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US VIRGIN ISLANDS: Governor Kenneth Mapp’s administration has come up with a plan to rid the Government of the Virgin Islands of its structural deficit (currently $110 million), and if you like to vacation in the islands you’re not going to like it.
His solution to the problem is the passage of a new “sin tax” bill (aka the Virgin Islands Revenue Enhancement and Economic Recovery Act), which will either introduce or raise taxes on rum, beer, tobacco products, sugary drinks, internet purchases and timeshare unit owners.
Directly aimed at the timeshare industry is a bill known as the “Virgin Islands Timeshare Act,” within which is concealed part of the sin tax measure. It was supposedly supported by a cooperative effort between the Government of the Virgin Islands and the timeshare industry, but in fact business leaders are not happy with it at all. They point out that recent data show timeshare units host over 100,000 guests per year in the Virgin Islands and these visitors contribute a significant amount of revenue to the local economy.
The measure originally levied a tax of $30 per day on timeshare unit owners, but senators decreased the amount to $25. Whooptie-do.
So how does a $25 per night tax on your timeshare interval sound to you? For a week’s stay in your timeshare (or as an exchanger or renter), you will be charged an additional $175 — on top of what you’ve already paid in purchase price, maintenance fees, exchange fees, etc. I don’t see how it can be a positive thing for the industry.
Protests have been widespread but even the coordinated pressure from a broad coalition of community groups, including the St. Thomas Chamber of Commerce, Indian Association, bar and restaurant groups, hotel and timeshare associations, liquor wholesalers, and others have not swayed Mr. Mapp’s resolve. In the end, on Wednesday Feb. 15 — in spite of massive protests outside of the legislative hall — the measure passed the Finance Committee, led by a group of Democrats who’ve supported the measure from the beginning. If I understand the process correctly the bill now moves to the Committee on Rules and Judiciary.
Here’s a photo a reader sent in showing part of the protest.
Where has ARDA been in all this? Well, since at least 2011 ARDA-Caribbean says its has been monitoring legislative activity that may be harmful to timeshare. And according to their website:
“The US Virgin Islands Department of Tourism, in conjunction with the Office of the Governor, is developing a 5-Year Tourism Development plan to chart a sustainable future for tourism in the territory. The plan will be developed in several stages and will include research, strategic visioning sessions, and data collection.
ARDA-Caribbean liason Keith Stephenson, has been invited to serve as an expert moderator for the strategic visioning sessions focusing on future lodging development.
“On behalf of ARDA-Caribbean, I am honored to be invited to participate in this important initiative”, said Stephenson. “ARDA-Caribbean is committed to working collaboratively with the government and the private sector for the long-term health and growth of the USVI travel and tourism industry”.
That doesn’t tell us much, but this “sin tax” measure is part of that five-year plan. Other than that, I don’t see anything about it on their website to indicate they’re fighting the tax. Maybe I’m not looking in the right place?
“If you haven’t got anything nice to say about anybody, come sit next to me.” -Alice Roosevelt Longworth
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