# USVI proposing $30/day tax on timeshares



## SandyPGravel

I posted this in the VSE forum for St John, but then realized it will affect all the USVI timeshares.

From the News of St John:

"Another huge item in this Act pertains to timeshares, which we know many of you own here on St. John. The Governor is proposing a $30 per day tax on every timeshare unit for each day of occupancy in the Territory."

Link to the article:

http://newsofstjohn.com/2017/01/27/is-the-future-of-happy-hour-in-jeopardy/


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## Sandy VDH

guess I would NOT be staying on the USVI for an extra $210 a week in Taxes.  That is highway robbery.  The TOT tax in Hawaii in perhaps $30 to 40 for the week, and people gripe about that.  

I guess I start a list of places to avoid with high daily fees.  The Manhattan Club is on my list.  I guess I will have to write off USVI timeshares too if this passes.


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## pedro47

What a way to raise money for a government. Are they going to charge the visiting cruise ship in port that day a  tax?


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## DavidnRobin

Anyone have USVI Governor Mapp's email address?


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## chuck1955

I am not sure how that would even be constitutional - TS owners are in fact property owners and a stay at a timeshare is occupying their unit that they own (regardless of whether it is by the owner, renter, whatever).  It is not a hotel unit.  It should be considered the same as anyone's home or 2nd home, and if they only tax TS owners, then that would be an unfair application of the tax.  Back around 2005 USVI got into trouble because they had a higher property tax for TS owners that was declared unconstitutional, and it took them several years in court to get it revised and a new rate accepted (during which they had no revenue from TS property taxes).  USVI is bordering on running out of money soon, just like Puerto Rico, primarily due to total mismanagement by elected officials who appear to only want to take care of themselves.  I understand Gov. Mapp's Governor's Residence is a suite at the Ritz-Carlton - guess how much that costs the government.  The VI Legislature has been sitting on this proposal for a while without making a decision.  If they pass it as is I would expect a flurry of lawsuits.


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## Sandy VDH

You are a property owner, but as with other states, you are basically in the situation of Taxation with representation.  Property owner does NOT equal voter.  

Hawaii passed the TOT (Transient Occupancy Tax) tax which is in addition to the property tax.  I own property in Hawaii, but didn't get to vote. NO timeshare owners, only residents get that privilege.  So a group of people who are NOT impacted by the vote, get to vote on it.  I am sure there are a few Hawaii Owners that might own a Hawaii timeshare, but that would be a small small minority.


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## mjm1

Thanks for sharing this information. We don't own at WSJ, but we would definitely like to visit there again. However, we will absolutely have to reconsider our plans if that high of a tax is instituted. We thought the TOT in Hawaii was bad, but this takes it to another level. We can happily spend our money somewhere else if we have too. 

I look forward to future updates with hopes that the governor reconsiders. Thanks again.

Best regards.

Mike


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## OKPACIFIC

I am not in favor at all with the fee. In fact it may contribute to a death spiral. I am just posting this article to give everyone a sense of the mess the USVI is in.

*Welcome to the Virgin Islands, One of the Most Indebted Places in the U.S.*
A U.S. territory famed for its white-sand beaches and azure waters is in a precarious financial position. This time, it isn't just Puerto Rico.

The U.S. Virgin Islands shares many of the same fiscal problems as its Caribbean neighbor 80 miles to the west: high levels of debt, mounting pension obligations and a declining population.

Local legislators on Tuesday are expected to consider a new round of taxes as a way to shore up the Virgin Islands' $110 million budget deficit. That follows an unsuccessful attempt earlier this month to sell about $220 million in bonds, the second time in two months the territory has called off a planned bond sale.

Virgin Islands Governor Kenneth Mapp said the territory, with a population of some 105,000 people, has "no problems" making payments on its $2.2 billion in debt obligations. But he predicted widespread service cuts and layoffs if new bonds can't be sold. Moody's Investors Service on Tuesday downgraded certain Virgin Islands bonds by three notches and cited "an increased possibility that the government may be forced to restructure its debt to address its financial problems."

"I think this is a critical juncture," said Nikolao Pula, director of the Office of Insular Affairs, which coordinates federal policy for several U.S. territories as part of the Department of the Interior. "We just hope whatever decision they make will be good moving forward."

Any failure by the Virgin Islands to pay back money owed to investors could intensify tough competition for limited government dollars inside the territory.

Virgin Islands bonds have traditionally appealed to mainland bondholders and U.S. mutual funds because they are exempt from state taxes. U.S. mutual funds currently hold nearly $1 billion in Virgin Islands bonds, according to Morningstar.

The mutual fund with the highest percentage of its portfolio invested in Virgin Islands debt is made up largely of Wisconsin investors. Wells Fargo Asset Management, which oversees the Wells Fargo Wisconsin Tax Free C fund, said it is protecting itself from the Virgin Islands' financial situation by holding debt that is either insured or coming due within the next 18 months. More than 8% of its holdings are debt issued by the U.S. territory.

At Western Asset Management, based in Pasadena, Calif., which also holds Virgin Islands bonds, senior analyst Fred Poon said he expects the Virgin Islands legislature will eventually enact a "sin tax" on cigarettes, alcohol and other revenue-raising measures.

"Who wants to argue against taxes on sin?" Mr. Poon said.

Comprising the main islands of St. Thomas, St. John and St. Croix, the Virgin Islands territory has long struggled with budget deficits, but its problems accelerated after the 2008 economic downturn.

First the local economy, long dependent on tourism, took a hit. Annual expenditures by visitors fell by 18.5% in the period from 2007 to 2013, a drop of $280 million. The territory's population shrank by almost 9% over that same period.

Another blow came in 2012 when one of the territory's biggest employers shut down. The Hovensa oil refinery on the island of St Croix employed 1,200 workers and 960 contractors, according to a report by Fitch Ratings at the time. The closing was expected to deprive the government of an estimated $100 million in annual revenue, according to a 2012 report from the then-governor.

With less revenue, the territory has relied increasingly on bond proceeds to pay operating costs while contributing less to local pensions. That borrowing has increased its debt to a level similar to that of Puerto Rico, on a per capita basis.

The lower pension contributions widened the funding gap for a retirement system that covers 9,303 current workers and 8,465 retirees and past workers, according to the fund's 2015 financial reports.

That pension plan now has only 27% of what it needs to pay future benefits, according to 2015 financial statements; a 2015 analysis by Segal Consulting predicted the fund would run out of money by 2024.

The governor said he plans to unveil proposed pension fixes this year and hold hearings on the topic. "We need to come up with a strategy," Mr. Mapp said.

Another strain is that U.S. territories, including the Virgin Islands, typically receive less federal money than U.S. states, according to Rep. Stacey Plaskett, the nonvoting U.S. congresswoman representing the Virgin Islands. For example, the federal government caps the amount of Medicaid payments the territories receive. "Our disparity of treatment is I believe what has caused these financial issues to occur," Rep. Plaskett said.

Some analysts expect the territory to eventually turn to Washington, D.C., for help, as Puerto Rico did in 2016. Congress last year passed legislation that provides Puerto Rico with a stay against creditor litigation in exchange for oversight from a seven-member board that controls the territory's finances and approves any court-supervised debt restructuring.

A similar solution for the Virgin Islands "is totally possible within the next five years," said Matt Fabian, a partner with Municipal Market Analytics.

But a cash crunch could come much sooner. Ken Kurtz of Moody's predicts the territory will need to sell bonds within "the next few months" to keep from running out of operating cash.

Interest in Virgin Islands bonds has been scarce ever since Congress authorized debt-relief legislation for Puerto Rico in June. Bondholders showed lukewarm interest in a Jan. 11 offering.

The Virgin Islands Public Finance Authority received orders for slightly more than 60% of the bonds after offering an interest rate "in the 6% range," according to Mr. Mapp. The authority opted to cancel the deal rather than reduce its size, he said.

About $55 million of the $219 million offering would have been used to close a gap in this year's $1.35 billion budget, the governor added. If the Virgin Islands can't close that gap, "this is not sustainable," Mr. Mapp said. "We can't continue doing this."


(END) Dow Jones Newswires


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## DavidnRobin

I have been following the debt issues with the USVI and Puerto Rico for some time now - certainly this is why they are looking for sources of revenue.  Certainly these issues are not in the main stream media - especially how the debt was generated by the bonds in the 1st place.

As sometimes humor/sarcasm is a good way to understand these types of issues (debt crisis in PR) - watch the John Oliver's segment on this topic - very enlightening (and tongue-cheek). If one does not appreciate John Oliver's approach or humor - don't watch... this covers many aspects of the PR debt crisis that for normal people (like me) would be otherwise hard to follow. {~21 minutes - this is not a sound bite}






Not added in Mapp's discussion is just how wasteful their (Gov't) spending over years and years - plus poor decision making and corruption internally - has gotten them to this point.  Like Maui - TS Owners are easy targets. Luckily I am in a place where I can walk away if need be, although (as obvious) I love Love City and that would be a shame.

I hope Vistana-WSJ gets involved...


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## mjm1

OKPACIFIC said:


> I am not in favor at all with the fee. In fact it may contribute to a death spiral. I am just posting this article to give everyone a sense of the mess the USVI is in.
> 
> *Welcome to the Virgin Islands, One of the Most Indebted Places in the U.S.*
> A U.S. territory famed for its white-sand beaches and azure waters is in a precarious financial position. This time, it isn't just Puerto Rico.
> 
> The U.S. Virgin Islands shares many of the same fiscal problems as its Caribbean neighbor 80 miles to the west: high levels of debt, mounting pension obligations and a declining population.
> 
> Local legislators on Tuesday are expected to consider a new round of taxes as a way to shore up the Virgin Islands' $110 million budget deficit. That follows an unsuccessful attempt earlier this month to sell about $220 million in bonds, the second time in two months the territory has called off a planned bond sale.
> 
> Virgin Islands Governor Kenneth Mapp said the territory, with a population of some 105,000 people, has "no problems" making payments on its $2.2 billion in debt obligations. But he predicted widespread service cuts and layoffs if new bonds can't be sold. Moody's Investors Service on Tuesday downgraded certain Virgin Islands bonds by three notches and cited "an increased possibility that the government may be forced to restructure its debt to address its financial problems."
> 
> "I think this is a critical juncture," said Nikolao Pula, director of the Office of Insular Affairs, which coordinates federal policy for several U.S. territories as part of the Department of the Interior. "We just hope whatever decision they make will be good moving forward."
> 
> Any failure by the Virgin Islands to pay back money owed to investors could intensify tough competition for limited government dollars inside the territory.
> 
> Virgin Islands bonds have traditionally appealed to mainland bondholders and U.S. mutual funds because they are exempt from state taxes. U.S. mutual funds currently hold nearly $1 billion in Virgin Islands bonds, according to Morningstar.
> 
> The mutual fund with the highest percentage of its portfolio invested in Virgin Islands debt is made up largely of Wisconsin investors. Wells Fargo Asset Management, which oversees the Wells Fargo Wisconsin Tax Free C fund, said it is protecting itself from the Virgin Islands' financial situation by holding debt that is either insured or coming due within the next 18 months. More than 8% of its holdings are debt issued by the U.S. territory.
> 
> At Western Asset Management, based in Pasadena, Calif., which also holds Virgin Islands bonds, senior analyst Fred Poon said he expects the Virgin Islands legislature will eventually enact a "sin tax" on cigarettes, alcohol and other revenue-raising measures.
> 
> "Who wants to argue against taxes on sin?" Mr. Poon said.
> 
> Comprising the main islands of St. Thomas, St. John and St. Croix, the Virgin Islands territory has long struggled with budget deficits, but its problems accelerated after the 2008 economic downturn.
> 
> First the local economy, long dependent on tourism, took a hit. Annual expenditures by visitors fell by 18.5% in the period from 2007 to 2013, a drop of $280 million. The territory's population shrank by almost 9% over that same period.
> 
> Another blow came in 2012 when one of the territory's biggest employers shut down. The Hovensa oil refinery on the island of St Croix employed 1,200 workers and 960 contractors, according to a report by Fitch Ratings at the time. The closing was expected to deprive the government of an estimated $100 million in annual revenue, according to a 2012 report from the then-governor.
> 
> With less revenue, the territory has relied increasingly on bond proceeds to pay operating costs while contributing less to local pensions. That borrowing has increased its debt to a level similar to that of Puerto Rico, on a per capita basis.
> 
> The lower pension contributions widened the funding gap for a retirement system that covers 9,303 current workers and 8,465 retirees and past workers, according to the fund's 2015 financial reports.
> 
> That pension plan now has only 27% of what it needs to pay future benefits, according to 2015 financial statements; a 2015 analysis by Segal Consulting predicted the fund would run out of money by 2024.
> 
> The governor said he plans to unveil proposed pension fixes this year and hold hearings on the topic. "We need to come up with a strategy," Mr. Mapp said.
> 
> Another strain is that U.S. territories, including the Virgin Islands, typically receive less federal money than U.S. states, according to Rep. Stacey Plaskett, the nonvoting U.S. congresswoman representing the Virgin Islands. For example, the federal government caps the amount of Medicaid payments the territories receive. "Our disparity of treatment is I believe what has caused these financial issues to occur," Rep. Plaskett said.
> 
> Some analysts expect the territory to eventually turn to Washington, D.C., for help, as Puerto Rico did in 2016. Congress last year passed legislation that provides Puerto Rico with a stay against creditor litigation in exchange for oversight from a seven-member board that controls the territory's finances and approves any court-supervised debt restructuring.
> 
> A similar solution for the Virgin Islands "is totally possible within the next five years," said Matt Fabian, a partner with Municipal Market Analytics.
> 
> But a cash crunch could come much sooner. Ken Kurtz of Moody's predicts the territory will need to sell bonds within "the next few months" to keep from running out of operating cash.
> 
> Interest in Virgin Islands bonds has been scarce ever since Congress authorized debt-relief legislation for Puerto Rico in June. Bondholders showed lukewarm interest in a Jan. 11 offering.
> 
> The Virgin Islands Public Finance Authority received orders for slightly more than 60% of the bonds after offering an interest rate "in the 6% range," according to Mr. Mapp. The authority opted to cancel the deal rather than reduce its size, he said.
> 
> About $55 million of the $219 million offering would have been used to close a gap in this year's $1.35 billion budget, the governor added. If the Virgin Islands can't close that gap, "this is not sustainable," Mr. Mapp said. "We can't continue doing this."
> 
> 
> (END) Dow Jones Newswires



John, thanks for sharing this article. Nice to have some perspective on the situation. All our best to you and Nancy.

Mike


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## mjm1

DavidnRobin said:


> I have been following the debt issues with the USVI and Puerto Rico for some time now - certainly this is why they are looking for sources of revenue.  Certainly these issues are not in the main stream media - especially how the debt was generated by the bonds in the 1st place.
> 
> As sometimes humor/sarcasm is a good way to understand these types of issues (debt crisis in PR) - watch the John Oliver's segment on this topic - very enlightening (and tongue-cheek). If one does not appreciate John Oliver's approach or humor - don't watch... this covers many aspects of the PR debt crisis that for normal people (like me) would be otherwise hard to follow. {~21 minutes - this is not a sound bite}
> 
> 
> 
> 
> 
> 
> Not added in Mapp's discussion is just how wasteful their (Gov't) spending over years and years - plus poor decision making and corruption internally - has gotten them to this point.  Like Maui - TS Owners are easy targets. Luckily I am in a place where I can walk away if need be, although (as obvious) I love Love City and that would be a shame.
> 
> I hope Vistana-WSJ gets involved...



David, thanks for sharing this. Our first exposure to John Oliver was during our trip to Spain last November. We didn't catch his name, but were very entertained by his humor, not withstanding his some times crude language. Now we know his name.

Mike


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## LannyPC

chuck1955 said:


> I am not sure how that would even be constitutional - TS owners are in fact property owners and a stay at a timeshare is occupying their unit that they own (regardless of whether it is by the owner, renter, whatever).  It is not a hotel unit.  It should be considered the same as anyone's home or 2nd home...



This issue came up in Hawaii sometime ago and people (especially and understandably TS owners) argued that same point.  The counter-argument IIRC, was that a TS is like a hotel because the furniture and cutlery, etc. stay when new owners move in (or something along those lines).

I'm not saying I agree with either side.  I'm just pointing out the other side of the coin.


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## okwiater

Looks like everybody's $5 ARDA contributions finally paid off -- the proposed timeshare tax is down to $25/night and is on its way to the rules committee. 

http://viconsortium.com/business/si...es-first-senate-hurdle-heads-rules-committee/


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## mjm1

okwiater said:


> Looks like everybody's $5 ARDA contributions finally paid off -- the proposed timeshare tax is down to $25/night and is on its way to the rules committee.
> 
> http://viconsortium.com/business/si...es-first-senate-hurdle-heads-rules-committee/



Thanks for sharing this update. Good to see the small reduction, but the tax is still high. 

One thing I hadn't focused on earlier is that St Thomas is also part of the USVI, so this tax impacts the Marriott and other timeshares there as well.

I assume the tax will be paid by whoever occupies the unit like they do in Hawaii. It will be interesting to see if this impacts the flow of people wanting to stay in timeshares on the islands.

I also thought it is interesting that they consider this a "sin tax", which includes a tax on timeshares and internet sales. 

Mike


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## okwiater

mjm1 said:


> Thanks for sharing this update. Good to see the small reduction, but the tax is still high.
> 
> One thing I hadn't focused on earlier is that St Thomas is also part of the USVI, so this tax impacts the Marriott and other timeshares there as well.
> 
> I assume the tax will be paid by whoever occupies the unit like they do in Hawaii. It will be interesting to see if this impacts the flow of people wanting to stay in timeshares on the islands.



Yes, the tax is paid by whoever occupies the unit. Also, it goes into effect on March 1 (if it passes), so if anyone has rented their unit out, they may want to give the renter a heads up.

As an aside, although I am annoyed by and do not support the tax, I am trying to keep it in perspective. There has always been a 12.5% (previously 10.5%) occupancy tax applied to hotels *and timeshares* in the USVI, but because there was no cost to a timeshare stay, it was unclear on what amount the tax should be based. This new law repeals the 12.5% tax on timeshares (which represented zero revenue to the USVI government) and replaces it with this $25/night tax.

To me, the tax is problematic in the same way Hawaii's TAT is problematic. Specifically, timeshares are targeted from two directions: (1) through property taxes, by designating a timeshare class of property with higher rates than any other class, and (2) through occupancy taxes, which treat timeshare owners the same as hotel guests.

Although I sympathize that timeshare usage results in greater wear and tear on infrastructure than a standard owner-occupied residence, I think elected officials should not be able to double-dip in this manner. Either timeshare owners should be assessed as property owners (through a timeshare class of property taxes), or they should be assessed as transient guests (through occupancy taxes) -- but not both.


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## pedro47

How many timeshare are on the islands and what are the occupancy rate?


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## okwiater

pedro47 said:


> How many timeshare are on the islands and what are the occupancy rate?



The proposed bill mentions a 70% reported occupancy rate. There are some inconsistencies in the text, though, because it goes on to assume 300 occupancy days per year (80% occupancy). Something doesn't add up.

The only way I can get to the projected $19 million in revenue is by assuming there are ~3,108 timeshare units, which at 70% occupancy results in the "2176 occupied units" cited in the bill. Multiply by 350 nights and $25/night and you get $19.04 million.

Take a look at pages 6-7 of the bill summary and let me know if you can make any sense of it: http://legvi.org/vilegsearch/ShowPDF.aspx?num=32-0005&type=Bill


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## GrayFal

I am really unhappy with this.  

In Aruba, there is a general tax of $25 per week and $10-15ish per day timeshare tax. 
In the Cayman Islands, there is a $10 per day timeshare and hotel tax. And at Morritts I have weekly energy fee of $80-140 per week based on usage.   At the Reef Resort they charge the $10 per day plus almost $300 per week energy fee. 
When I stay at Bluebeard's Beach Club STT, thru Wyndham points, there is a $22 per day energy fee (does not include Internet) and now $25-30 per day timeshare tax.


It really is discouraging.


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## pedro47

Collecting 19 million is a drop in the bucket toward their deficit in my opinion. The Prime Minister and his cabinets members needs to reduce their yearly expenditures by 10% to achieve a true debt reduction.


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## chuck1955

I think the drop in TS usage due to this will result in a loss of revenue far exceeding the $30/day as there will be fewer people spending money on the island.  Note that the USVI Senate has not taken any action on the proposal yet - it seems like they are lukewarm at best to the entire "sin" tax proposal which includes the TS tax, and not sure how to proceed.  There are a lot of accusations being thrown around (most of them correct) about the Governor's lavish lifestyle that the government pays for, the overpaid senators (they are the highest paid representatives of any US state or territory), and the bloated government payroll (many relatives of pols there).  The USVI government has always had major corruption and graft issues, and an inability to manage their finances.  Sounds like the day of retribution is fast approaching.....


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## LisaRex

Maybe a better start at balancing the budget is to reduce the number of days off their #1 employer (US Park Service) gives their employees.  They are entitled to 21 holidays. By comparison, US federal workers get 10. 

By my calculation, a newly hired USVI park employee will get 21 days of holidays + (possibly) 2 days for Carnival + 13 days of vacation... or 34-36 days off (~7 weeks) per year. An employee with 3+ years of experience is entitled to 2 months off (40-42 days).  And if you reach 15 years of service, you get 2.5 months off per year (49-51 days off). 

Add in a sweet retirement plan, and I can see why they can't balance their budget.

https://en.wikipedia.org/wiki/Public_holidays_in_the_United_States_Virgin_Islands
https://www.opm.gov/policy-data-oversight/pay-leave/leave-administration/fact-sheets/annual-leave/


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## Sandy VDH

An extra $175 in taxes for a week stay is more than I want to pay.  I think I will let my STT Margaritaville ressie go.


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## GrayFal

LisaRex said:


> Maybe a better start at balancing the budget is to reduce the number of days off their #1 employer (US Park Service) gives their employees.  They are entitled to 21 holidays. By comparison, US federal workers get 10.
> 
> By my calculation, a newly hired USVI park employee will get 21 days of holidays + (possibly) 2 days for Carnival + 13 days of vacation... or 34-36 days off (~7 weeks) per year. An employee with 3+ years of experience is entitled to 2 months off (40-42 days).  And if you reach 15 years of service, you get 2.5 months off per year (49-51 days off).
> 
> Add in a sweet retirement plan, and I can see why they can't balance their budget.
> 
> https://en.wikipedia.org/wiki/Public_holidays_in_the_United_States_Virgin_Islands
> https://www.opm.gov/policy-data-oversight/pay-leave/leave-administration/fact-sheets/annual-leave/


Lisa, maybe we should look into this job


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## DavidnRobin

The NPS employee cost is minimal - and not part of USVI budget - but let's not get facts in the way...


Sent from my iPhone using Tapatalk


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## LisaRex

http://www.ncsl.org/Portals/1/Documents/legismgt/2016_Leg_Comp_Session_Per Diem_Mileage.pdf


DavidnRobin said:


> The NPS employee cost is minimal - and not part of USVI budget - but let's not get facts in the way...



First of all, it's not just the NPS workers who are given 21* holidays, but ALL the local, state and federal workers.  However, as the #1 employer, the USVI NP's influence is even greater. Even discounting the enormous cost of paying for these benefits, when the #1 employer shuts down for the day, everyone feels the pinch. It's akin to the impact Seattle feels when Microsoft closes for the day. Local restaurants suffer, taxi drivers suffer, etc., ...and, of course, when they suffer, taxes collected for those services suffer as well. For the governor to mandate 21* public holidays, twice what is normal, for an island that is up to its eyeballs in debt, is fiscally irresponsible. 

Then consider the implications that 2 months+ off per year has on productivity.  How many YEARS did the USVI government take to bill for overdue property taxes?  That's not just lost money they could use to operate the government today, they're also paying needless additional interest on debt...Yet there they sat, not billing for past due property taxes, for years! That's a level of complacency and incompetence that could only exist in a place like USVI.  Can you imagine the uproar if a US state was in debt up to its eyeballs...and then failed to bill for property taxes on time? 

Then we have exorbitant salaries of public officials. The USVI governor makes $150,000 to govern ~106,000 citizens.  By contrast, Ohio's governor makes $148,000 to govern 11,000,000 people.  California's governor gets $174,000 to govern 35,000,000 people.  Their 15 legislators receive $80,000 per year plus travel expenses, the same as New York legislators. (By contrast, Arizona's legislators receive $24,000; Ohio's legislators receive $60,000).  

Looking at the 2016 budget, salaries/wages/payroll taxes cost $335.8MM out of a 708.5MM budget. Add $37.4MM in the "Other" category for contribution to Retirees Health Insurance +2.3MM million for outstanding employer contribution to GERS for Government retirees, and it comes to $375.5MM (or more than $3300 per resident) out of a $708.5MM budget, or 53% of the annual budget. 

So, yes, I think that the USVI should look at tempering its own fiscal irresponsibility, including payroll benefits that are astronomical for the size of its population, before looking at tourist taxes.   

http://www.ncsl.org/Portals/1/Documents/legismgt/2016_Leg_Comp_Session_Per Diem_Mileage.pdf
http://www.usvifinance.info/html/Budget/FY 2016 Executive Budget.pdf
https://ballotpedia.org/Comparison_of_state_legislative_salaries

*I read that the governor did temporarily take away 3 holidays as "austerity measures" in 2016 and 2017.  A step in the right direction!


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## DavidnRobin

I was referring to the fact that the USVI Gov't does not provide the NPS workers with compensation or benefits - as it pertained to the USVI debt.
If you want to tangent this into the USVI Gov't expenditures - you are preaching to the choir.

However, there is plenty of blame to go around for this debt (suggest to watch JO segment around minute 7... and especially at 9:15) more than just USVI mismanagement and corruption - predatory fund managers, lack of regulations or oversight, and Politicians/Politics - for example...


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## jimf41

The tax, if enacted, will not affect deeded owners that pay property tax directly to the USVI. It's aimed at renters and exchangers. I'm unsure how it will affect trust point owners or enrolled owners using DP points. According to the administration at the resort they are not clear how they are supposed to collect it if it is enacted. This is only one tax proposed by the current Governor. He also wants to raise the tax on "sin" items, port fees on cruise ships and possibly a sales tax.

The proposals are very unpopular with the local taxpayers and merchants. A few days ago about local 300 folks staged a protest in downtown CA. Evidently this was an unprecedented event down here. What the legislators don't seem to get is that the Cruise ship operators will just go to a different island if the USVI gets too expensive. If that happens in a significant way the USVI is toast. The entire economy is based on tourism.

A lot of the revenue generated here is from cash purchases. The government has to come up with a way to tap into that as I'm quite sure that every taxi fare does not get reported to the IRS. All federal income tax collected here stays in the USVI. From what I've gathered from the local folks the current Governor and his administration are very unpopular here. I don't expect the tax as it's currently proposed to pass.


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## amanda14

Said it before and will say it again, this site is the best.  That's a pretty steep levy and a number that needs to be factored when looking to vacation in the USVI.


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## DavidnRobin

jimf41 said:


> The tax, if enacted, will not affect deeded owners that pay property tax directly to the USVI.



Where did you read this? From the text that I saw - it was a tax specifically placed on Timeshare users.
As you mentioned - how would they differentiate?


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## Sandy VDH

jimf41 said:


> The tax, if enacted, will not affect deeded owners that pay property tax directly to the USVI. It's aimed at renters and exchangers.



yes, but renters and exchanges can only obtain it by getting it from an owner who has already paid property tax, there in lies the problem.  You have to collect it from everyone or no one.


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## jimf41

I read the law also and I agree with you how it's worded it looks like everybody pays. That is not the opinion of the admin at the resort however.


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## DavidnRobin

jimf41 said:


> I read the law also and I agree with you how it's worded it looks like everybody pays. That is not the opinion of the admin at the resort however.



Whose opinion - which resort? Seems like they may be biased - that is not the interpretation based on what I have seen in writing.  Also, remember - they are/have been attempting to increase property taxes for TS Owners and for StJ Owners - totally separate from this fee.  They even set out Property Tax bills with this new rate back around 2012, but luckily lost in court.  Our Property Tax was proposed to increase from $150/week to somewhere around $400.

I discussed this new fee with BOD at WSJ-VGV (Westin) and he told me that the implications for Owners were currently under discussion within Vistana-WSJ, and with USVI Gov't and TS consortium - nothing about only exchangers or renters. 

We shall see... but as TS owners - we are especially vulnerable - you think USVI Gov't or Locals care if TS owners take on more burden?


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## dioxide45

jimf41 said:


> The tax, if enacted, will not affect deeded owners that pay property tax directly to the USVI. It's aimed at renters and exchangers. I'm unsure how it will affect trust point owners or enrolled owners using DP points.


Do you have additional information that the rest of us don't? I don't see anywhere in any of the articles that it only applies to those paying a cash rate or renting a unit. These same types of taxes in Hawaii, Cancun and Aruba apply to owners staying on their home resort week, why would the tax in the USVI be any different?


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## jimf41

Folks, I was passing along what I'd been told by local merchants, the non-sales folks here at MFC and local government workers. The people who make their living in the USVI on tourism are outraged. They know what these taxes will do to tourism. Let's all calm down and wait and see if it goes through in March. If it does the lawsuits will start. The last time somebody sued the USVI over their handling of property taxes the courts stopped them from collecting them for six years. Nothing happens quickly down here.


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## DavidnRobin

jimf41 said:


> Folks, I was passing along what I'd been told by local merchants, the non-sales folks here at MFC and local government workers. The people who make their living in the USVI on tourism are outraged. They know what these taxes will do to tourism. Let's all calm down and wait and see if it goes through in March. If it does the lawsuits will start. The last time somebody sued the USVI over their handling of property taxes the courts stopped them from collecting them for six years. Nothing happens quickly down here.



I understand what you were relaying what was told to you, and the sentiment of the people (involved in tourism), and crazy workings of the USVI Govt, and how slow things move in the USVI (e.g. Property taxes and lawsuits), but you made a claim that is not supported by the multiple reported and documented proceedings of this issue.
That was the point - I would like if only owners that already paid property taxes (like me at $300 per year) were not getting this fee (tax), but there is no documented evidence of this speculation.
Sorry.


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## jimf41

OK, if I hear anything further while I'm down here I won't pass it along.


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## dioxide45

jimf41 said:


> OK, if I hear anything further while I'm down here I won't pass it along.


Jim, Had you provided more information and your sources in your post #28, no one would have questioned it. However all you said was;


jimf41 said:


> The tax, if enacted, will not affect deeded owners that pay property tax directly to the USVI. It's aimed at renters and exchangers. I'm unsure how it will affect trust point owners or enrolled owners using DP points. According to the administration at the resort they are not clear how they are supposed to collect it if it is enacted. This is only one tax proposed by the current Governor.


It was certainly not unreasonable for someone to question your sources. The part of your post that read Part of your post indicated _"I'm unsure how it will affect trust point owners or enrolled owners using DP points"_ makes is sound like it was personal opinion.


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## Tia

http://viconsortium.com/business/si...-committee-heads-to-full-body-for-final-vote/ 

and 

https://www.facebook.com/SayNoToSin...048825363333/1265546950180187/?type=3&theater


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## SpikeMauler

http://viconsortium.com/business/se...tax-bill-measure-heads-to-mapp-for-signature/

Done deal


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## TUGBrian

well thats a shame


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## happymum

How short-sighted!


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## Sandy VDH

I cancelled my USVI trip as a result.


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## chuck1955

I suspect it will be sometime before they can implement this "tax" which I imagine Gov Mapp will  sign today.  Everything takes a while to implement in the USVI, and for the TS owners expect a lawsuit to materialize quickly and delay any implementation for several years if it even happens.  I know what people were saying about the Hawaii issue that was similar, but I just don't see how you can double tax some property owners both for real estate as well as occupancy while not applying the same tax on all property owners. I can see the tax being legal for non property owners staying at a TS as a hotel or rental tax, but to put an additional tax on someone occupying their TS for their owned week without taxing all owners is unfair.  USVI had different RE tax rates for timeshares back around 2005, and that was taken to court and overturned.  It took USVI 5 years to get RE taxes on TS fixed before they could collect again.  

As far as the impact of the tax on tourism, probably not much after the hoopla goes away - we all got used to paying the exorbitant "resort fees" at these hotels....


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## Tia

From the link posted by SpikeMauler--
''Timeshare unit owners will be charged a tax of $25 per day. The hotel occupancy tax of 12.5 percent will also be assessed on the overall cost of the unit.''

I am not sure but are ts occupants going to have to pay $25/day + 12.5%??????


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## dioxide45

Tia said:


> I am not sure but are ts occupants going to have to pay $25/day + 12.5%??????


Since an owner would not have an overall cost except their MFs, perhaps the 12.5% only applies to those paying cash to stay in a unit. So if you rent directly through the resort, you might pay 12.5% + $25/day? Not sure we know.


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## Tia

Too soon to tell really but one owner who claims to 'know people' in the USVI is saying the USVI government plans to mail the occupant bill to owners of the units not have the resort collect it from whoever is staying. Same person says they will send it out whether or not anyone actually stays in the unit. HMMM?

When anyone hears from their resorts on what is actually going to happen please update here.


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## pedro47

Tia said:


> From the link posted by SpikeMauler--
> ''Timeshare unit owners will be charged a tax of $25 per day. The hotel occupancy tax of 12.5 percent will also be assessed on the overall cost of the unit.''
> 
> I am not sure but are ts occupants going to have to pay $25/day + 12.5%??????



I feel the persons occupying that week of time/space for their vacation should pay the tax of $25 per day. If the owner does not occupied his or her vacation week. Why should they pay the tax.


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## DavidnRobin

I hope they send this as a bill to the owner - I am not going to pay this unfair taxation as I believe it will not hold up when challenged in court.  When I decide to leave my WSJ weeks - I will walk away.
IMO YMMV


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## chuck1955

I think this is a usage tax so it would be applied to whoever is using it, and probably collected by the TS management company at check-in/check-out.  However I don't see where the Governor has signed it even though it passed their Senate a week ago, but then again the Governor's press secretary was suddenly fired this week as well - auspiciously after giving a substantial interview to some publication - so we might not know if/when he signs it LOL.  Apparently there may also not be enough money for payroll next week - the pols are scrambling.  Island people are quite upset.....


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## chuck1955

Tia said:


> From the link posted by SpikeMauler--
> ''Timeshare unit owners will be charged a tax of $25 per day. The hotel occupancy tax of 12.5 percent will also be assessed on the overall cost of the unit.''
> 
> I am not sure but are ts occupants going to have to pay $25/day + 12.5%??????



The way I read it, TS users was $25/day.  I think the 12.5% occupancy tax was on Airbnb and other internet rentals for people renting their condos/houses - supposedly they already reached an agreement with Airbnb to collect the tax which is not considered a new tax but falls under the regular hotel tax already in effect.  Some TS are rented out by the TS manager, maybe those fall under that as well?  Seems like there will be multiple questions as to how all this applied and to what, so expect lawsuits to stop/delay implementation - the government will probably not see any additional revenue from this anytime soon.


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## legalfee

This is from Wyndham:
Also to note, the obligation to collect and remit the fee is on the managing entity (i.e. Association and its management firm), it will not be billed as part of an individual's tax bill, it is assessed based on occupancy not ownership, and there is no deal or exceptions for any timeshare.  
Finally, we're working on an FAQ for the Board to provide them accurate information, but that document has not been completed as of yet because the final entered law has not been published and some of the operational particulars have yet to be identified by the government.

Also FYI five years ago USVI doubled the head tax on cruise ship passengers. Since then cruise ships have declined by 30%.


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## dioxide45

With Marriott's Frenchman's Cove not yet completely built out, I suspect this will probably put the brakes on any future development for even the long term future.


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## chuck1955

"Sin tax" bill now signed into law, but nothing yet about how or when the timeshare tax collection is to be implemented.  Any bets on when the first lawsuit will be filed?

Also read that USVI has over $100M in uncollected property taxes which they plan to start collecting now.  Wonder why they waited so long?


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## DavidnRobin

According to 'News of St John'

http://newsofstjohn.com/2017/03/24/the-sin-tax-the-details-its-not-as-awful-as-first-proposed/

"_And with regarding to the proposed timeshare tax, it is being called an “Environmental/Infrastructure Impact Fee.” That fee will be $25 per day of occupancy. The “timeshare plan manager” or “timeshare association” will be responsible for “collecting the fee” according to the Bill._"

I hope the HOAs get this unfair TS taxation into the courts. $25/day ($175/week) is greater than our Property Tax bill!


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## DavidnRobin

Update from Westin St John - VGV HOA...

*NEW VIRGIN ISLANDS TIMESHARE “ENVIRONMENTAL AND INFRASTRUCTURE IMPACT FEE” (OCCUPANCY FEE)*

One of the most important pieces of news that we have to share with you is that, unfortunately, the legislature of the Virgin Islands has just adopted a new fee of $25 per day on the occupancy of timeshare units, effective on May 1, 2017. The owners association is legally responsible for collecting this new fee. While the details have not been worked out, we expect that this fee will probably be collected when you check out of your unit, rather than being added to your annual maintenance fee. However, it is important to pay the fee, as the Virgin Islands government will have the ability to place a lien on your timeshare unit if the fee is not paid. (Bad as this news is, it could have been worse: the original proposal from the governor’s office was to levy a fee of $35 per day, but advocacy by the trade association of timeshare developers was instrumental in lowering the rate.)


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## SueDonJ

Notice from Marriott re Frenchman's Cove in this thread: New Fee/Tax for MFC Owners/Exchangers


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## Tia

Only makes sense to collect the $25/day on check out rather then adding to a maint. fee bill as there maybe some units that sit empty, so no $25/day fee should be collected. Right?



DavidnRobin said:


> Update from Westin St John - VGV HOA...M
> 
> *NEW VIRGIN ISLANDS TIMESHARE “ENVIRONMENTAL AND INFRASTRUCTURE IMPACT FEE” (OCCUPANCY FEE)*
> 
> One of the most important pieces of news that we have to share with you is that, unfortunately, the legislature of the Virgin Islands has just adopted a new fee of $25 per day on the occupancy of timeshare units, effective on May 1, 2017. The owners association is legally responsible for collecting this new fee. While the details have not been worked out, *we expect that this fee will probably be collected when you check out of your unit, rather than being added to your annual maintenance fee. *However, it is important to pay the fee, as the Virgin Islands government will have the ability to place a lien on your timeshare unit if the fee is not paid. (Bad as this news is, it could have been worse: the original proposal from the governor’s office was to levy a fee of $35 per day, but advocacy by the trade association of timeshare developers was instrumental in lowering the rate.)


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## dioxide45

Tia said:


> Only makes sense to collect the $25/day on check out rather then adding to a maint. fee bill as there maybe some units that sit empty, so no $25/day fee should be collected. Right?


Since it is an occupancy fee, I would agree.


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## Tia

News on this unfair fee, ARDA is suing!!

http://stthomassource.com/content/2017/05/02/timeshare-group-suing-over-timeshare-fee-2/


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## DavidnRobin

Tia said:


> News on this unfair fee, ARDA is suing!!
> 
> http://stthomassource.com/content/2017/05/02/timeshare-group-suing-over-timeshare-fee-2/



As mentioned - it is unfair (and questionably legal) to tax/fee single occupancy at same rate as multi-occupancy and call it an environmental fee as it is unreasonably unbalanced.  And puts low-season small units at risk of default and therefore puts HOAs at risk due to increase of MFS due to theses defaults. Vicious cycle...

I hope this delays this assault on TS owners. They are also discussing (again) to increase property tax for TSs and also STJ owners.


Sent from my iPhone using Tapatalk


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## TUGBrian

good to see arda-roc doing something slightly beneficial with the millions of dollars in owner "donations"!

I wish they would put forth some of that effort into things that impact all owners, like resale/cancellation scams!


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## Tia

http://stcroixsource.com/2017/05/05/second-lawsuit-filed-over-timeshare-fees/


A second lawsuit , bottom of article says no response filed yet from the government on either.


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## DavidnRobin

A key message is being left out of this unfair TS fee - and IMO that greatest argument for the detrimental impact and questions the fairness of this fee...

This TS fee (regardless of arguments on what it is intended for) unfairly impacts studio owners of low season weeks as compared to multi-occupancy high-season weeks.  This $175 is a larger burden on these studio owner - which will cause more defaults - which will raise annual MFs for the HOAs - which will cause more defaults - and so on up the chain.  The studio villa has less environmental impact than a 3-Bd villa - YET they have same fee!?  Hard to believe that is legal... At least Maui charges based on villa size.

Why do these organizations and media sources fail to state the obvious?


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## Tia

Okay was reading around yesterday and saw this article. It says timeshares included, now it's got me wondering if they are going to try and charge both the $25/day + the 12.5%??

https://www.damajority.com/virgin-i...evenue-reminds-taxpayers-hotel-room-tax-12-5/

Anyone that goes let us know?


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## dioxide45

Tia said:


> Okay was reading around yesterday and saw this article. It says timeshares included, now it's got me wondering if they are going to try and charge both the $25/day + the 12.5%??
> 
> https://www.damajority.com/virgin-i...evenue-reminds-taxpayers-hotel-room-tax-12-5/
> 
> Anyone that goes let us know?


I think this is referring to those VRBO and HomeAway type rentals. Many people don't collect or remit the taxes on those. Same problem in many other islands of the Caribbean. They are losing out on a lot of tax revenue because of private rentals.


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## dannybaker

I guess we will find another place to sit on a beach.


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## Jayco29D

An extra $210 a week (or whatever it is) sounds fine. The Virgin Islands needs the tax revenue, especially after the economic destruction to their territory from the hurricane. Tourists should pay to stay and support the locals. If you lived in California and paid our state taxes, you would not be complaining about $210 extra for a week's vacation. If you can afford to vacation in the Virgin Islands, you can afford $210 extra.


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## pedro47

This island was in financial troubles before the hurricane.


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## DavidnRobin

Jayco29D said:


> An extra $210 a week (or whatever it is) sounds fine. The Virgin Islands needs the tax revenue, especially after the economic destruction to their territory from the hurricane. Tourists should pay to stay and support the locals. If you lived in California and paid our state taxes, you would not be complaining about $210 extra for a week's vacation. If you can afford to vacation in the Virgin Islands, you can afford $210 extra.



You are missing some major points - this ‘fee’ is touted as an environmental fee - yet - the same for a studio as a 3Bd,  But, beyond this, Timeshares already pay a hefty Property Tax rate in the USVI already that pales to the property tax in CA (where we also live...).

So - we have the privilege to pay this fee ($175 per week) and PropTax on top - along with other hefty costs - for the privilege to vacation in the USVI (that we already drop ~$5000/week).

This fee - and other costs - will make more low season studio owners to drop out (in the case of WSJ)- thereby causing others remaining in the HOA to pay more - viscous cycle.

This was happening before H.Irma - so I am calling BS on this normalizing of this fee.

Hopefully this unfair fee will be overturned in court.  




Sent from my iPhone using Tapatalk


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## Jayco29D

DavidnRobin said:


> You are missing some major points - this ‘fee’ is touted as an environmental fee - yet - the same for a studio as a 3Bd,  But, beyond this, Timeshares already pay a hefty Property Tax rate in the USVI already that pales to the property tax in CA (where we also live...).
> 
> So - we have the privilege to pay this fee ($175 per week) and PropTax on top - along with other hefty costs - for the privilege to vacation in the USVI (that we already drop ~$5000/week).
> 
> This fee - and other costs - will make more low season studio owners to drop out (in the case of WSJ)- thereby causing others remaining in the HOA to pay more - viscous cycle.
> 
> This was happening before H.Irma - so I am calling BS on this normalizing of this fee.
> 
> Hopefully this unfair fee will be overturned in court.
> 
> Sent from my iPhone using Tapatalk



I think property taxes on timeshares appear to be high as a percentage of the value because MFs are generally $1000-$2500 per week (sometimes less, sometimes more depending on where you own and what size). I think if the taxes are too high, then, yes, people should sell their TSs. If the USVI sees their timeshare industry suffering, then maybe they will get rid of this extra tax.

I find almost all taxes to be unfair because they are unfairly applied in the USA by the various states. Some states pay no state income tax, others like California and New York overpay state income taxes. States like CA send more to the federal government to subsidize other states who pay less than their fair share. Property taxes vary tremendously from state to state. Just an FYI on CA property tax (and you may know this since you are from CA)...as a percentage of the value of property, property tax is low in California. Our problem is the value of property is outrageous. However, for folks who have owned a long time, they are protected by Prop 13 in CA and other states have similar laws. On the other hand, CA state income taxes are crazy and unfair...so don't get me started on this one. Taxes are one of my pet peeves so for me to not be bothered by an extra $210 per week just shows how jaded I am by all the taxes we pay in California.


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