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USVI proposing $30/day tax on timeshares

legalfee

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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%.
 

dioxide45

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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.
 

chuck1955

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"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:)?
 

DavidnRobin

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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!
 

DavidnRobin

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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.)
 

Tia

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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?

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.)
 

dioxide45

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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.
 

DavidnRobin

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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.


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TUGBrian

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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!
 

DavidnRobin

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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?
 

dioxide45

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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?:eek:
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.
 

dannybaker

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

Jayco29D

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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.
 

pedro47

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This island was in financial troubles before the hurricane.
 

DavidnRobin

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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.




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Jayco29D

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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.

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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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