On Thursday, the same day the Virgin Island government was in court explaining why it was not up to date on its payments to the Government Employment Retirement System, it announced that it is mailing out more than $4 million in tax refunds.
Most of the refunds – 1,857 – were for the 2015 tax year. An additional 79 were from prior years. This follows the more than 1,800 checks that were sent out on May 11 valued at more than $3.8 million. Approximately 2,000 refund checks for 2015 were mailed out in April.
Although a direct link might not be made between the nonpayment of GERS funds and the mailing out of refund checks, Mapp defended the lapse in payments to GERS as a financial management decision and his administration did manage to find cash for the refund checks. One would imagine that the two funds are separate – one fund into which citizen pay taxes and another fund to which government employees and their employer contribute for retirement.
Yet, it illustrates the precarious financial situation the government is in and how it reacts to that situation.
The mailing out of the checks was good news for almost 2,000 residents.
“We continue to make progress in getting all these refunds out and hope this will brighten a few more faces as we prepare to honor those who gave the ultimate sacrifice over this holiday weekend,” Mapp said in a news release.
The Bureau of Internal Revenue did something similar just before Christmas last year, paying out income tax refunds totaling $10 million in time for the holidays. At that time it sent out 3,800 checks to taxpayers in the territory, according to a Dec. 20 news release by the BIR and the V.I. Department of Finance.
Tax refunds in the territory, generally, take at least a year longer to process then tax refunds to in the states.
This week’s news release said BIR plans to begin disbursing 2016 tax refunds by mid-summer. While that would be an improvement over the V.I.’s history, stateside residents have already received their tax refunds from 2016. The Internal Revenue commits to refunding overpaid taxes within 21 days of a taxpayer filing his or her tax form.
Mapp said an announcement will be made as the date approaches when more refunds could be paid.
“We thank the community for their patience as we currently must manage our cash flow on a weekly basis,” Mapp said in the recent release. “And, once again, I thank the employees of BIR and the Department of Finance for their efforts in getting these refunds processed.”