Gross Recepits Tax - listed on invoice?

I-Hops - was the tax added on top of the sales price OR did they provide a price and then broke out so much as product and so much as tax? If they treated it like "sales tax" and multipled the GR% times the price, then they underestimated the GR tax ... very slightly. The idea behind the GR was to hide the tax from customers .... so that in retail space the USVI remains "tax free" for visitors.

I just went back to the invoice to check what they had done. They added 8.5% of the sales price as Gross Receipts Tax!
This was just an initial quote. I'll wait until I see a revised estimate before I complain.

I would suggest you send a copy of that invoice to Licensing and Consumer Affairs [DLCA - Att: Wayne Biggs] and maybe the Chamber of Commerce [ Att: Richard Berry] and possibly ask the Attorney Generals office for an opinion.

I just went back to the invoice to check what they had done. They added 8.5% of the sales price as Gross Receipts Tax!
This was just an initial quote. I'll wait until I see a revised estimate before I complain.

Was it an invoice or a estimate? Until the invoice is paid, no violation.

First was a quote. Now I have an invoice for a product. I haven't committed to purchasing yet pending other factors.
8.5% seems unscrupulous.

Hand written invoice or computer generated? I made a error yesterday with my quick books billing sorftware. Entered the incorrect customer type and undercharged the hourly rate. The client noticed and pointed out my error.

If I were in your shoes, I'd just bring it to attention of the vendor before going to the BB,, Consumer Affairs and the Attyn General... See what they say.....

The GR is 5% of the final sales price that must be paid to the VI-BIR.

http://www.viirb.com/

If I were in your shoes, I'd just bring it to attention of the vendor before going to the BB,, Consumer Affairs and the Attyn General... See what they say.....

I have to agree with blu on this one and I hope you'll go this route first. It doesn't make much sense to me that a business would try to pull a "scam" in this way. My guess is that maybe the person preparing the quote and invoice is working with some software that they are not familiar with and entering some numbers in the wrong fields? Please report back with an explanation if you get one.

Tha only tax that can be added and shown is the hotel room tax. Other than that it is hidden. If they want to let you know why it is such a precentage higher because of the gross receipts they can, but not show it as an add. Very unprofessional.

I'm confused here.

Why would showing the Gross Receipts Tax on the invoice be an issue, unless it was the incorrect or higher percentage? We all know its there. We all pay it. What makes it any different from a sales or value added tax, since thats what it really is? Can anyone point to any statute in the VI Code that specifically prohibits listing the GR tax as a line item on an invoice?

Personally, I think every company should be listing the GR Tax on invoices and receipts and also have every right to include a WAPA surcharge too.

Who but the government benefits from hiding it anyway?

Who but the government benefits from hiding it anyway?

If everybody A) includes the GR tax in their prices, or everybody B) excludes the GR tax from their prices but adds it afterwards, then every business is on equal footing. But if some do A and some do B, then B has the advantage of appearing to have lower prices, and it makes it harder for consumers to compare prices.

This ignores businesses who should pay the GR tax but don't, and apparently there are lots of those.

A store lists the price for an item at say $10.00 excluding the GR tax which is 5%. If they then add on $0.50 that brings the total to $10.50. However, GR to be paid to BIR is 5% of the total. 5% x $10.50 = $0.525 .... to be exact. This might be splitting hairs some, but it will get confusing.

The big deal with GR is that it is "supposed" to be embedded, so the outside customers (tourists) think that the USVI is a "Tax Free" destination. They really want the stores to list the price at $10.50 for example. The problem that has occurred is that when stores establish price sheets / books or even a hotel for example takes a long range reservation and in between that time and when a visit occurs, the gov.t increases the GR and someone has to eat the difference ... and it won't be the gov.t.

If it looks like a duck, quacks like a duck, walks like a duck ... then it must be a duck. I say get ride of GR and go with a sales tax and be done with it.

Gross receipts tax is exempt on the first $9000 per month. So here is a business trying to bill me 8.5% when they may only have to pay 5.25% (as noted above 5% gross requires a 5.25% rate) or nothing depending on their actual earnings, or exemption (EDC, fisheries, etc.)

I've addressed this with one of the principals of the business and will re-post when I receive a response.

If the business is tiny (yearly gross receipts of less than $225,000), then they pay the 5% GR tax on all receipts in excess of $9,000 per month. Otherwise, they pay 5% GR tax on the whole thing. It sounds like this business is not tiny, since it has more than one principal.

I feel like there is a freedom of speech issue here. If I want to list my prices as $10.50 inclusive of all taxes or $10.00 plus 5% gross receipts tax I should be free to do so. As long as I list my prices honestly and truthfully what right does the government have to determine how I express those prices?

All that aside I've been told that it is against the law here to break GRT out of your prices. I wonder how this would standup to a court challenge though.

Sean

In an earlier post I asked if anyone could point to a law in the VI Code that forbids breaking out the GRT as a line item on invoices.

I might do the research myself just for fun.

Here's the link if anyone has the time to investigate and post results...

http://www.michie.com/virginislands/lpext.dll?f=templates&fn=main-h.htm&cp=

Found it...

TITLE THIRTY-THREE Taxation and Finance
Subtitle 1 Miscellaneous Internal Revenue Taxes
PART I. Normal Taxes And Surtaxes
Chapter 3. Miscellaneous Excise Taxes; Gross Receipts Taxes; Wharfage and Docking, etc., Fees

(e) Except as provided by the provisions of Title 11, Chapter 25, Virgin Islands Code, it shall be unlawful for anyone who is required by subsection (a) of this section to pay a gross receipts tax to state separately the gross receipts tax or any portion thereof on any bill or invoice to any customer or client.

There you go...can't list GRT as a line item on invoices.