Bill to Encourage Business-Led Beautification in V.I. Faces Backlash, Shelved for Revision

Senator Francis Pulls Proposal Following Criticism Over Potential Tax Impacts and Bond Risks

A bill aimed at establishing the V.I. beautification tax credit was shelved after sponsor Senator Novelle Francis fielded numerous concerns from various perspectives during Monday’s hearing of the Senate Committee on Budget, Appropriations and Finance.

According to Senator Francis, Bill No. 35-0097 “incentivizes corporate participation in local beautification efforts” by encouraging local business to work collaboratively with the Department of Public Works “to support a cleaner community.”

He argued that the measure was not a “giveaway” to corporate interests, but a means of encouraging the participation of the private sector “in ways that enhance our quality of life.” Mr. Francis noted that “the territory has historically incentivized programs to attract businesses as part of its economic development strategy,” and suggested that the same model could apply to the beautification of the territory. “This is an opportunity to build partnerships between the public and private sectors in ways that reap significant economic, social and environmental benefits for the Virgin Islands with the added benefit of supporting our tourism product,” he argued.

From the outset, Director of the Bureau of Internal Revenue Joel Lee seemed wary of the proposal. “This bill represents an opportunity for avoidance of payment of the gross receipts tax,” he noted, before firing off a barrage of questions about how participants would go about applying, and being approved, for permission from DPW to perform the specified beautification work. “Is there a bidding process, a licensing requirement and the execution of a contract? Would the participant be held to all other government vendor requirements under the procurement laws, such as registering with sam.gov?” Mr. Lee inquired. “Will the Department of Public Works ensure that the participant is enrolled in workman's compensation and obtains the required insurance for this type of work? In Subsection C, one, the expenditure can be payment to an employee or a contractor. Can the contractor be another taxpayer separate and apart from the approved participant?” he asked. “Does that mean that the participant can, in effect, get another person to do the work and receive the tax credit?” Mr. Lee wondered.