Living in USVI while working for US company

You could pretend to live in the states while actually living in the USVI. There are expats living abroad (and probably some in the USVI) who maintain stateside phone numbers, mailing addresses, bank accounts, etc.

...One question I haven't seen covered is working for a US based company while living in the USVI. I've pinged some folks at my company and was told by HR that they aren't authorized to do business in the USVI and couldn't actually pay someone who lived there...

The USVI is part of the U.S., so it sounds like your HR people are just too lazy to figure things out. My spouse works for a "Fortune 5" company, and the only real "issue" has been that stateside employees can't call phone numbers with a 340 area code, so the company pays for us to have a cell phone with a stateside area code (that we purchased in the VI) for business. Also, interoffice mail occasionally ends up in NC of all places, and folks there forward it. This company doesn't "do business" in the VI either, but it's a U.S. company, so there are no import/export problems with the work my spouse does here. HR has figured out how to withhold taxes and pay them to the VI, and our health insurance options are less robust than they would be stateside, but otherwise telecommuting for the past sixteen years has been great!.:D

I worked in the caribbean for a US company. HDQTRS didn't know so my local office just told me to go work remotely for a year and they knew where I was going. I had a Vonage line which was a local call for them. Everything stayed the same except I never came into office and I was actually out of the USA for a long while. I still had to pay all the state taxes tho.

...One question I haven't seen covered is working for a US based company while living in the USVI. I've pinged some folks at my company and was told by HR that they aren't authorized to do business in the USVI and couldn't actually pay someone who lived there...

The USVI is part of the U.S., so it sounds like your HR people are just too lazy to figure things out. My spouse works for a "Fortune 5" company, and the only real "issue" has been that stateside employees can't call phone numbers with a 340 area code, so the company pays for us to have a cell phone with a stateside area code (that we purchased in the VI) for business. Also, interoffice mail occasionally ends up in NC of all places, and folks there forward it. This company doesn't "do business" in the VI either, but it's a U.S. company, so there are no import/export problems with the work my spouse does here. HR has figured out how to withhold taxes and pay them to the VI, and our health insurance options are less robust than they would be stateside, but otherwise telecommuting for the past sixteen years has been great!.:D

Thank you very much. I actually suspect that HR is being somewhat lazy in this case as well. I would really rather not have to deal with a fake stateside address and its tax implications (though i could live with it). I'm going to push harder and find some real people to talk to. The company is a Fortune 500 company with offices all over the world. My boss and my vp are all for it. Now its time(for the next 3 years) to get HR lined up. I don't suppose you could let me know(pm perhaps) what company is already doing this? Also what did you mean about health insurance options being less robust?

Thanks for all the responses.

I won't share the company, but "Fortune 5" was not a typo. By less robust I mean that we do not have a choice of health care options. Because of our location, only one of the options available to folks in my spouse's research lab is available to us, and it is the most expensive option with the stingiest benefits. This is one of many reasons why we opted to come here during middle age, while we are still healthy and don't make much use of our insurance. This is not a place where I would retire, because local medical options and standards are unsatisfactory to me. Your mileage may vary.

Edited to add that you don't want to go the "fake stateside address" route. The first year we filed locally the IRS audited us. Our tax liability is apparently substantial enough that it was worth it to the IRS to check up on us to see if we were really VI residents. They sent an auditor from Puerto Rico, and we had to fill out reams of forms with questions about religious organizations to which we might belong, and social clubs, and they wanted to see our son's school records -- all sorts of personal stuff. Back in the day the library here used to require several personal references from locals before you could borrow books, and I thought that was obnoxious, but the IRS is in a class by itself, and the penalties if you get caught aren't worth it.

Edited to add that you don't want to go the "fake stateside address" route. The first year we filed locally the IRS audited us. Our tax liability is apparently substantial enough that it was worth it to the IRS to check up on us to see if we were really VI residents. They sent an auditor from Puerto Rico, and we had to fill out reams of forms with questions about religious organizations to which we might belong, and social clubs, and they wanted to see our son's school records -- all sorts of personal stuff. Back in the day the library here used to require several personal references from locals before you could borrow books, and I thought that was obnoxious, but the IRS is in a class by itself, and the penalties if you get caught aren't worth it.

Interesting, and thanks for the insights dntw8up. I've dealt with the IRS before, especially after my father's death. They took everything when he died. He had a long history of cheating the IRS - hell, he owned more than a dozen businesses in his life, and I have the record from the IRS that he never claimed more than $36k in yearly earnings. One business he owned for more than a decade that I am sure anyone who has been to St. John has been to didn't even show up on the records.

At least my mother got to take an early retirement (60) on my father's SS (widow benefit) and at 65 she will take her retirement which is substantially higher. BTW, note that it is a small loop hole.

I am surprised at the amount of personal information the IRS was asking for. To me, requiring answers to these questions you pose, would be unconstitutional to me (religious questions particularly.)

I'm no fan of the IRS, but I would think if someone used a religious exemption, it would open up that line of questioning in an audit.

If you plan to file taxes in the USVI on all your world wide income then you need to file a Form 8868 with the IRS. If you file joint returns your spouse will also need to file an 8868.

I understood the original poster to be saying that the auditors were trying to determine where he/she really lived by asking questions about organizations they belonged to at their home of record, including, but not for religious reasons, churches.

Linda J is correct. We don't have a religion, or belong to any social clubs, or send our kid to school, or any of the other myriad of evidence the IRS wanted as proof that we are residents of STT. Voter registration, auto registration, home ownership, and auto and home insurance were not sufficient proof.

A little more research with a few other companies suggest that if you work for a US company and live IN the USVI then that US company has to file corporate tax returns there and register and file for payroll reporting. They are doing initial research but I wonder if the company spoken of above is simply large enough that it has already done that and hence doing so wasn't an additional problem.

More details as I find them in my quest!

A little more research with a few other companies suggest that if you work for a US company and live IN the USVI then that US company has to file corporate tax returns there and register and file for payroll reporting. They are doing initial research but I wonder if the company spoken of above is simply large enough that it has already done that and hence doing so wasn't an additional problem.

More details as I find them in my quest!

I don't see what the difference between you living in Philly, working in NYC (albeit remotely) and/or you living in USVI and working in any mainland state (albeit remotely).

Just keep a PO Box in whichever state your employer is in. If you work for a Fortune 500 just get a PO Box in the zip code you live in now.

Although I didn't physically reside in NYC and my employer wasn't in NYC, NY state didn't care and they wanted their state tax and NYC city tax from the years I worked abroad.

I guess in that case I could eat the state tax. I just want to be sure it's legal.
And i don't mind eating the state tax really. Considering no sales tax thats 10% raise already.
And before folks talk about cost of living, we just came down for a PMV. Your prices didn't scare us. We currently live in San Jose CA.
We saw nearly no difference in most things. Many things were cheaper. Electric, housing, food shopping etc.

Your prices didn't scare us. We currently live in San Jose CA.
We saw nearly no difference in most things. Many things were cheaper. Electric, housing, food shopping etc.

Just goes to show that smart people are not always smart. If your electric & food is higher then ours that just pathetic. Housing I could understand, the rest does not make sense.

I don't see what the difference between you living in Philly, working in NYC (albeit remotely) and/or you living in USVI and working in any mainland state (albeit remotely).

Just keep a PO Box in whichever state your employer is in. If you work for a Fortune 500 just get a PO Box in the zip code you live in now.

Although I didn't physically reside in NYC and my employer wasn't in NYC, NY state didn't care and they wanted their state tax and NYC city tax from the years I worked abroad.

I think this is going to be a federal tax issue, not a state one. USVI residents pay what would be their federal tax burden to the VI government.

A kilowatt-hour (kWh) of electricity cost San Francisco area consumers $0.226 in June 2011, 1.8
percent more than one year earlier. Nationwide, electricity prices averaged $0.134 in June 2011,
compared to $0.132 the previous year. For the past five years, electricity prices in the San Francisco area
have been consistently above the national average and ranged from at least 30 percent to over 80 percent

A kilowatt-hour (kWh) of electricity cost Philadelphia consumers $0.163 in May 2011, little changed
from one year earlier. (See table 1.) Nationwide, electricity prices averaged $0.129 in May 2011,
increasing 1.6 percent from last year. Electricity prices have generally trended upward over the last five
years, advancing 20.7 percent locally and 17.3 percent nationally since May 2006. (See chart 1.)

I don't see what the difference between you living in Philly, working in NYC (albeit remotely) and/or you living in USVI and working in any mainland state (albeit remotely).

Just keep a PO Box in whichever state your employer is in. If you work for a Fortune 500 just get a PO Box in the zip code you live in now.

Although I didn't physically reside in NYC and my employer wasn't in NYC, NY state didn't care and they wanted their state tax and NYC city tax from the years I worked abroad.

I think this is going to be a federal tax issue, not a state one. USVI residents pay what would be their federal tax burden to the VI government.

I think the easiest method would be to "work from home" and keep his current residence as his "home" and just be perpetually "on the road". Maybe he should consult a tax attorney and report back to us with his findings.

I would definitely consult a tax attorney. There is a fine line between tax avoidance and tax evasion.

Hi Quirion
Your comment about cost of living being higher in San Jose caught my eye. I know that area as I grew up in Campbell. You have part of it correct, the cost of housing in San Jose (silicon valley) is much higher than on St Croix. Even after the real estate crash, simple middle class homes in Santa Clara county sell for $600,000 +, which is down from $800,000 before the crash. Remember too that silicon valley housing is about the highest in the nation.

Electric rates are higher on St Croix. Bombi quoted some electric costs that show that St Croix has a base rate 25% higher than silicon valley. He did point out that San Jose electric rates were two time the national average. WAPA has rates that will make your head (and meter) spin. Most people here compensate by conserving. They do not run air conditioners unless necessary and find other ways to cut the monthly bill. So, yes your monthly bill might be less than in a big home in silicon valley.

Food is another thing. Commodity food items such as milk and bread are higher on St Croix because they require more transportation and processing. Many food items are just not available. High end (boutique foods) are much more here too. Cosentino's in Campbell use to sell some fancy stuff for high prices, but you will pay 40% more in the Virgin Islands.

Good luck with your move...

So I spoke with a tax attorney. He finds it just as ridiculous as some of the folks in this thread that the company is being unreasonable and lazy.
That, in fact, the payroll company itself is who handles this. He advised me to talk to the payroll company to find out exactly what is involved and then to sit down armed with that information and have a detailed meeting with HR to understand their concerns. Even if that doesn't come to pass it's legal (taxwise) to be intending to come back(which i am after some years) and maintain a residence in the US and simply pay those.
I'll be verifying that last bit with my accountant as well. So all looks good. Now time to play hardware with HR!

Thanks for the advice folks!
See you the next few years for vacations(and full time in 3-4!)

Good Luck!

Your prices didn't scare us. We currently live in San Jose CA.
We saw nearly no difference in most things. Many things were cheaper. Electric, housing, food shopping etc.

Just goes to show that smart people are not always smart. If your electric & food is higher then ours that just pathetic. Housing I could understand, the rest does not make sense.

I live in CA too, and prices for merchandise are similar, if not cheaper. Most groceries are the same, except for some produce and fresh meat. Meat prices on STX are outrageous! I plan to grow/catch my own for the most part. Electric is FAR higher in STX too. My city generates their own and is not part of So Cal Edison, so we get a very good deal on electric. Not looking forward to losing that. But, the no sales tax really does add up... CA is a very expensive place to live, no doubt. Gas is near $4/gallon, or over even, usually. Gas and taxes eat you alive here, that and the commuting. I'm just "over" CA. Looking forward to VI.

You are right Hiya. CA is just pathetic, in more ways than you can ever know.

If we are self employed as a consultant and become full time residents of USVI...when my husband contracts, its usually for a year. My questions are these..working remotely self employed contracted for a mainland Co, with possible onsite travel...how do taxes work?
Second question if contract required him to be onsite for duration of contract vs remote, but our primary home is USVI where I remained...how do taxes work...its his self employed job to do as a client requires. A contract can be up to 12 months...
Will we always pay our taxes to USVI if only remote or would it follow him per contract requirment if onsite?

If we are self employed as a consultant and become full time residents of USVI...when my husband contracts, its usually for a year. My questions are these..working remotely self employed contracted for a mainland Co, with possible onsite travel...how do taxes work?
Second question if contract required him to be onsite for duration of contract vs remote, but our primary home is USVI where I remained...how do taxes work...its his self employed job to do as a client requires. A contract can be up to 12 months...
Will we always pay our taxes to USVI if only remote or would it follow him per contract requirment if onsite?

I'd contact an accountant to get proper information.