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| VIRGIN ISLANDS CODE ANNOTATED | | Copyright © 2006 | | by THE LIEUTENANT GOVERNOR | | for THE GOVERNMENT OF THE VIRGIN ISLANDS | | *** Statutes current through Act 6820 of the 2005 Regular Session *** | | *** Annotations current through October 13, 2006 *** | | TITLE TWENTY-NINE Public Planning and Development | | Chapter 12. Industrial Development Program | | | | HISTORY: -Added July 17, 1972, No. 3263, § 1, Sess. L. 1972, p. 196; amended Sept. 23, 1975, No. 3478, § 1, Sess. L. 1975, p. 140; Dec. 8, 1986, No. 5224, § 1(1), Sess. L. 1986, p. 342; Mar. 19, 1990, No. 5523, § 11, Sess. L. 1990, p. 63. | | | | NOTES: | | | | HISTORY | | | | Revision note | | -1998. | Substituted "United States Virgin Islands" for "Virgin Islands" throughout the section; substituted "Government of the United States Virgin Islands" for "Government of the Virgin Islands" in subsections (a) - (c); substituted "Territory of the United States Virgin Islands" for "Territory of the Virgin Islands" in subsection (a) and in subsection (c), substituted "United States" for "U.S." for purposes of clarity pursuant to section 14 of Title 14. | | Effective date. | Act Sept. 23, 1975, No. 3748, § 6(a), Sess. L. 1975, p. 161, provided:
"The provisions of this Act [this chapter] shall become effective 30 days after it shall become law [approved Sept. 23, 1975]. Applications for industrial development benefits under previously existing law, pending upon such date, shall be considered under the provisions of this Act [this chapter]."Act July 17, 1972, § 5(a), provided:
| | | | "(a) | The provisions of this Act [adding section 701-748 of this title and repealing chapter 201 of Title 33] shall become effective July 1, 1972. Applications for investment incentive benefits under previously existing law, pending upon such date, shall be considered under the provisions of this Act [chapter]." | | Amendments | | | | -1990. | | Subsection (d): Added. | | | | -1986. | | Inserted "the contribution of beneficiaries to the development of the educational system of the Territory" preceding "and the preservation of the environment" in the introductory paragraph. | | | | -1975. | | Amended generally to provide for certain industrial development benefits. | | | | Effective date of amendments | | | | -1986. | | Act Dec. 8, 1986, No. 5224, § 10(a), Sess. L. 1986, p. 365, provided that the section of the act which amended this section shall take effect January 1, 1987, provided, however, that the exchange of tax subsidies for tax exemptions or reductions shall not take effect until October 1, 1987. | | | | Severability of enactment. | | See Act July 17, 1972, § 6, Act March 19, 1990, No. 5523, § 14, Sess. L. 1990, p. 66, and 1 V.I.C. § 51. | | | | Inconsistent laws. | Act July 17, 1972, § 4, provided:
"Title 33, chapter 201, Virgin Islands Code, and any other laws in conflict with the provisions of this Act [sections 701-748 of this title], are hereby repealed." | | | | Investment incentive benefits. | Section 2 of Act July 17, 1972, provided:
"Nothing contained in this Act [adding sections 701-748 of this title and repealing chapter 201 of Title 33] shall be construed to affect in any manner any investment incentive benefits heretofore granted under pre-existing law, or the granting of any such benefits upon applications approved prior to the effective date of this Act [July 1, 1972], however, when the benefits granted under pre-existing law expire, all applications for continuation of benefits shall be made, and the qualifications of the applicant shall be determined, under the provisions of this Act [this chapter]." | | | | Transfer of funds, property and personnel to Investment Incentive Commission. | | See Act July 17, 1972, § 3. | | | | Tax exemption or subsidy benefits granted under former chapter 12. | | See Act Sept. 23, 1975, No. 3748, § 3, Sess. L. 1975, p. 160. | | | | CROSS REFERENCES | | Government Development Bank, see § 901 et seq. of this title. | | | | | | Annotations Under Prior Law | | 1. Purpose. 2. Legislative Policy. 3. Generally. 4. Refusal to grant exemption or subsidies. 5. Enforceable contract. 6. Vested rights. 7. Transfer of benefits. 8. Particular activities generally. 9. Description. 10. Hearing. 11. Post-repeal exemptions. | | | | 1. Purpose. | | | | Purpose of tax exemptions and subsidies for certain types of business, as expressed in statutory declarations of policy, is to attract new capital to the Virgin Islands, to encourage establishment of new industry, to promote and stabilize the economy, and to make investment capital available to new and existing businesses. 4 V.I.Op.A.G. 28. (Decided under prior law.) | | | | 2. Legislative Policy. | | | | The legislative policy with respect to the granting of tax benefits is set forth in this section, which shows the Legislature's mandatory intention for the granting of the benefits and allows discretion as to whom shall receive the benefits. Virgo Corp. v. Paiewonsky, 5 V.I. 417, 259 F. Supp. 26, 1966 U.S. Dist. LEXIS 9578 (D.C.V.I. 1966), rev'd on other grounds, 6 V.I. 256, 384 F.2d 569, 1967 U.S. App. LEXIS 4996 (3d Cir. 1967), cert. denied, Virgo Corp. v. Paiewonsky, 390 U.S. 1041, 88 S. Ct. 1634, 20 L. Ed. 2d 303, 1968 U.S. LEXIS 1840, (1968), rehearing denied, Virgo Corp. v. Paiewonsky, 392 U.S. 917, 88 S. Ct. 2053, 20 L. Ed. 2d 1379, 1968 U.S. LEXIS 1467 (1968). (Decided under prior law.). | | | | 3. Generally. | Tax benefits under the Industrial Incentive Program are available to companies that require the benefits to stimulate their establishment or expansion in the Virgin Islands. Virgo Corp. v. Paiewonsky, 5 V.I. 417, 259 F. Supp. 26, 1966 U.S. Dist. LEXIS 9578 (D.C.V.I. 1966), rev'd on other grounds, 6 V.I. 256, 384 F.2d 569, 1967 U.S. App. LEXIS 4996 (3d Cir. 1967), cert. denied, Virgo Corp. v. Paiewonsky, 390 U.S. 1041, 88 S. Ct. 1634, 20 L. Ed. 2d 303, 1968 U.S. LEXIS 1840, (1968), rehearing denied, Virgo Corp. v. Paiewonsky, 392 U.S. 917, 88 S. Ct. 2053, 20 L. Ed. 2d 1379, 1968 U.S. LEXIS 1467 (1968). (Decided under prior law.) The Legislature intended that the prospective business would determine if it would be stimulated to establish in the Virgin Islands because of the tax benefits under the Industrial Incentive Program rather than that someone else would determine if the business would or would not be so stimulated. Virgo Corp. v. Paiewonsky, 5 V.I. 417, 259 F. Supp. 26, 1966 U.S. Dist. LEXIS 9578 (D.C.V.I. 1966), rev'd on other grounds, 6 V.I. 256, 384 F.2d 569, 1967 U.S. App. LEXIS 4996 (3d Cir. 1967), cert. denied, Virgo Corp. v. Paiewonsky, 390 U.S. 1041, 88 S. Ct. 1634, 20 L. Ed. 2d 303, 1968 U.S. LEXIS 1840, (1968), rehearing denied, Virgo Corp. v. Paiewonsky, 392 U.S. 917, 88 S. Ct. 2053, 20 L. Ed. 2d 1379, 1968 U.S. LEXIS 1467 (1968). (Decided under prior law.) Under the industrial incentive program granting tax exemption and subsidy benefits to newly established enterprises in the Virgin Islands it must appear that the applicant has fully met the objective criteria required of applicants and also that the applicant's business or industry will promote the public interest by economic development of the Virgin Islands and that its establishment or expansion will require the stimulus of the assistance authorized. Virgo Corp. v. Paiewonsky, 6 V.I. 256, 384 F.2d 569, 1967 U.S. App. LEXIS 4996 (3d Cir. 1967), cert. denied, 390 U.S. 1041, 88 S. Ct. 1634, 20 L. Ed. 2d 303, 1968 U.S. LEXIS 1840, (1968), rehearing denied, 392 U.S. 917, 88 S. Ct. 2053, 20 L. Ed. 2d 1379, 1968 U.S. LEXIS 1467 (1968). (Decided under prior law.) Since the basic purpose of the industrial incentive program was to advance the economic development of the Virgin Islands, grants of public funds or property to private persons to assist in the establishment of an enterprise must be to the advantage of the public. Virgo Corp. v. Paiewonsky, 6 V.I. 256, 384 F.2d 569, 1967 U.S. App. LEXIS 4996 (3d Cir. 1967), cert. denied, 390 U.S. 1041, 88 S. Ct. 1634, 20 L. Ed. 2d 303, 1968 U.S. LEXIS 1840, (1968), rehearing denied, 392 U.S. 917, 88 S. Ct. 2053, 20 L. Ed. 2d 1379, 1968 U.S. LEXIS 1467 (1968). (Decided under prior law.) It is only if and when the Governor, upon considering the Board's recommendations, finds that both sets of criteria have been met and issues a certificate granting benefits under the program that a contractual obligation arises. Virgo Corp. v. Paiewonsky, 6 V.I. 256, 384 F.2d 569, 1967 U.S. App. LEXIS 4996 (3d Cir. 1967), cert. denied, 390 U.S. 1041, 88 S. Ct. 1634, 20 L. Ed. 2d 303, 1968 U.S. LEXIS 1840, (1968), rehearing denied, 392 U.S. 917, 88 S. Ct. 2053, 20 L. Ed. 2d 1379, 1968 U.S. LEXIS 1467 (1968). (Decided under prior law.) Watchmaker's application for tax exemption and subsidy benefits under industrial incentive program did not give rise to a contractual obligation on the part of the Virgin Islands to grant the exemption benefits. Virgo Corp. v. Paiewonsky, 6 V.I. 256, 384 F.2d 569, 1967 U.S. App. LEXIS 4996 (3d Cir. 1967), cert. denied, 390 U.S. 1041, 88 S. Ct. 1634, 20 L. Ed. 2d 303, 1968 U.S. LEXIS 1840, (1968), rehearing denied, 392 U.S. 917, 88 S. Ct. 2053, 20 L. Ed. 2d 1379, 1968 U.S. LEXIS 1467 (1968). (Decided under prior law.) Government of the Virgin Islands is not bound to grant benefits under the industrial inventive program to all who apply for such benefits merely because it had earlier encouraged the establishment of other similar industries by granting such benefits to them. Virgo Corp. v. Paiewonsky, 6 V.I. 256, 384 F.2d 569, 1967 U.S. App. LEXIS 4996 (3d Cir. 1967), cert. denied, 390 U.S. 1041, 88 S. Ct. 1634, 20 L. Ed. 2d 303, 1968 U.S. LEXIS 1840, (1968), rehearing denied, 392 U.S. 917, 88 S. Ct. 2053, 20 L. Ed. 2d 1379, 1968 U.S. LEXIS 1467 (1968). (Decided under prior law.) Under industrial incentive program, the board and the governor are entitled to consider each applicant for tax exemption on his individual merits in the light of the extent to which his business or industry will promote the public interest by economic development of the Virgin Islands. Virgo Corp. v. Paiewonsky, 6 V.I. 256, 384 F.2d 569, 1967 U.S. App. LEXIS 4996 (3d Cir. 1967), cert. denied, 390 U.S. 1041, 88 S. Ct. 1634, 20 L. Ed. 2d 303, 1968 U.S. LEXIS 1840, (1968), rehearing denied, 392 U.S. 917, 88 S. Ct. 2053, 20 L. Ed. 2d 1379, 1968 U.S. LEXIS 1467 (1968). (Decided under prior law.) After January 1, 1962, the acting governor had no power to grant requests for tax exemption and subsidy not authorized by appropriate legislation. Maisonette Apts., Inc. v. Government of the Virgin Islands, 7 V.I. 5, 407 F.2d 236, 1969 U.S. App. LEXIS 8850 (3d Cir. 1969). (Decided under prior law.) Contention that industrial incentive tax exemption and subsidy statute provided that it must be found that the establishment of the business required the stimulus of such government assistance drew upon that section of the statute which merely outlined the purposes of the program, and the question of such government stimulus was one for the discretion of the Industrial Incentive Board and the Governor when making a decision regarding an application for an exemption from taxes and/or a subsidy, not an absolute requirement for a grant. 6 V.I.Op.A.G. 311. (Decided under prior law.) Draft of grant of tax exemption was not in order for Governor's required signature where three of the four undertakings mentioned in the draft were not within the purview of tax exemptions statute and where the stimulus of government assistance was required and could not exist in the present case because the undertaking was fully completed. 6 V.I.Op.A.G. 164. (Decided under prior law.) Analysis of tax exemption statute showed that it was legislature's intent that grants of subsidies for import duties paid should be in an amount equal to that paid by the grantees, less the cost of collection paid to U.S. Customs. 6 V.I.Op.A.G. 157. (Decided under prior law.) |
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