USVI-On-Line

This isn't good news. The VI Hotel Tax, which also applies to villa rentals, is likely to increase from its current 10% level to either 12% or 12.5%. There are two separate bills making their way through the VI legislature to implement these increases. I will update this thread if and when any of these bills become law. This may appear to be an easy way to raise revenue for a territory with serious fiscal problems, but it could just as well be self-defeating. As recently as 2010, the V.I. Hotel Tax was only 8%.

http://stjohnsource.com/content/news/lo ... x-increase

http://virginislandsdailynews.com/news/ ... -1.1943386

All the best,

Kevin

These legislatures all over the US need to learn that you cannot improve golden egg production by strangling the goose.

JIM

They have to pay for those new TV ads I've been seeing. This will knock some folks out of the USVI rental market.

GratefulDad wrote:This will knock some folks out of the USVI rental market.

Really?? You think a $100 increase on a $5,000 rental will 'Knock' people out of deciding on a VI vacation.?

Really?? You think a $100 increase on a $5,000 rental will 'Knock' people out of deciding on a VI vacation.?[/quote]

Maybe not the die hard St John visitors. Higher taxes are not what people want to pay right now. I know the USVI property taxes went up too so any rise in villa rental cost to offset the tax increase will be a double whammy on rentals.

Right on Gratefuldad and Coconuts... And just wait until newly opened Cuba tourism really kicks in.

I do believe the increase is something to consider especially since it could lead to additional increases as Grateful Dad mentioned. Many tourists will not see the difference as an additional 2%, they are looking at paying an additional 12.5% on top of the $5000 or more they are paying for their villa week.

Yes, Kklay, correct. For example, my ex wife goes on two cruises/year. Their ten day cruise cost way less than 5k (more like 2.5k) and the have a great room and food is included. When the guy on the fence looks at spending money on a vacation, he may be turned off by spending the extra money. I don't think it will effect the die hard St John visitor. Or maybe some will begin to look at other island vacations. Not sure if this is a good idea for the USVI's right now.

Between the increased costs to visit, this impending tax increase on top of an already high tax rate, coupled with increase in crime and the apparent disregard for visitors issues by the police and govenment, it is becoming obvious that the USVI would rather that I only pass through on my way to the BVI.
Thank you for making my vacation choices much easier.

On second thought, if these issues cause visitors to go elsewhere thus causing a slowdown on the villa rentals, thus causing a slowdown in the building of new villas for rentals, thus causing a drop in demand for jeeps and other expenses that villa renters require, perhaps the island could settle back into the lazy place that we remember it as.
My suggestion to the USVI governing body is to increase the 10% hotel tax to 20% or maybe 25%. See if that fattens their wallets or if it reduces the visitor footprint on the islands allowing them to slowly return to a more natural state after people stop visiting and villa owners are forced into foreclosure because of the lack of renters and those employed to build and maintain villas have to leave to find employment elsewhere. At a high enough hotel tax rate you will have only day cruisers, bare site campers and boaters visiting the islands.

Since there is no sales tax imposed by the VI government perhaps those savings to visitors could easily offset any hotel tax if they are considering expenses in the USVI compared to most other destinations.

I am not sure how constructive 'toes in the sand''s tax increase is - the majority of construction workers appear to be from Haiti and the DR and are unlikely to move elsewhere from here and villa foreclosure would only reduce the high cost of real estate on STJ.

I'm curious. When would this go in effect and if a renter already has a deposit on a villa, would they then be charged the increased tax amount? Wondering if I'm going to have to break some bad news to 3 other couples

cjroyer wrote:I'm curious. When would this go in effect and if a renter already has a deposit on a villa, would they then be charged the increased tax amount? Wondering if I'm going to have to break some bad news to 3 other couples

Seriously, how 'bad'!! can the news be - $25 p/p if the rental was $10,000 for 4 couples.

cjroyer: We have definitely considered the question you posed, and while the tax hike amounts to only a $100-ish increase on a typical weekly villa rental, we cannot start charging now for a tax that may (will) take effect in the future, even if that future is likely to be measured in weeks. Our villas book six months to a year in advance, so during the phase-in, we will have to eat this. As soon as one of the bills becomes law, we can begin to recover the new tax for subsequent rentals.

All the best,

Kevin

ExitZero, your right. $25/pp isn't that much. I was just curious as to how this would affect current contracts.