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VI Property Taxes Still Up in the Air

AARP members recently filled the Chief District Court gallery on St. Thomas hoping to get a status report on the ongoing Virgin Islands property tax saga. Property tax bills have not been issued in the territory since 2006, due to numerous filed complaints on the property revaluation process. As a result of a mass AARP email alert informing them about the hearing, AARP members gathered to get an update on the issue.

The property tax issue has loomed over the territory while government and private sector attorneys argue over details associated with reassessing home and commercial property values.

Although this hearing was a status conference to determine where things stand, AARP members, particularly those from the island of St. John, felt it was important to demonstrate that homeowners are following the issue closely. This was the first hearing since last year when the VI Government was found in contempt of court for sending out tax bills at the newly assessed rates.

Unfortunately, when all was said and done, few decisions were made and no clear plan was revealed. Instead, the hearing demonstrated that there were a lot more concerns to resolve before decisions could be rendered.

This issue first began when a commercial property owner took the government to court to establish a fair and equitable tax system. The owner won that case in 2003 and the courts decided that the only fair land value had been determined in 1998. Hence, the court froze property taxes at the 1998 rate until two things were accomplished: 1) reassessment of values and 2) establishment of a functioning Board of Tax Review. The government has been working since 2003 to achieve these two goals.

Last summer, the government felt it met these requirements and before receiving a court approval to proceed, bills were issued to homeowners. The government was soon after held in contempt of the original order that had not been lifted. The government appealed the contempt order to the appellate court.

The Government felt that the appellate court’s postponement to enforce the contempt order was equal to permission to collect property taxes. Thus the government forwarded tax bills to homeowners a second time in May of 2009. The courts responded by issuing yet another contempt of court order. The government is currently in the process of rescinding the second set of bills.

The government demonstrated that the Board of Tax Review established last year appears to now be functioning properly. But many issues remain unresolved. At the top of that list are questions about the process used to reevaluate property. St. John residents have raised serious concerns even though the court appointed a “special master” who reviewed the process and deemed it appropriate. Additional issues include whether the government must pay the plaintiff’s legal fees and whether the government needs to pay into the contempt fund.

The next session will be a full hearing on the issue. The date has not yet been set. AARP and its members will be monitoring this issue closely.

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