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.