Senate committee tables Gross Receipts Tax bill
Published: March 19, 2014
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ST. THOMAS - A bill to lower the territory's Gross Receipts Tax was held in the Senate Finance Committee on Tuesday.
Another bill, to leverage a portion of the territory's future Federal Highway Administration funds to help pay for immediate repairs to St. Croix's roads, was removed from Tuesday's agenda and will be heard at a later date.
The bill to reduce the Gross Receipts Tax was sponsored by Sen. Alicia Hansen. The measure would lower the existing tax rate from 5 percent to 4.5 percent.
The measure is being considered against the backdrop of a looming $40 million budget shortfall for the current fiscal year.
Business owners are required to pay Gross Receipts taxes on any revenues coming into their business.
The Gross Receipts Tax rate had been 4 percent before senators passed two hikes in the tax in the last three years, bringing it to 5 percent, which amounts to a 25 percent increase.
DeJongh started pushing for the 25 percent increase in his State of the Territory Address in January 2011.
Senators first raised the tax from 4 percent to 4.5 percent in March 2011, and in February 2012, they voted to increase the tax to 5 percent.
That increase went into effect March 1, 2012, and was to remain in place until corporate income taxes reached a level of $185 million.