2 71,vitg, VIRGIN ISLANDS Friday, December 7, 2018 3rd Circuit backs Gomez ruling in excise tax case By BRIAN O'CONNOR Daily News Start The Virgin Islands government has been dealt a setback in fixing a multimillion.dollar hole in the tern. tory% budget. Two judges with the 3rd US. Circuit Court of Appeals on Wednesday upheld a lower court's ruling preventing the terntonal government from collecting excise lax Oct COTIMItti• U.:anal grounds. U.S. Court of Appeals judges Thomas Ambit, and Thomas Vanaskit issued a ore-page memo dated Nov. 27 and published on Tuesday. Wining a Not 15 order by U.S. District Court Judge Curtis Gomez. No legal memorandum accompanies the order, making it hard to determine why Antbro and Vanaskie issued their ruling. The ruling is interlocuicty, meaning the case must still proceed to a final appeal Judgment on whether or not the VI government can collect excise LPL An excise tax is an indirect tax levied against manufactuters of goods. as opposed to a direct tax. usually levied against sellers or purchasers of certain goods. Comet's ruling, and a subsequent memo:and= opinion on the tax, ruled the government has been improperly collecting the tax for decades. React,, a company that installs efrigeratots, ice machines and other equipment on boats. argued hat because "boat pans" are camps from excise tax, their business hould be exempt. The tax usually generates more than S20 million of government revenues each year. according to Cuts Gcrnez foi suor of he 3rd U.S. etCUJI Court of Appeals has eadced a ruling by the U.S. Oistrct Coon blocking me territory from col. ecting exc.se tax levied against items like those awaeng deniers/ at the Crowley Shipping Tomas' on St. Thomas. 11 collected, excise and rade taxes are protected to generate $45.1 mullion for the territory m hug year 2019. court documents. The government had continued to collect the tax even after a Semen,. bcr ruling that it violated the U.S. Constitution's Commerce Clause. according to court documents. At one point during an evidentiary hear. Cornet asked why the govern. ment shouldn't be held in contempt. according to court documents. The Commerce Clause gives Congress alone the power to regulate commerce between the states. Officials had collected 539 million in excise tax for 2018 as of Nov IS, according to a Nov. 26 opinion Gomez wrote in support of his ruling The proposed fiscal year 2019 budget includes $45.1 million for trade and excise taxes. That's about 5.5 percent of all government tax revenues (S820 6 million), according to the budget. The ruling impacts not just Red. CO, but the territory's economy as whole, COCK/. wrote. Govern ant officials had not presented exact information about how the end of the excise tax would impact the government checkbook, Gomez wrote. "A functioning government is clearly in the public's interest, and a functioning government certainly requires morxy." he wrote. "The CVI has provided the court with no information regarding the amount of money it col loci. from rico: taKcc - A stay benefits specific segments of the public because government officials lave testified they plan to levy excise tax on local businesses. Gomez wrote. "The interest of imposers would favor not issuing a stay. as then interest is certainly in not paying a discriminatory excise tax: he said. - The interest of local manufacturers would favor issuing a slay. as tlxir interest would be not paying an excise lax" Discnmination against importers outweighs local economic interests. Gomez wrote. On appeal. Virgin Islands Attom," General Claude Walker. So. bettor General Pamela Tepper. and Assistant Attorney General Dionne Sinclair, argued that the government had previously been granted congressional authority to levy the tax against imports. The consequences of Ciomeis ruling are dire. they wrote. Cons:, "has effectively curtailed the government's ability to collect revenues. thrown the excise 1.1". S) Stem authonted by Congress into a state of chaos. created uncenairgy among taxpayers. ard instilled insecurity in local and federal officials whose daily room-ability x is to 3S1CSS and collect excise owes:' they wrote. The effect is particularly pron nennced because of the importation of materials for hurricane recovery, the lawyers wrote. Alex Golobesky. Reefeo 9 attorney. argued that while the govern. meta could easily bill companies if it was on appeal. and line or jail people ifthey didn't pay. the reverse isn't INC. "The ability of Recfco or other taxpayers to extract refunds from the government, even judicially awarded refunds. is notoriously difficult in the Virgin Islands." hc wrote. — Counter 8flan O'Connor at 340-714-9130 or emml hoconnol'.79. clailinews Setting the record straight An article on page 5 of The misidentified the phixos accompaDaily News on Tuesday about the nying the ankle. The photo was of upcoening murder mat of VI. Faa. one of the victims. VI. Police Oflice Officer Francis Williams Jr. ricer Kai Javois. WE ARE HERE TO HELP LET'S TALK TRASH! CALL (340) 690-8394 4OkS 7.0 • ;•.- c,--) 04re -.GE Since 1991 PROVIDING FAST, RELIABLE, AFFORDABLE SERVICE. WE ACCEPT CREDIT CARDS! 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