be-created farmer’s cooperative to grow and provide fresh fruits, vegetables, seasonings and herbs for the territory’s public school lunch program. That funding will allow more of the $8.5 million in federal dollars the territory receives for the lunch program to stay within the local economy, instead of being spent to purchase goods from off-island, according to Mapp.
In committee hearings, Internal Revenue Bureau Director Marvin Pickering said the IRB estimates the increase should generate an extra $5.8 million or so per year, on top of the roughly $20 million per year the tax currently generates.