Virgin Islands Law Blog

Virgin Islands Law Blog

U.S. Virgin Islands law & politics

Checklist for Covering Your Legal Obligations After the Death of a Family Member

Posted in Tax & Estate Planning

The time immediately following the death of a loved one can be incredibly stressful and hectic. If you have been appointed to the role of estate administrator, you will have a lot of work to do in the near future.

Here is a checklist of some of the most important responsibilities you must take care of when a family member passes away:

Immediate concerns

  • Arrange organ donation: If your loved one was an organ donor, the donations need to be made as soon as possible so that medical professionals can use them to save the lives of other people.
  • Contact immediate family: Inform all immediate family members of the death right away. You can contact close friends and extended family after all immediate family has received notification.
  • Follow your loved one’s body wishes: Whether the person wanted to be buried, cremated or donated to science, it is important to follow the guidelines they outlined in their estate planning documents.
  • Begin funeral preparations: Hopefully, your loved one will have left behind instructions for their funeral. Regardless, you will need to begin preparations for the funeral quickly. This includes choosing a funeral home.
  • Make sure property is secure: Your loved one’s home, possessions and vehicle should all be locked up and secure as soon as possible.
  • Notify the post office: Begin forwarding the deceased’s mail to your address. This will also help you determine which subscriptions and accounts need to be canceled. This can be done online in the Quick Tools section at www.usps.com

Before the funeral

  • Meet with the funeral director: Talk about the format of the funeral, the burial site, any traditions you have in your family and anything else important to you loved one.
  • Spread the word about the funeral: Inform as many people who knew your loved one about the funeral as soon as possible.
  • Write an obituary: Create a public obituary with funeral information. Send it to local newspapers and websites.

After the funeral

  • Obtain death certificate copies: These documents could be important for canceling certain accounts and dealing with creditors.
  • Notify the Social Security Administration office: This is especially important if your loved one had already been receiving benefits. The funeral home may assist with this.
  • Stop coverages: End coverages for health insurance, life insurance and any other policies your loved one had.
  • Notify lenders and banks: Make sure all banks and lenders, along with credit card companies, know of your loved one’s passing.
  • Cancel driver’s license: Inform the Bureau of Motor Vehicles about your loved one’s passing so the agency removes their name from its records.

For further tips on how to proceed after the death of a loved one and what steps you need to take, work with a trusted estate planning attorney.

Steven K. Hardy is an Associate with BoltNagi PC and concentrates his practice in estate planning and probate matters.

BoltNagi is a widely respected and established estate and tax planning law firm that serves clients throughout the U.S. Virgin Islands.

Determining Eligibility for EDC Tax Incentives in the US Virgin Islands

Posted in Government Relations, Tax & Estate Planning

Are you wondering whether you qualify to receive benefits from the Economic Development Commission in the U.S. Virgin Islands? To be considered eligible for benefits, applicants must meet the following requirements:

  • Invest a minimum of $100,000 outside of their inventory in a business or industry that is determined to advance the best interest of the territory.
  • Meet all the requirements of the Internal Revenue Code’s Section 934 (in the case of an individual, partnership or corporation).
  • Provide full-time work for at least ten people, of whom at least 80 percent must be U.S. Virgin Islands residents. These residents must have lived in the territory for at least a year before being hired. Any enterprise that applies for economic development benefits as a Category IV Designated Service Business that provides non-labor intensive financial services is required to employ at least five people.
  • Comply with all local and federal regulations and laws, including environmental legislation.
  • Be an investor in the enterprise for which the economic development benefits are being sought. An applicant cannot be a contractor, subcontractor or any other corporation or person acting as an agent on the behalf of the company that would receive those benefits.
  • Provide an easement for free access to the shoreline if the applicant will be conducting any business on property adjacent to the shoreline.
  • Review the full list of requirements in exchange for benefits.

Categories of eligible activities

There are several categories of activities that could make you eligible to receive benefits from the EDC, although the agency does have the authority to look outside these categories so long as the enterprise advances the economic well-being of the Territory.

Here are those categories:

  • Category I – Legacy Virgin Islands Industries: Examples include businesses that produce rum, milk or dairy—or any companies that manufacture watches or jewelry.
  • Category II – Product Assembly, Manufacturing, Repair and Maintenance and/or Export Operations: Examples include agriculture or mariculture and food processing, machine and heavy equipment, bottling and packing and the marine and aircraft industry.
  • Category III – Facilities, Tourism and Communications: Examples include guesthouses, hotels, healthcare, transportation, recreation, retirement facilities, telecommunication and utilities.
  • Category IV – Designated Services Businesses (defined in section 703(g)): Examples include commercial distribution and trading services, international banking, insurance agencies, public relations firms, call centers, investment managers, print and film industry companies, investment banking, venture capital management, medical laboratories, computer and technology businesses and engineering companies.
  • Category V – International Financial Service Entity: Companies that would fit within this category are defined by Act 7968, § 7, Jan. 20, 2017, V.I. Sess. Laws (2017).

 

If you are looking to apply for EDC benefits and would like assistance in the process, reach out to a dedicated U.S. Virgin Islands corporate planning attorney.

 

Tom Bolt is Managing Attorney and Chair of the Government Relations Practice Group at BoltNagi, a well-respected and established business and government relations law firm, serving individuals, businesses and organizations throughout the U.S. Virgin Islands.

Checklist for Buying a Business in the U.S. Virgin Islands

Posted in Real Estate

Many entrepreneurs get their start in the world of business by buying an existing company rather than starting their own. Many people see this as a less-risky endeavor, although it still comes with plenty of challenges.

There are numerous steps you will need to take to ensure you are making the right move and covering all your legal obligations as you move ahead with the purchase of a business. Our experienced attorneys have compiled a simple checklist below:

Getting started

When you first begin the process of looking for a business to buy, you should be clear to do the following:

  • Determine your interests: To start, any business you wish to invest in should be in an industry that’s of some interest to you.
  • Know your talents and skills: Certain unrealistic business ventures can be eliminated if you are honest with yourself about your experience and talent.
  • Quantify the investment: It’s not always easy to find profitable businesses for sale at reasonable purchase points. You should understand why the business is being sold at the price it is, and then determine how much you are willing to invest.

Conducting due diligence

Next, you will need to address certain issues before you enter a business transaction. These include the following:

  • Obtain all licenses and permits: Most businesses require certain licenses and permits to operate. You should have as many of those as is available prior to assuming ownership of a company.
  • Check zoning requirements: These requirements could affect the type of business you wish to operate in a certain area.
  • Address environmental concerns: If you are also acquiring real estate with the business, you should make sure you have a cohesive understanding of the state of title with the property and any relevant environmental regulations.
  • Determine the business’s value: There are many ways you can determine the value of a business, including capitalized earning approaches, excess earning methods, cash flow methods, values of tangible assets and values of specific intangible assets.
  • Craft a letter of intent: This letter should include your offer figure, the terms of the purchase and conditions for the sale.
  • Create a confidentiality agreement: This agreement should indicate that you will not use any information about the seller’s business for any reasons outside of the purchase.
  • Review financial statements: You should look at financial statements from the last several years to ensure the business is in good financial standing. This includes tax returns, audit information and anything else that provides an accurate financial profile.
  • Check other important documents: These documents could include property documents, sales records, customer lists, advertising materials, contracts, leases and employee and management information.
  • Prepare for closing: At closing, you will need to address items such as the adjusted purchase price, promissory notes, security agreements, leases, franchising issues, non-compete clauses, employment agreements and tax information.

For more detailed information and guidance when purchasing a business in the U.S. Virgin Islands, consult a skilled business transaction lawyer.

Tom Bolt is Managing Attorney of BoltNagi, a widely respected and established business and corporate law firm serving clients throughout the U.S. Virgin Islands.

USVI Paternity and Child Support Division Receives High Marks from Federal Regulators

Posted in Family Law & Children's Issues

The U.S. Virgin Islands Department of Justice, Paternity and Child Support Division (PCSD) received high praise from a federal agency for its “Operation Support Our Children” initiative.

The recognition came after a federal audit conducted for the 2015 fiscal year by the U.S. Department of Health and Human Services, Administration of Children and Family, Office of Child Support Enforcement (OCSE). Auditors discovered that for the first time in years, PCSD had reliable child support data, which meant the territory was eligible to receive federal incentive rewards it had been denied in previous years.

OCSE performed the audit to determine how reliable the data and performance of PCSD had been after the agency had repeatedly failed to meet federal standards. In fact, the U.S. Virgin Islands was the first-ever American jurisdiction to be denied federal incentive payments because of how poorly it performed on these audits. The problem had been mostly attributed to PCSD staff members’ inability to provide accurate data to auditors.

Positive outcome the result of hard work by the division

According to Virgin Islands Attorney General Claude Walker, there had been a lot of positivity within the division regarding its chances of passing the audit. There had been considerable improvements made in 2015 to its data system, collections and child support distribution, thanks to the Operation Support Our Children initiative. As Walker says: “Failure was no longer an option.”

The division ended up outperforming itself in every area of the audit after four straight years of failures. The U.S. Virgin Islands received marks between 92 percent and 100 percent in every area covered under the annual audit, which means it passed with flying colors and can now receive incentive funds that regularly get distributed to other states.

There were eight total performance measures, and PCSD scored 100 percent on one of them. It also had scores of 99 percent, 98 percent and 96 percent on several others. These measures include number of cases open at the end of the fiscal year, the total amount of support collected and distributed and total amount of current support due.

To be sure, these positive marks are excellent news for the U.S. Virgin Islands and the children and families who rely on PCSD. If you have questions about a family law issue, such as child support, child custody or the modification of existing court orders, meet with an experienced attorney.

 

BoltNagi is a trusted and respected law firm serving clients throughout the U.S. Virgin Islands.

US Virgin Islands Offers Tax Incentives for Relocating Companies

Posted in Government Relations

The U.S. Virgin Islands receives a great deal of publicity for the vitality of its tourism industry, and rightfully so—there are so many beautiful beaches, plenty of sunshine and some fascinating historical sites to check out. However, the Territory also offers some attractive incentives for businesses that relocate here.

The Economic Development Authority and the Economic Development Commission (EDC) Program provide these incentives. Tax credits are available for companies in the manufacturing, service or technology industries, as well as for businesses that do outsourced work (such as call centers). The agencies’ goal is to bring a wider range of businesses to the U.S. Virgin Islands to continue expanding and improving the territory’s economy.

The official mandate for the EDC tax incentives is as follows:

  • To promote more growth, development and diversity of the territory’s economy
  • To benefit citizens of the U.S. Virgin Islands by developing such resources to the fullest possible extent
  • To establish and preserve capital and job opportunities for the residents of the Territory
  • To promote capital formation for economic development in the territory

 

Which specific benefits are available to relocating businesses?

The various benefits and advantages available for businesses that take part in the EDC program may include the following:

  • A 90% reduction in corporate income tax;
  • A 90% reduction in personal income tax;
  • A 100 % exemption on gross receipt tax;
  • A 100% business real property tax;
  • A 100% excise tax payments;
  • A reduction in the customers’ duty, from the normal 6% to just 1%; and
  • Rental space made available at rates below the market average in the St. Thomas and St. Croix Economic Development Parks

There are also various other fringe benefits associated with investing in the U.S. Virgin Islands business community. These include an overall very business-friendly environment, a well-educated labor force, world-class telecommunication capabilities, plenty of prime real estate available and easy access to the most important business locations in the world. There are also shipping advantages and the ability to use legitimate “Made in the USA” labeling.

Finally, it is important to note that the U.S. Virgin Islands is exempt from the Jones Act, which requires all freight traveling between American ports to be carried on vessels bearing the U.S. flag. This creates more shipping opportunities, as freight carried between the U.S. Virgin Islands and American ports may be carried on foreign flag vessels.

Now is a great time for business owners and investors to consider making their investment in the U.S. Virgin Islands. If you would like to learn more, speak with a U.S. investment and relocation attorney.

 

Tom Bolt is Managing Attorney of BoltNagi PC, a respected and well-established business and corporate law firm that serves clients throughout the U.S. Virgin Islands.

IRS Makes Changes, Clarifications to Estate Tax Lien Discharge Process

Posted in Tax & Estate Planning

Over the past several months, the U.S. Internal Revenue Service has made some changes to the releasing of liens related to the estates of deceased individuals.

This started last summer, when the agency began funneling the processing of Form 4422 to its Estate Tax Lein Group. Form 4422 becomes necessary when an estate needs to transfer assets before filing Form 706, assuming those assets are subject to an estate tax lien.

As you might imagine, this can get quite complicated for those dealing with the estate of a deceased person. The bottom line is that when someone passes away, there’s an estate tax lien that gets attached to all assets and property contained within that individual’s gross estate.

Anyone who inherits property from the deceased will likely want to get that lien released as soon as possible. Before 2016, the IRS would typically release the lien within several days. But now, all applications for releasing liens must go through the agency’s Specialty Collection, Offers, Liens and Advisory department. The IRS requires that the net proceeds from any sale of property from an estate be deposited into an escrow account or an IRS estate tax account, and the agency may also make the final decision regarding the taxes owed before releasing the proceeds in escrow.

 

Mass confusion leads to memo

These changes have caused a great deal of confusion for accountants and attorneys—not to mention the individuals and families dealing with the death of their loved ones. In early April, the IRS issued a memo with guidance on how its agents should process requests for discharging estate tax liens, providing some level of clarification. The memo also directs agents to review whether there are adequate assets to cover any estate tax liabilities.

If the estate does not owe any taxes, the IRS will not require the extra step of placing assets in escrow—as it had been requiring for the past several months. To that end, the memo at least provided some greater flexibility in how the lien discharge process moves forward in most scenarios.

The tax issues associated with high-value estates can be incredibly complicated and unwelcome, especially when you are already dealing with the passing away of someone close to you. For further guidance on this and related legal issues, meet with a skilled U.S. Virgin Islands trust and estate planning attorney.

 

Steven K. Hardy is Chair of Corporate, Tax and Estate Planning Practice Group at BoltNagi, an established and well-respected estate planning law firm serving individuals and families throughout the U.S. Virgin Islands.

Will Trump’s Executive Order Impact the Hiring of International Workers?

Posted in International, Labor & Employment

An executive order signed by President Donald Trump in April will make it more difficult for companies to recruit low-wage international workers that the President says unfairly harm U.S. citizens looking for work.

The order, which Trump announced during a visit to Wisconsin, also directs federal agencies to carefully analyze existing rules and trade agreements to determine their effectiveness related to their requirements for purchasing American products and services.

 

Changes to H-1B implemented

Notably, the executive order does not end the H-1B visa program, which Trump regularly criticized while on the campaign trail. That program allows technology companies to bring in skilled workers to fill key positions. In 2016, the federal government allowed 85,000 people to enter the country to work through H-1B visas.

President Trump has argued that the H1-B program enables companies to replace American workers with foreign employees they can pay less. Officials within the Trump Administration did say that the executive order would make considerable changes to the program. Among them is a new requirement for applicants and their prospective employers to prove that visas will go only to the most highly skilled workers available. To that end, President Trump aims to eliminate what he claims is a widespread practice: tech firms using H-1B visas as a cheaper alternative to hiring American workers.

Tech executives have been vocal in their opposition to the order, arguing that the H-1B visa program is critical to their ability to find and hire skilled people.

Earlier in April, U.S. Citizenship and Immigration Services issued a memo announcing that the agency will focus more of its attention on companies that have 15 percent or more of its workforce on H-1B visas. Until now, firms did not have to prove they could not find a U.S. worker to fill a position if it paid $60,000 or more per year—a number that has not been adjusted since the 1990s.

Critics say that threshold should be increased by as much as 100 percent, as many American workers would require salaries of $120,000 or more for those jobs today.

 

Knowing your options

The H-1B visa program is a valuable resource for businesses that need to find highly skilled talent, but are unable to fill key positions through American workers alone. This new executive order could put them in a difficult position, potentially preventing them from making the hires that will allow them to grow.

If you have questions about how adjustments to the H-1B visa program and other immigration policies could impact your company, consult a knowledgeable immigration law attorney in the U.S. Virgin Islands. It will be important to remain up to date as changes continue to occur.

 

BoltNagi is a highly respected and established business law firm serving individuals, businesses and organizations throughout the U.S. Virgin Islands.

Checklist for Selling Real Estate in the US Virgin Islands

Posted in Real Estate

If you’re preparing to sell property in the U.S. Virgin Islands, it’s important to know all the steps you’ll need to take and items to check off your list. This is true whether you’re a first-time seller or an experienced real estate investor.

Below are a number things you will need to consider when selling real estate, along with some individual steps to take within each of those categories.

Determine the extent of your need to sell

  • Determine your personal financial and real estate goals for the next 10 years
  • Determine the pros and cons of selling your property
  • Determine if you can afford to purchase a new property
  • Calculate the equity you have in your property
  • Consider if it is worthwhile to you financially or otherwise to rent the property

Figure out how much it will cost you to sell

  • List all the repairs and projects you will need to conduct to get the property in selling condition
  • Consider remodeling projects and green upgrades that will increase the value of your property
  • Factor in costs such as capital gains taxes, property inspections, penalties for mortgage payoffs, moving costs, marketing and staging costs and expenses associated with getting a new property loan

Develop a strategy for selling your property

  • Figure out how fast you need to sell your property
  • Research multiple brokers and/or attorneys before deciding which you will consult
  • Determine the unique selling characteristics of your property
  • Determine your property’s fair market value and then set a price

Market the property

  • Use MLS listings
  • Put up “for sale” signs
  • List your property on real estate publications, Craigslist, newspapers and other websites
  • Send out email notices or flyers about your property to potential interested parties
  • Take as many high-quality photos of different views of the property as possible
  • Consider hiring a professional stager for your photos
  • Arrange showings and open houses as people make their interest known

Take offers and negotiate

  • Review the prices, preapproval letters, contingencies, earnest money and closing dates for each offer
  • Have a process in place to help you quickly review offers if you expect to receive multiple offers
  • Take the opportunity to negotiate offers you like
  • Have a pre-set window in which you will compromise

For more information and tips on the legal aspects of selling real estate in the U.S. Virgin Islands, work with a skilled attorney.

 

Steven K. Hardy is Chair of the Real Estate and Financial Services Practice Group at BoltNagi, a widely respected and established real estate law firm serving individuals, businesses and organizations throughout the U.S. Virgin Islands.

Governor Signs Sin Tax Measure, Additional Bills into Law

Posted in Government Relations

U.S. Virgin Islands Governor Kenneth Mapp recently signed five new bills into law, one of which is the revised Revenue Enhancement and Recovery Act. It’s popularly known as the “sin tax bill.”

The bill increases the taxes levied on alcoholic beverages, cigarettes, timeshares and sugary carbonated beverages throughout the territory. While the total amount of the increase was slightly lower than previously thought, they will still be an important step to help bring some new and much-needed revenue into the territory.

The measure has been long expected and is now finally official. It has been the subject of some debate among lawmakers and residents of the U.S. Virgin Islands, who have generally been on the side of avoiding more taxation. However, the governor commended lawmakers for recognizing the need for additional revenue in passing the bill.

Also approved was Bill No. 32-0007, which establishes a baseline property tax of $360 after applying certain credits and exemptions. The bill also officially defines “commercial real property” for assessment purposes.

On the other hand, Mapp vetoed a section of the legislation that would have denied certain economic benefits or tax breaks to developers of timeshares that had previously been used as hotels or other similar facilities. He reasoned that he believed this measure would pose a significant barrier to the development of new timeshares in the territory. He also vetoed a portion of the bill that would have implemented certain austerity measures on the executive branch of government.

Additional proposed bill vetoed

One other bill did not get Mapp’s approval. Bill No. 32-0018 would have created tax amnesties that waived penalties and interest on delinquent gross excise, property and receipt taxes before 2015. The measure would have lasted for six months.

Additionally, the bill would have required the Economic Development Authority to submit a proposal for expedited application processes to the legislature within 30 days. It also would have taken the governor out of the process of approving new Economic Development Commission applicants, while also putting the Department of Licensing and Consumer Affairs in charge of approving these licenses within the first 30 days for all first-time applicants.

Mapp’s reasoning for vetoing the bill was that it would put unnecessary burdens on the Department of Licensing and Consumer Affairs and the Department of Planning and Natural Resources. The former agency, he said, should not be under any legal requirement to act on some applications within an allotted timeframe.

As far as removing the governor from the EDC application process, Mapp said doing so would potentially send a message to people who would benefit that they would not need to fully comply with their contracts, as current law requires the governor to fully explain any benefits of which he does not approve.

There has been discussion both in the media and in private that the 32nd Legislature’s Majority Caucus that a motion will be made at the next Legislative Session to override the Governor’s veto of Bill No. 32-0018.

For more information on how these bills and other action within the territorial government could affect your business, meet with a knowledgeable corporate law attorney in the U.S. Virgin Islands.

 

Tom Bolt is Managing Attorney and Chair of the Government Relations Practice Group at BoltNagi, a respected and well-established business and government relations law firm serving clients throughout the U.S. Virgin Islands.

Tips for Negotiating a Contract that Meets Your Needs

Posted in Tax & Estate Planning

Before you finalize any business contract, you will likely go through a period of negotiations to figure out all the details of the agreement in question. If you are new to the process of contract negotiation, it’s important to understand how you can advocate for your best interest without asking for too much and derailing the process.

The following are some common contract negotiation strategies you and your attorney may be able to employ:

  • Negotiate in parts: Too many contract negotiations fall apart because the parties try to force each other to agree to all their terms without compromise. Instead, break the negotiation down into sections and reach an agreement on each individual portion of the deal. This will help you build momentum by resolving numerous issues consecutively, and will also work to keep the deal making process amicable.
  • Emphasize industry standards: During this type of negotiation, you would emphasize that what you are requesting is in line with the standards in your market. This means you have no obligation to justify your terms and should not have to spend much time advocating for them.
  • Attempt to take control: If you can control the time, location, topics or pace of the negotiation, you may have an advantage. This does not mean you should be overly assertive or aggressive with the interview process. An attorney can help you better understand how to use this strategy effectively.
  • Always look for common ground: Taking a more upbeat approach to the negotiations and finding points of agreement can help you create a more collaborative process. The more positivity in the meeting, the more likely it is that you will end up with a good outcome.
  • Have research to back you up: In general, the negotiating party that comes to the table with more information and research will have more leverage in negotiations. The information you attempt to collect varies depending on the type of contract you are negotiating, but it never hurts to know as much about the other party and information that is pertinent to the contract as possible.
  • Always prioritize: There are some revenues and risks in contract negotiations that may be more important than others. You should always be able to clearly definite your priorities and how they rank to help you stay focused on your goals during the negotiation.
  • Offer concessions: Determine what would be some acceptable concessions for you to make during the negotiation process, and use those as bargaining chips to help the other side feel like they are getting a good deal. You should always leave yourself room to negotiate, so never start off with your bottom line.

For further tips and advice when you’re negotiating an important business contract, meet with a skilled corporate law attorney in the U.S. Virgin Islands.

 

Steven K. Hardy is Chair of the Corporate, Tax and Estate Planning Practice Group at BoltNagi PC, a widely respected and well-established business and corporate law firm serving clients throughout the U.S. Virgin Islands.