Virgin Islands

[DC]

I am planning on living somewhere tropical for a couple of months if I get cured of this Lyme Disease. I decided on St. Croix in the U.S. Virgin Islands. I discovered that  they are a territory of the U.S. and not a state. They can vote but not for president. They pay income tax but it stays there and doesn't go to the federal government. They dont have a sales tax. Property tax on a $300,000 house is only $300 a year. Drinking age is 18. Cigarettes and alcohol is cheap because they don't pay taxes on it ( I guess that is because of the duty free shopping). Gas is supposed to be 50 cents cheaper a gallon and the have their own refinery. I read they didn't have SSI or medicaid but I havn't checked to see if thats true yet. I understand guns are legal unless it's a machine gun or sawed off shotgun. Drugs arn't legal but I understand they are easy to get and cheap. A kilo of cocaine is only $12,000. I think this is very cheap but I don't use it .

What I was wanting to know was if the FSP concidered territories in the state vote because I joined after the states were picked. I was also wanted to see if I liked it there if someone had a reason why I would come back to the U.S. mainland. I have been trying to come up with a reason and havn't been able to come up with any.

[error]

Well, it is called the Free State Project.

[DC]

Well, it is called the Free State Project.

Yes it is but since so many people want to succeed it wouldn't be a STATE anymore.

[error]

Well, it is called the Free State Project.

Yes it is but since so many people want to succeed it wouldn't be a STATE anymore.

Huh? The project succeeds when 20,000 people move.

[DC]

I don't think it will ever succeed myself. I also don't think excluding a place because of the grammar is a good reason either. If I did care about grammar then the project wouldn't succeed the state would.

[error]

Oh, well, why didn't you say so? I'm all for secession.

[Kevin Bean]

Well, it is called the Free State Project.

Yes it is but since so many people want to succeed it wouldn't be a STATE anymore.

Huh? The project succeeds when 20,000 people move.

I don't think it will ever succeed myself. I also don't think excluding a place because of the grammar is a good reason either. If I did care about grammar then the project wouldn't succeed the state would.

Oh, well, why didn't you say so? I'm all for secession.

Yeah, I think DC was referring to secession.
succeed secede

State can refer to an independent country. Like what each of these United States used to be.

[DC]

Well, it is called the Free State Project.

Yes it is but since so many people want to succeed it wouldn't be a STATE anymore.

Huh? The project succeeds when 20,000 people move.

I believe DC is referring to secession.
succeed secede

State can refer to an independent country. Like what each of these United States used to be.

Yes secession I checked it on google because it didn't look right and I got back a bunch of hits that were spelled wrong also talking about the civil war.

[Kevin Bean]

Yes secession I checked it on google because it didn't look right and I got back a bunch of hits that were spelled wrong also talking about the civil war.

Seceding and succeeding are both desirable.

[DC]

St.Croix has been talking about suceeding from the other Virgin Islands for years. I found this after I spelled it right explaining why.                               

http://www.st-croix.net/stepchild/divorce.html

[aworldnervelink]

I just read an article the other day... the feds are looking to crack down on the tax advantages of the VI.

[DC]

I think you are talking about the crack down on hedge funds in the V.I.. The new rules that are in effect or on the way for hedge says people in the U.S. can't invest in a hedge fund unless you have liquid assets of $500,000 or more or you arn't allowed to invest in a hedge fund. This means that most of us wouldn't be able to invest in a hedge fund anyway. The performance of most hedge funds don't beat a stock index fund anyway.


This cracdown in the V.I. was brought about because a Massachusetts life insuranse executive claimed the benifits of living in the V.I. without living there. What I read is if you live there for six months you still get those tax  benifits.

[aworldnervelink]

Article:

The United States Virgin Islands (USVI) lies 1100 miles southeast of Miami, Florida - and it's one of the most impoverished jurisdictions under the American flag. But most Americans only know the islands as a vacation venue with beautiful resort hotels, white sandy beaches and blue lagoons.

The three principal islands -- St. Croix, St. John and St. Thomas -- have a population of 108,605. Per capita income in the territory is US$18,652. That's less than half the average in the continental U.S. and US$7,000 less than Mississippi, the poorest state.

In addition to extreme poverty, the U.S. Virgins also have another unusual distinction. They have been, until now, America's very own tax haven. But if the IRS and U.S. Senator Charles Grassley have their way, that won't last for long.

U.S. Created Its Very Own Tax Haven
In 1986, the U.S. Congress created special tax breaks to spur economic development in this poor territory. They allowed the Virgin Islands to offer a major tax deal to Americans who moved there to set up a business. Companies and individuals only had to pay 10% of the income tax and other taxes they paid in the United States. (By law Virgin Islanders pay U.S. tax rates, but the money goes to the local government, not Washington.) To qualify for the 10% tax break, companies had to invest at least US$100,000 in the local economy. They had to hire at least 10 people, with 80% of those employees from the Virgin Islands. And finally, they had to contribute US$50,000 or more to local charities.

The EDC launched an aggressive marketing campaign to attract corporations to USVI. As a result, about 100 companies moved to or expanded on the islands between 2002 and 2004, and employed nearly 3,100 people. The tax benefit program began paying dividends almost immediately after hedge funds were invited in 2001. The islands' tax revenue doubled to US$800 million in a five-year period ending in 2005. The increase erased a US$287.6 million deficit for the territory in 1999. The EDC program was worth about US$100 million annually to the local economy. A USVI Government House spokesman said that the EDC was crucial in lifting the territory from a dire financial crisis seven years ago to the present-day projection of a fiscal year surplus in excess of US$50 million.

One Anonymous Note Brought Havoc to the USVI's Tax Advantages
All went well until 2003 when someone sent the IRS an anonymous letter. The letter included marketing materials advertising the territory's economic program as an easy way to legally reduce taxes while living in a sunny Caribbean climate -- which it was. But U.S. Senator Charles Grassley (R-IOWA) saw this as tax evasion, notwithstanding the fact that the law clearly allowed these tax breaks.

The anonymous letter included a Jan. 15, 2002 memo recommending that an unnamed client obtain a post office box in the territory, open a local bank account with the appropriate balance, get a USVI-issued driver's license and register to vote in the islands. On May 20, 2003, the IRS raided Kapok Management LP, a financial-services firm. The IRS accused Kapok Management of sheltering income for dozens of partners who were living on the U.S. mainland. Afterwards, they arrested exactly one Massachusetts life insurance executive in February 2004 for tax evasion charges in St. Croix.

The events prompted the publicity-seeking Grassley, (who at one time was a major critic of the IRS as being too touch on taxpayers), to charge the IRS wasn't acting fast enough to combat what he called tax fraud. An insurance executive, Gary Payne, of Beverly, Massachusetts, had claimed tax benefits without living in the territory. Payne had registered to vote in the territory, got a driver's license there and rented both an apartment and a condominium. He lived and worked full-time in Massachusetts, according to court documents. Facing five years in prison, he reached a plea agreement in exchange for a lenient sentence, which hasn't yet been handed down.

New Strict Six Month Residency Requirement Scares Away
U.S. Companies, Hedge Funds
The Grassley legislation imposed a strict six-month residency requirement and clarified that the territory's tax benefits apply only to income earned exclusively in the islands. This law was slipped into a major tax bill without any hearings, or without even notice to USVI officials, who were stunned to learn it had become law. Congress's Joint Committee on Taxation estimated in a wild guess that Grassley's legislation would increase federal revenue by US$400 million over a 10-year period, which it hasn't so far.

In a reign of terror the Payne case prompted the IRS to open about 100 audits says Marjorie Rawls Roberts, a St. Thomas-based tax lawyer who has advised about half of all USVI-based hedge funds. Roberts says that even her clients who aren't being audited still have to wrestle with the new residency requirement. Since the new law was adopted, 23 of the 49 hedge funds have either halted their activities temporarily or withdrawn from the islands. An expected finance boom never came. Instead, the IRS and Senator Grassley knocked it out with a combination punch of legislation and subsequent IRS rules that are still unclear.

The old rules required a resident to be on the Islands for 122 days a year on average, over three years, to qualify. The new rules require a resident to spend at least 183 days, or roughly six months, every year. The IRS asserted that it had authority to go back as far as it wanted without regard to the statute of limitations. The number of financial firms that make the Virgin Islands their corporate home has fallen to less than 60 from 100 two years ago.

The IRS also drafted an intrusive new form for island residents it says is needed to prove valid residency. The form requires those who stop filing tax returns with the IRS in order to file them in the USVI to list where their immediate family lives, where their cars are registered and where they hold driver's licenses. The form also asks for a list of memberships in social, cultural, professional and country clubs as well as chambers of commerce and political organizations in which the resident participates.

Frank Schulterbrandt, chief executive officer of the EDC says: "In the states, they definitely see that they are losing taxes when some of their taxpayers move elsewhere. All of the people everywhere are competing for the same business. What's wrong with the Virgin Islands attracting some of those people?"

In fact, the betrayal of the Virgin Islands by the federal government, assures only one thing -- that Americans seeking legal tax breaks will instead find them in secure tax havens such as Panama, Belize, the Channel Islands, Singapore and Hong Kong.

Meanwhile, the U.S Virgins have been had.

That's the way it looks from here,
BOB BAUMAN, Legal Counsel

[DC]

 

The three principal islands -- St. Croix, St. John and St. Thomas -- have a population of 108,605. Per capita income in the territory is US$18,652. That's less than half the average in the continental U.S. and US$7,000 less than Mississippi, the poorest state.[\quote]

That is misleading. It's filled with rich people. A lot are retired or have their money in offshore accounts. You can't find a good house in St. John or St.Thomas for under 3 or $400,000. St. Croix has some better deals now but that isn't going to last long. They have a casino there now and there are plans to build more. The babyboomers are retireing soon and I think that will run the prices up like the other islands.There are poor people there a lot came from Jamaica and the other Islands and they do commit some crimes. I will find out how much of a problem that is when I visit. A tax break to millionare hedge funds that set up fake residence and live in Mass. isn't going to make them less poor or less lazy. They still get the tax break if they actually move there.