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HomeNewsArchivesRichards, D.C. Officials Discuss Tax-Benefit Issues

Richards, D.C. Officials Discuss Tax-Benefit Issues

July 19, 2004 – Lt. Gov. Vargrave Richards met with federal officials of the administrative and legislative branches in Washington, D.C., on Friday to discuss possible changes in the territory's investment tax-benefits program.
The meeting with congressional personnel came as "House and Senate tax-writing committees began to organize for what is expected to be a lengthy conference on the international tax bill which contains a new objective test for determining who may qualify as a bona fide V.I. resident for tax purposes," a release issued on Monday from the Lieutenant Governor's Office stated.
"All in all, it was a very positive meeting," Richards said.
Richards also met with David Cohen, deputy assistant secretary of the Interior for insular affairs. "I had a very productive meeting with Secretary Cohen on coordinating our strategy to mitigate the concerns" of the tax-beneficiary community "raised by the recent IRS tax notice," he said.
The lieutenant governor's meetings followed earlier ones by V.I. government lawyers in the nation's capital. (See "‘Strong Position' Pledged on Tax-Incentives Program".)
According to the release, Richards explained the Economic Development Program to U.S. Senate staff and reaffirmed the Turnbull administration's commitment to "the integrity of the program and to ensuring full compliance with federal and local tax laws."
He also expressed support for a Senate provision on residency. The provision would, with certain exceptions, require that a person in order to claim residency for tax-benefit purposes be physically present in the territory for at least 183 days in any one year, or an average of 122 days a year over a three-year period.
"While I believe that an objective test included in the Senate bill can provide the tax certainty that investors require," Richards said, "I also indicated in my position that the Senate language needs some additional clarification in order to accomplish its intended purpose."
According to the release, Cohen reaffirmed his support for the V.I. Economic Development Program and the Interior Department's commitment to working with the U.S. Treasury Department "to develop fair and reasonable rules for determining the type of income which is eligible for … benefits under the U.S. Internal Revenue Code."
Richards added: "While many difficult technical issues remain to be resolved, we will go forward with the Interior at our side."

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