Governor Albert A. Bryan Jr threw his support behind the measure in a release issued from Government House Tuesday.
The governor said the internet sales tax is part of a broader, unified effort to grow revenue that includes passing a recreational marijuana law and another push at refinancing the territory's debt after the first attempt was rejected by the market in September. Funds made available through these efforts, Mr Bryan Jr argued, could be used to help undergird the Government Employees' Retirement System.
"The Remote Sales Tax bill that Senator Francis is proposing is similar to a bill proposed by Governor Bryan and is patterned after an Internet Sales Tax. The Governor and Senators currently are combining the two bills into legislation acceptable to both parties. Revenues from a Remote Sales Tax could be used to pays GERS’ unfunded mandate," said the Government House release.
One of the main themes of the internet sales tax bill is that it would encourage Virgin Islanders making purchases online to buy local. The argument, however, does not hold water because many of the items Virgin Islanders purchase online are not available locally. Furthermore, the limited amount of items available locally are in many instances overpriced.
An internet sales tax is not a new idea; most US states levy such taxes on their residents. And in 2017, the Kenneth E. Mapp administration included as part of its five-year economic growth plan an internet sales tax. At the time, then-Finance Commissioner Valdamier Collens said the tax would be 5 percent on items purchased, which he said would have generated about $3 to $5 million annually for the government.
The Mapp administration measure was originally part of a "Sin Tax" bill but was removed following swift community backlash. The internet sales tax was never reintroduced because Mr Mapp lost the 2018 gubernatorial race to Mr Bryan Jr.
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