St. Croix, USVI – Senator Samuel Carrión’s transformative bill to aid in the collection of Hotel Occupancy Taxes was approved by the Rules & Judiciary Committee on Thursday.
Bill 34-0070, the Occupancy Tax Efficiency Act, originally required the Bureau of Internal Revenue and the Department of Tourism to enter into agreements with all major accommodation booking platforms to collect the 12.5 percent room tax and remit it directly to the Government.
After hearing concerns from the Bureau of Internal Revenue regarding its inability to require such organizations to enter into agreements for collection of Hotel Room Tax the bill was revised. Amendment 34-397 was created specifically to expand the language in 33 VIC Section 54(a)(2) by re-defining “hotelkeeper or innkeeper” to include booking agencies and deeming the activities of such organizations as doing business in the Virgin Islands. This revision clears the path forward for IRB to make efforts to enter into agreements.
Senator Carrión thanked his colleagues for their support, to include Finance Chairman Kurt Vialet, who introduced the bill on his behalf. Following the hearing, Senator Carrión reiterated that this was not a new tax, but one that has been at times challenging to collect. Hotel Occupancy Taxes are used to support marketing efforts for the Territory, local athletic programs, and other critical initiatives.
Senator Carrión submitted the Occupancy Tax Efficiency Act on assuming office, noting that what could be millions of tax dollars left on the table and the tremendous success of the Virgin Islands Government’s 2017 agreement with Airbnb to promote the Territory and collect Hotel Occupancy Taxes at the time a booking is made online.
Senator Carrión’s bill also creates penalties for non-compliance. The Department of Tourism, the Division of Economic Research, the Bureau of Internal Revenue, the Department of Licensing and Consumer Affairs and the V.I. Hotel & Tourism Association all testified in favor of the measure’s intent, noting the exponential growth of vacation rentals being booked through these websites.
“We worked with these entities and the Office of the Governor to fine tune the bill and I believe everyone is satisfied with what the Rules Committee approved today,” Senator Carrión said. “It is truly a win-win for the territory”. Not only does this bill streamline collections, but it also levels the playing field for all those offering accommodations and ensures that visitors are not misled or surprised with additional costs on arrival.”
It is important that the Virgin Islands keep pace with global economic trends, while ensuring we are collecting the funds necessary to sustain and uplift the tourism industry, Senator Carrion said.
Rules & Judiciary Chairman Milton Potter, Senator-at-Large Steven Payne and Senate Vice President Novelle Francis all voted in favor of the measure, which will be considered by the full body at an upcoming Legislative Session.