Exemption from gross receipts and excise taxes for certain federally funded projects

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  • Any project being constructed or rehabilitated with funds provided through a direct loan from the United States Department of Housing and Urban Development pursuant to Section 202 of the Housing Act of 1959, as amended (12 U.S.C. § 1701q) or Section 811 of the Cranston-Gonzales National Affordable Housing Act (42 U.S.C. § 8013), and a contractor or subcontractor thereof, shall be exempt from the payment of all excise and gross receipt taxes related to the construction or rehabilitation of the project; provided, however, that eligibility for such tax exemption shall be conditioned upon the following:
    • (a) Any contractor or subcontractor shall guarantee that preference in employment for the project shall first be given to citizens of the United States who have resided in the Virgin Islands for at least one year or permanent residence who have resided in the Virgin Islands for at least one year, and who are qualified to perform the work to which employment relates; proof of residency shall be demonstrated by:

      • (A) possession of a:

        • (i) W-2 Form; or

          • (ii) voters registration card; or

          • (iii) permanent resident card; or

          • (iv) Virgin Islands driver's license; and

        • (B) having been domiciled in the Virgin Islands; and

        • (C) being a resident of the Virgin Islands at the end of the most recent taxable year for the purpose of satisfying his federal income tax liability; or

      • (2) being a member of the United States Armed Services having been enlisted in the Virgin Islands or being a domiciliary of the Virgin Islands having been enlisted in another jurisdiction; or

      • (3) being a student who is a resident of the Virgin Islands and is engaged in educational pursuits outside the Virgin Islands.

    • (b) Every contractor or subcontractor shall certify in writing to the Commissioner of Labor that they will comply with the provisions of subsection (a) of this section and will grant preference in hiring to Virgin Islands residents and that they will utilize the services of the Employment Security Agency of the Department of Labor both in the initial hiring and in the filling of vacancies during the term of the proposed project.

    • (c) Every contractor and subcontractor shall certify in writing to the Commissioner of Labor that they will have at least eighty percent (80%) Virgin Islands domiciliaries, sixty percent (60%) minorities and veterans, twenty-five percent (25%) women and ten percent (10%) handicapped employed on the project.

    • (d) Every contractor and subcontractor shall guarantee and shall certify in writing to the Commissioner of Labor that all materials, supplies and equipment shall be purchased in the Virgin Islands.

    • (e) If the Commissioner of Labor determines that any provision of this section has been violated, he is authorized to petition the District Court for an injunction to stop any further work on the project until such time as the contractor and subcontractor are in compliance with all provisions of this section. The Commissioner of Labor is further authorized to impose an administrative fine of $1,500 a day for every day that a contractor or subcontractor is in violation of any provision of this section. Any fine that is imposed may be appealed to the District Court within 30 days of the date of the imposition of the last fine that is imposed.

    • (f) The Commissioner of Labor shall monitor the construction of the project and shall certify in writing to the Governor and the Legislature within 60 days of the commencement of the project that the contractor has complied with the Small Business Subcontracting Program, the Small Business Development Agency Set-aside Program, and any other applicable federal statutes, rules and regulations with respect to the hiring of local residents.


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