U.S. Virgin Islands – V.I. Attorney General Denise George announces the decision of the U.S. Third Circuit Court of Appeals in Reefco Services Inc. v. Government of the Virgin Islands Bureau of Internal Revenue, in which the GVI appealed the decision of the District Court of the Virgin Islands that enjoined the GVI from collecting excise taxes, thereby costing the GVI millions of dollars in revenues.
In the Third Circuit Court opinion issued today, the court upheld the District Court’s decision that enjoined the GVI from collecting its excise taxes because it was unconstitutionally assessed against importers, but not local manufacturers. However, the Court vacated the District Court’s order disapproving the GVI’s newly promulgated rules and regulations and directed the District Court to lift the injunction upon obtaining proof that the GVI assesses the excise tax on local manufacturers under the new rules and regulations.
The opinion states: “We, therefore, affirm the District Court’s declaratory and monetary relief ordered in its September 28th Judgment and Opinion. We also affirm the District Court’s November 26th Memorandum Opinion in part, as to its enjoining of the GVI from continuing to collect excise taxes from importers, but not local manufacturers. We vacate the District Court’s November 26th Order in so far as it requires court approval of promulgated rules and regulations by the GVI and remand for further proceedings as to whether the excise tax has been assessed against local manufacturers. Upon obtaining proof that the GVI is assessing the excise tax on local manufacturers, we direct the District Court to lift the injunction.”
AG George said, “This can work out quite well for the GVI in that it paves a way forward for us to start collecting excise taxes, hopefully in the near future It is important to note that Reefco has 14 days to petition for a rehearing. If no further action is filed in the Third Circuit, the decision becomes final in 30 days upon the Court’s issuance of a mandate.”
FOR IMMEDIATE RELEASE
October 7, 2020
Sandra Goomansingh
Media Relations Director
(340) 774-5666 ext. 10105
Email: sandra.goomansingh@doj.vi.gov