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Charlotte Amalie
Wednesday, July 24, 2024
HomeNewsArchivesLocal Firms Updated on Supplying Tax Beneficiaries

Local Firms Updated on Supplying Tax Beneficiaries

Aug. 20, 2004 – Small business owners got an update on changes in the rules and regulations of the territory's Economic Development Program as well as a chance to network with beneficiaries and share concerns on Friday at a conference government officials put together for eligible suppliers.
More than 350 small businesses participate in the Economic Development Commission's Eligible Supplier Program. About 80 were represented at the conference, held at Palms Court Harborview Hotel on St. Thomas.
EDC beneficiaries are provided a list of the businesses in the program, and they are to be given priority when the EDC companies choose suppliers for products and services.
By law, companies receiving the EDC tax benefits must use local suppliers unless a needed service or product cannot be obtained in the territory. They also must choose among the eligible suppliers when seeking bids for a particular service or product.
Nadine Marchena is assistant chief executive officer of the Economic Development Authority, which oversees the EDC. She explained that in order to be eligible for the supplier program, a purveyor of products or services must be licensed and set up to do business in the territory, pay taxes in the territory, and have been in business for at least a year.
Most of the supplier businesses do not receive EDC tax benefits themselves. Marchena said two beneficiaries are currently part of the program.
She said the purpose of the conference was to provide "information to the small businesses that will help them grow and extend relationships with the beneficiaries."
Participants were told of the following changes in the EDC program rules and regulations:
– Procurements exceeding $20,000 must be published in local media and put to bid. Previously these requirements applied to any procurement worth $10,000 or more.
– EDC beneficiaries must contact all eligible suppliers providing the needed goods or service for bidding through direct solicitation.
– Failure to report bids will result in a fine of $1,000 or 1 percent of the contract, whichever is greater.
– Failure to use a local supplier for available products and services will result in a $5,000 fine.
– An improper award of bid will result in a $2,500 fine.
"We want to make sure that the revenues stay here," Margarita Benjamin, EDA director of compliance, said.
Joseph Hodge, owner of Apex Construction, said he is "frustrated with companies who have not been here long and get tax benefits, and companies like myself who have been here long cannot receive benefits."
The EDC program does not create a "level playing field," he said.
Carolyn Henry, EDA senior loan officer, described loan programs available to the suppliers. "We want to make sure that small businesses stay in business," she said.
Marchena also described the EDA's Enterprise Zone program, which provides tax credits to individuals who establish businesses in designated zones. Among the zones on St. Thomas are downtown areas of Upstreet, Downstreet, Savan, Rothschild Francis "Market" Square and Garden Street.
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