Sale or transfer of tax credits

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  • (a) Any tax credits with respect to a Territory Certified Production earned by a Production Company and previously claimed but not used by such Production Company against its income tax or other tax liability may be transferred or sold in whole or in part by such Production Company to another Virgin Islands taxpayer, subject to the following conditions:

    • (1) The Production Company may make only a single transfer or sale of tax credits earned in a taxable year; however, the transfer or sale may involve one or more transferees;

    • (2) The Production Company shall submit to the Economic Development Authority and to the Virgin Islands Bureau of Internal Revenue a written notification of any transfer or sale of tax credits not later than 30 days after the transfer or sale of such tax credits. The notification must include the Production Company’s tax credit balance prior to transfer, the credit certificate number, the remaining balance after transfer, all tax identification numbers for each transferee, the date of transfer, the amount transferred, and any other information required by the Economic Development Authority or the Virgin Islands Bureau of Internal Revenue;

    • (3) The Virgin Islands Bureau of Internal Revenue shall disallow tax credits to any Production Company that fails to comply with this subsection until the Production Company is in full compliance;

    • (4) The transfer or sale of this tax credit does not extend the time in which such tax credit may be used. The carry-forward period for tax credit that is transferred or sold begins on the date on which the tax credit was originally earned;

    • (5) A transferee has only the rights to claim and use the tax credit which were available to the Production Company at the time of the transfer. To the extent that the Production Company did not have rights to claim or use the tax credit at the time of the transfer, the Virgin Islands Bureau of Internal Revenue shall either disallow the tax credit claimed by the transferee or recapture the tax credit from the transferee. The transferee’s recourse is against the Production Company; and

    • (6) The transferee must acquire the tax credits in this section for a minimum of 60 percent of the amount of the tax credits so transferred.

  • (b) Any Production Company claiming, transferring, or selling the tax credit shall reimburse the Government of the Virgin Islands for any department initiated audits relating to the tax credit, This subsection does not apply to routine lax audits of a taxpayer which may include the review of the tax credit provided in this subchapter.


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