March 11, 2003 – In spite of stern words of warning from a federal judge, the V.I. government's commercial property tax bills for 2001 will soon be in the mail.
Lt. Gov. Vargrave Richards announced on Tuesday that, empowered by a law passed by the Legislature in a Feb. 12 special session called by Gov. Charles W. Turnbull last month and signed by the governor on Feb. 27, the tax assessor "has released all commercial real property tax bills for 2001, with the exception of those in litigation."
The new law provides that taxes for 2001 through 2004 be assessed on the basis of 1999 appraisals. The Tax Assessor's Office falls within the Office of Lieutenant Governor.
"It's important for the business community to receive the bills so that commercial transactions can move forward," Richards said in a release. "Obviously, it is also important for the government to receive the revenues."
Richards also said that all residential property tax bills for 2002 have "been released."
In recent years a number of commercial property owners have taken the V.I. government to court, challenging the assessing of taxes based on replacement value rather than market value of properties. In the benchmark case, the V.I. government and owners of two St. Thomas firms, Byrne Corp. and 21 Queens Quarter, agreed on a settlement in December of 2000.
The agreement called for the District Court to appoint a "special master" to oversee a major overhaul of the Office of Tax Collector, including changing the way commercial properties are appraised for tax purposes. Tax Assessor Roy Martin has said he does not have the budget necessary to put the indicated changes into effect.
There have been several subsequent court challenges of 2000 tax assessments by individual commercial property owners. One was brought by Equivest St. Thomas, owner of Bluebeard's Castle, Bluebeard's Beach Club and Elysian Beach Resort. Equivest is one of the plaintiffs who won a District Court injunction last June preventing the V.I. government from issuing any further tax bills until their case is settled.
The Equivest case was the subject of an appeal by the V.I. government claiming the federal court lack jurisdiction. A 3rd Circuit Court of Appeals panel of judges disagreed on Feb. 28, sending the case back to District Court.
Meanwhile a total of 11 property owners have mounted a collective challenge that is currently also being heard in District Court, also of the 2000 assessments.
District Judge Thomas K. Moore, who is hearing the various cases, asked the V.I. government to delay issuing new tax bills and not to penalize taxpayers when the bills were issued late.
Faced with falling revenues, Turnbull sent his bill to the Legislature rolling back the 2002 assessment rate to that of 1999, which would be prior to the first legal challenge.
At a Feb. 19 hearing in the collective litigants' case, Moore chastised the governor for signing his bill into law. The judge said the governor was wasting the time of the Legislature and that the time would be better spent correcting the tax assessment system.
When attorney Chad Messier, who is representing Equivest, learned Tuesday of the lieutenant governor's announcement that tax bills were going out, he commented: "I think that pegging the basis of the assessments to 1999 is not fixing the problem of the tax bills."
Messier said a ruling on the consolidated portion of the case representing all 11 plaintiffs and 45 properties is expected at any time.
Attorney Jim Derr filed a motion asking the court to bar the government from issuing tax bills. He called the release of the 2002 bills an attempt by the government to collect as much money as possible before the judge issues a ruling. If the ruling goes against the government, the taxpayers would be left in a position of having to apply for refunds.
Messier's view, however, is that the V.I. government was within its rights to send out the commercial tax bills, and he said that those taxpayers who have no objections could go ahead and pay their taxes. "It does give people the opportunity, if they think their tax bills are fair, to pay them," he said.
However, he added, those who find themselves dissatisfied with the method of assessment, are free to join the list of plaintiffs suing the government over the fairness of their tax bills.
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