New 12.5% Hotel Tax on Existing Reservations

[Travelling Wilbury]

Guessing your agent, I'm assuming that you were originally charged the 10% tax plus a 5% management fee totaling the 15%. If you are now being charged 17% they may have only increased your rate by 2% not the full 2.5%. The management company could have worked with the owner to absorb some of the impact of the increase. In our case we were not charged a management fee on our rental but we were assessed the full 2.5% tax increase.

[Stella7474]

We booked in July direct with an owner to stay in one of their units located in Grande Bay. The final payment is due at the end of this month and we received an email from them stating it will be 81.00 and some change more due to the increase in the VI Tax. Thanks to this forum it was not a surprise. When you break it down it is about 9 dollars a day - not much in the big picture and I hope that it does go towards things that make our visits to St John so enjoyable. Yes - that is 2 cocktails during Happy Hour at Joe's but I think we will live . She also did send us a revised contract showing the revised pricing and the tax at 12.5%. I was not at all offended when told I had to pay - it is not like the owners are putting more money in their pocket - they are just following the new tax law. Looking forward to our vacation - See you on NYE St John! ....and just a Thank You to all who post here - it truly has helped us enjoy our vacations on the island even more!

Stella

[BAILEYBAY]

Just rec'd an email from Andrea Chouiniere owner of Kachi Ra where we will be staying in 174 days. She just wanted to let me know that they would NOT be passing on the tax increase. IMO that is good business and most appreciated. We booked our stay with them over a year ago but they still could have charged us but chose not to. Awesome people....we will not forget the good will they have shown!!

[Tracy in WI]

We own two properties at Grande Bay and have bookings into June of 2016. We heard rumblings about a tax increase for a while but just now through StJohnJulie's post, were we made aware of the date the increase goes into effect. Thanks Julie!

For those with contracts at the 10% rate, we plan to pay the difference ourselves rather than passing it along. We have had nothing but great guests in our suite and consider this a small cost of doing business.

[kirk]

We own two properties at Grande Bay and have bookings into June of 2016. We heard rumblings about a tax increase for a while but just now through StJohnJulie's post, were we made aware of the date the increase goes into effect. Thanks Julie!.

Read this everyday http://m.virginislandsdailynews.com/ we have only been talking about this for 6 month. You own properties here and don't know what is going on here till you read a post on a forum?

[Coconuts]

kirk: At the time of my post last month (http://www.virgin-islands-on-line.com/v ... 76#p298687), multiple bills were still making their way through the legislature, and it wasn't at all obvious if or when they would become law, what the effective date would be, and how existing reservations would be treated. I first learned these details when Julie posted her very helpful response from Ms. Nicholson-Doty, so if Tracy in WI isn't fully up to date, she has company.

All the best,

Kevin

[mbw1024]

I knew this was coming but did not know the date. Knowing now that it is 1/1 I fully expect to pay the increased tax.
Happened with our wedding almost 10 years ago. NJ State tax went from 6% to 7.5%. Talk about a tough pill to swallow on our wedding tab. Yikes!
But 10 years past I just remember it was a great day ... and I am looking forward to a great vacation at 10 or 12.5% tax rate!

Is it great to have to pay more? Of course not. But it is not going to cause anyone with a planned trip to think twice about it. That horse has already left the barn!

[jimg20]

Read this everyday http://m.virginislandsdailynews.com/ we have only been talking about this for 6 month. You own properties here and don't know what is going on here till you read a post on a forum?

Coconuts explained why none of us knew the date the new tax would would take affect and how it would change things for landlords and tenants.

What Coconuts was too diplomatic to say (but I am not) is, that's a cheep shot Kirk. If you knew Tracy or most of us in this Forum, you would have never considered writing that.

JIM

[Teresa_Rae]

I received notice from our rental agent of this increase yesterday for our January stay. The agency that we book through is charging us 17% (up from 15%). Now I am really confused. It appears that I am paying an extra 4.5%. Suggestions!?!

Is it Caribbean Villas? They (and one or two other rental companies) charge a 5% service charge for villa rentals. So previously it was 10% tax and a 5% service charge for a total of 15%. Are you being charged 17.5% or just 17%?

[jimg20]

We have a reservation for July, and we are going to contact our VRBO owner to ask about us paying the difference. That seems like an undue burden for an owner to take on by themselves.

JIM

[stjohnjulie]

I'm with you on this one Jim. If you think an owner might have to pay 20% to a management company, 5% in gross receipts, and then take another 2.5% hit for the increase, it seems like it could be hard for some. Especially figuring that most of the villas are booked solid through April and even further out than that. I guess what I'm trying to say is that if I had booked a villa I wouldn't feel too put out if I had to pay the extra 2.5% understanding that it's no fault of the owner that the tax increased. For a lot of villa owners, it's not an income property, it's a long term investment property.

[Beachboy]

ncsusan
The hotel tax is 12.5% bur some places also have an energy charge. It should be disclosed in your contract but ask why anyway.

To put this in perspective if a week rental is $5000 then the additional tax is $125. If you can afford to fly and stay then $125 shouldn't be a deal breaker.

[jimg20]

I agree with Beachboy in that if you are willing to spend $5,000 for a place to stay, then $125 shouldn't be that big of a burden. But where does it become a burden?

I try to find a place for under $2,000. I've done the math. That's a $50 increase. I don't need to list all the things I could do with that $50 if I didn't give it to them. Have you seen the retirement fund commercial with the dominos knocking down the 25-foot-tall domino at the end? It starts with a very small $20 or $30 domino. When do we tell them, "here and no further"?

It wasn't that long ago when it was 8%. In a short time it went to 10 and now 12.5%. Don't start with the reasoning that we can't buy anything else today at the price we paid in 2000. By its very nature of a percentage of what we pay for the rental, it went up every year with the increase from a $1,200 rental in 2000 to a $1,600 rental in 2007 to today's $2,000 rental. In this model, taxes increased by $64 if it stayed at 8%. We were not paying 2000 level taxes in 2014. We were paying 2014 level taxes. It would be different if we could feel good about what they were doing with the money. They aren't improving the airport or ferry service. They aren't using the money for human services or job training. They SAY they are using I for horse racing. Is the money even going to get there, or line someone's pockets? Let's reappropriate $350,000 of that money and spend it on a couple of limos for the gov and the lt. gov. Oh wait, we need one on STT and another on STX for each of them.

It's time that they realized that you cannot increase golden egg production by strangling the goose. Instead they are counting on us to say that's not a deal breaker. Beachboy, you sound like the guy in the retirement program commercial. If you just let me take a little money out of your pocket now, you'll never miss it.

JIM

[ncsusan]

I received notice from our rental agent of this increase yesterday for our January stay. The agency that we book through is charging us 17% (up from 15%). Now I am really confused. It appears that I am paying an extra 4.5%. Suggestions!?!

Is it Caribbean Villas? They (and one or two other rental companies) charge a 5% service charge for villa rentals. So previously it was 10% tax and a 5% service charge for a total of 15%. Are you being charged 17.5% or just 17%?

Our Rental Company is St John Ultimate Villas. It is a "service charge" I spoke with them and asked if they were planning on doing anything about the additional fee and they said there was nothing that they could do. I just rechecked my email and it is 17% not 17.5%

[toes in the sand]

I see that the 12.5% tax will be on the full amount of your rental including cleaning charges energy surcharges etc. Will the service fee incurred by some of the management companies also be taxed at the same rate? ie: the 5% fee that Caribbean Villas charges.