V.I. Gov’t fears financial crisis…defies federal tax bill injunction

St. Thomas, USVI- Despite a 5-year federal court injunction in effect proscribing the issuance of new property tax bills, the Virgin Islands government on Wednesday announced its intention to send out property tax bills calculated using new valuations and rates.

In 2003, then Governor Charles Turnbull had signed the necessary documents to have the bills frozen at 1998 levels after it was deemed that the method being used in the VI to assess property taxes was unconstitutional.

In defense of the move however, VI government attorneys issued a statement citing the decision as a preventative measure in the face of financial crisis.

“The government must immediately send out the 2006 property tax bills so that it can collect property taxes this fiscal year, avert a financial crisis, pay its current expenditures, allocate budgeted funds to various government agencies and departments to ensure their continued operation, meet its educational responsibilities to the children of the Virgin Islands, provide necessary social services to its residents, and pay its contractual obligations to government employees, vendors and lenders,” the statement read, according to locate media reports. ~~Adz:Right~~

The property owning public can expect to receive the new bills as early as next Monday provided that the lieutenant governor's office, which oversees property tax billing and collection, remains true to their public announcement and mails them today Friday, Aug 22.

Senate passed a new set of property tax rates earlier this year that replaced the flat rate of 0.75% of the property’s value with separate rates for various categories including commercial, residential and time share properties.  

Property owners challenged the new rates and some groups retained attorneys who sued the local government over unfair taxation. Since then, attorneys for both sides have been in and out of the court room over the issue without any real resolution.

V.I. Attorney General Vincent Frazer defended the government’s decision saying he felt they were on solid legal ground and had the clout to send out the new tax bills. One of the lead attorneys representing property owners said the government’s actions came as a surprise and that they [attorneys] are discussing the issue to decide on the next step.