(1) Each Enterprise Zone Business shall qualify for the following tax credits and tax benefits:
(a) A nonrefundable gross receipts tax credit or an income tax credit equal to twenty-five percent (25%) of the actual value expended within a fiscal year for construction of a new building within the Enterprise Zone;
(b) A nonrefundable gross receipts tax credit or an income tax credit equal to twenty-five percent (25%) of the actual value expended within a fiscal year for rehabilitation of buildings or other real property within the Enterprise Zone;
(c) A nonrefundable gross receipts tax credit or an income tax credit equal to ten percent (10%) of the expenditures within a fiscal year for investment in machinery and equipment for exclusive use by the Enterprise Zone Business;
(d) A gross receipts tax rate of three percent (3%) for gross receipts derived by the Enterprise Zone Business, pursuant to Title 33, Chapter 3, section 43, Virgin Islands Code;
(e) A one-time nonrefundable $500 income tax credit for every job created within the Enterprise Zone for which a resident of the Virgin Islands as defined in section 1003 herein is hired, which credit shall be taken for the fiscal year in which the resident is hired;
(f) A property tax credit against taxes imposed pursuant to, Title 33, Chapter 81, section 2301, Virgin Islands Code, equal to the increase in property taxes assessed due to renovation, rehabilitation, or construction of property within the Enterprise Zone.
(2)
(a) Each enterprise zone business may qualify for the following nonrenewable tax benefits for a period of five years for eligible activities based on the town plan adopted by the Enterprise Zone Commission for the respective Enterprise Zone:
(1) An income tax credit of 90 percent;
(2) An exemption from gross receipts of 100 percent; and
(3) An exemption from property taxes of 100 percent.
(b) To quality and remain eligible for benefits under this paragraph, the applicant must agree in writing to or continue to maintain a business within an Enterprise Zone for a period of ten years from the first date of receipt of benefits under this paragraph.
(c) The benefits program under this paragraph expires eight years from the date the Commission adopts the town plans.
(3) The Enterprise Zone Business must indicate for the fiscal year that an expenditure is made whether it is taking the gross receipts or the income tax credit pursuant to subsections (a), (b), and (c) for such expenditure.
(4) Any credit derived by an entity that is not taxable at the entity level, such as a limited liability company, partnership, or Subchapter S corporation, shall flow through to its owners as long as they are residents of the Virgin Islands as defined in section 1003 herein.
(5) Only expenditures incurred over a consecutive five-year period can give rise to tax credits under this chapter, and each Enterprise Zone Business can elect the commencement date of such five-year period. An Enterprise Zone Business can elect a commencement date for expenditures of up to two years prior to the date that the Enterprise Zone Business has been granted benefits under this chapter. The benefits can be taken over a period (Benefit Period) of up to ten years.
(6) The property tax benefit and the reduced gross receipts tax rate will apply for the benefit period.
(7) Each Enterprise Zone Business must obtain and maintain a valid license to conduct business in the territory for each year in which it receives tax benefits under this section, and if for any reason an Enterprise Zone Business does not have a valid license in place for one or more years, it will not be entitled to the tax benefits under this section without further action on the part of the Enterprise Zone Commission.
(8) Any duly licensed bank or other financial institution doing business in the territory shall be entitled to a reduction in its income tax liability for up to five years per loan, equivalent to the percentages set forth in the table in subsection (9) of this section, of the income taxes incurred to the Virgin Islands by such duly licensed bank or other financial institution that are attributable to interest received on loans granted to Enterprise Zone Businesses at below-market rates. The proceeds of such loans must be utilized exclusively by the Enterprise Zone Business within one or more Enterprise Zones, and the Enterprise Zone Business must so represent in writing to the bank or other financial institution as a condition for receipt of the loan. If a loan is extended for more than five years to an Enterprise Zone Business, the benefits of this subsection shall apply only to interest received in those years that the borrower is an Enterprise Zone Business within the meaning of section 1003(5) of this chapter.
(9) The reduction in income tax liability established for duly licensed banks and other financial institutions described in subsection (8) of this section shall be as follows:
| (A) | Year one | 90% |
| (B) | Year two | 70% |
| (C) | Year three | 50% |
| (D) | Year four | 30% |
| (E) | Year five | 10% |
(10)
(a) The owner of real property located within a designated Blighted Area that is reconstructed, rehabilitated or upgraded to accommodate either a business or a residence shall receive a property tax credit of 100% of the property taxes authorized under title 33, chapter 81, of this code, beginning on the date of finance closing and shall continue for one and one half (1½) the financing period, not to exceed a total of five (5) years. In the event the reconstruction, rehabilitation or upgrading is not completed within five (5) years, except where the delay is caused by an act of God, the owner shall become liable for all property tax credits which were received
If the reconstruction, rehabilitation or upgrading is fully funded by the property owner, the tax credit shall commence on the date a Certificate of Occupancy is issued by the Department of Planning and Natural Resources.(b) At the expiration of the initial property tax credit period, the owner shall be eligible to receive a property tax credit of 25% of the property taxes paid for an additional five (5) years if the property continues to be maintained in a habitable condition.
(11) The Virgin Islands Bureau of Internal Revenue shall issues rules and regulations for the administration of subsections (1)(a) through (e), (3), (4), (5), (7), (8), and (9) of this section; and, the Office of the Tax Assessor shall issue rules and regulations for the administration of subsections (1)(f) and (10) of this section.