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BILL NO. 36-_______ THIRTY-SIXTH LEGISLATURE OF THE VIRGIN ISLANDS OF THE UNITED STATES OF AMERICA REGULAR SESSION 2025 The bill is to amend Title 33 of the Virgin Islands Code to reduce gross receipts and income taxes 1 for marine charter operators and yacht sales companies; to exempt qualifying yacht sales from 2 gross receipts tax; and to establish a ten-year incentive program to recapture the marine charter 3 and yacht brokerage market in the U.S. Virgin Islands. 4 The bill is to amend Title 25 of the Virgin Islands Code to modernize and streamline boating laws, 5 commercial registration, and general compliance in the U.S. Virgin Islands 6 The bill is to amend Title 29 of the Virgin Islands Code to extend Economic Development 7 Commission (EDC) benefits to businesses classified as marine attractions, marine services, and 8 boat building and repair facilities. 9 The bill is to amend Title 12 of the Virgin Islands Code to modernize the Costal Zone Management 10 (CZM) process and expedite approvals of marine attractions, marine services, and boat building 11 and repair facilities. 12 13 PROPOSED BY THE GOVERNOR 14 WHEREAS, the United States Virgin Islands has historically been a world-class destination for 15 charter yachts and yacht sales, contributing significantly to the Territory’s economy through 16 tourism, marine services, and local employment; 17 Formatted: Font: (Default) Times New Roman Marine Charter Business Revitalization Act of 2025 WHEREAS, excessive charter fees imposed by the British Virgin Islands on foreign based vessels, 18 including United States Virgin Islands’ home-based fleets, have driven a sharp decline in local 19 charter business for the upcoming 2025-2026 Tourist Season and yacht sales activity in the 20 Territory; 21 WHEREAS, there is an urgent need to implement competitive and long-term tax incentives to 22 attract charter yacht operators, marine service businesses, marine attractions, and yacht brokerage 23 firms to domicile their operations in the United States Virgin Islands and to base their fleets and 24 sales infrastructure in the Territory; 25 WHEREAS, updating, modernizing, and streaming regulatory structures governing the CZM 26 process and boating laws will increase private investment the Blue Economy and ensure adequate 27 regulatory compliance without hindering needed development; 28 WHEREAS, constructing a world-class vessel haul out and repair facility is critical in positioning 29 the U.S. Virgin Islands as a yachting hub; 30 WHEREAS, revitalizing the charter and yacht sales sectors will generate year-round economic 31 impact through provisioning, maintenance, bookings, accommodations and other tourism-related 32 activity, leading to increased employment and entrepreneurial opportunities for Virgin Islanders; 33 WHEREAS, these measures are essential for the Territory to recapture market share and reclaim 34 its leadership in the Caribbean marine economy; Now, Therefore 35 Be it enacted by the Legislature of the Virgin Islands: 36 SECTION 1. Short Title 37 This Act shall be known as the “Marine Charter Business Revitalization Act of 2025”. 38 39 Deleted: and Formatted: Font: Bold Deleted: ¶ Marine Charter Business Revitalization Act of 2025 SECTION 2. Gross Receipts Tax Relief Title 33 Virgin Islands Code Section 43 is amended by 42 adding a new subsection (g) to read: 43 “(g) Notwithstanding any other provision of this section, the gross receipts tax for any 44 business primarily engaged in marine day sails, term charters or yacht sales originating in 45 the United States Virgin Islands shall be: 46 (1) Two and one-half percent (2.5%) for marine related activities to include commercial 47 fishing, rental of watersports equipment, boat rental, yacht brokerage service, SCUBA 48 diving school and related services, boat building and repair, naval architecture – marine 49 engineering, marine help services, marine salvage and related underwater services, marine 50 surveyor and consultant, and marine towing for a period of ten (10) years from the effective 51 date of this Act, with an option to renew for an additional ten (10) years upon recertification 52 by the Virgin Islands Economic Development Authority; and 53 (2) Zero percent (0%) for all yacht sales conducted by licensed yacht sales company 54 domiciled in the United States Virgin Islands. 55 (3) Zero percent (0%) for all boat charters conducted in the United States Virgin Islands.” 56 57 SECTION 3. Income Tax Relief Title 33, Subtitle 1, Part 1 is amended by inserting “Chapter 8, 58 Marine Charter & Yacht Sales Tax and adding a new section XXX to read as follows: 59 § XXX. Reduced Income Tax for Marine Charter and Yacht Sales Operators 60 (a) A taxpayer whose primary business activity is marine charter services, including day sails and 61 term charters originating in the United States Virgin Islands, shall receive a fifty percent (50%) 62 reduction in income tax liability on all income derived from charter operations for a period of ten 63 (10) years from the effective date of this Act. 64 Deleted: charter Deleted: ” Formatted: Font: Bold Marine Charter Business Revitalization Act of 2025 (b) A taxpayer engaged in yacht sale, licensed and domiciled in the United States Virgin Islands, 67 shall be entitled to: 68 (1) A ninety percent (90%) exemption on taxable income related to the sale of yachts in the 69 United States Virgin Islands and 70 (2) A fifty percent (50%) reduction in income tax liability related to ancillary yacht sales 71 operations.” 72 73 SECTION 4. Duty and Excise Tax Relief Title 33 Virgin Islands Code Section 42 is amended by 74 adding a new subsection (14) within subsection (e) to read: 75 “(14) Notwithstanding any other provision of this section, the excise tax on all articles, 76 goods, merchandise or commodities manufactured in or brought into the Virgin Islands for 77 the purposes of boat charters, commercial fishing, rental of watersports equipment, boat 78 rental, yacht brokerage service, SCUBA diving school and related services, boat building 79 and repair, naval architecture – marine engineering, marine help services, marine salvage 80 and related underwater services, marine surveyor and consultant, and marine towing shall 81 be zero percent (0%). 82 83 SECTION 5. Incentivizing Investment in Marine Infrastructurethe Marine Industry and 84 Marine Attractions Title 29 Virgin Islands Code Section 708 (a) is amended by inserting 85 “Marinas, Haul-out, Dry Dock, Boat Building and Repair Facilities” within “Category II” 86 Title 29 Virgin Islands Code Section 708 (a) is amended by inserting “Marine Attractions, Marine 87 Services, Charter Yacht Companies, and Yacht Brokerages” within “Category IV” 88 Formatted: Highlight Commented [KJ1]: MKJ: Not sure what would fall under "ancillary yacht sales operations. Formatted: Font: (Default) Times New Roman Formatted: Font: (Default) Times New Roman Formatted: Font: (Default) Times New Roman Formatted: Font: Not Bold, Underline Formatted: Font: (Default) Times New Roman Marine Charter Business Revitalization Act of 2025 The Government of the U.S. Virgin Islands is committed to seeking a qualified developer and 89 private investment to construct a a region-leading haul out and repair facility. 90 91 SECTION 6. Fuel Concessions Title XX Virgin Islands Code is amended to provide a 50% fuel 92 concession to fuel taken on at marine facilities in the U.S. Virgin Islands. 93 94 SECTION 7. Improving Marine Technical Training and Services The University of the Virgin 95 Islands (UVI) is encouraged to develop a certificate level curriculum covering all aspects of marine 96 maintenance and service. Supported by [xxx funds] this program will develop the local workforce 97 needed to service our growing maritime industry. 98 99 SECTION 8. Streamlining Business Licenses and Vessel Registrations Title 27 Virgin Islands 100 Code section 301(a)(2) is amended by inserting: 101 “Notwithstanding any other provision, “Boat Charter Services are considered properly 102 licensed to conduct business in the U.S. Virgin Islands with a USVI Commercial Vessel 103 Registration provided by the Department of Parks and Natural Resources (DPNR).” 104 Title 27 Virgin Islands Code section 302(a) is amended by inserting: 105 “Marine Attraction $100” 106 “Boat charter service per boat $0” 107 Title 27 Virgin Islands Code section 302 is amended by inserting: 108 “(i) Notwithstanding any other provision, Boat Charter Services are considered properly 109 licensed to conduct business in the U.S. Virgin Islands with a USVI Commercial Vessel 110 Registration provided by the Department of Parks and Natural Resources (DPNR). A 111 Formatted: Font: Not Bold Formatted: Highlight Commented [KJ2]: Not sure the proper citation here or mechanism. Formatted: Font: (Default) Times New Roman Formatted: Font: Not Bold Formatted: Justified, Line spacing: Double Formatted: Font: (Default) Times New Roman Formatted: Font: (Default) Times New Roman Formatted: Font: (Default) Times New Roman, Highlight Formatted: Font: (Default) Times New Roman Formatted: Font: (Default) Times New Roman, Bold Formatted: Font: (Default) Times New Roman Formatted: Font: (Default) Times New Roman Marine Charter Business Revitalization Act of 2025 business license from the Department of Consumer and Licensing Affairs (DLCA) is not 112 required.” 113 Title 25 Virgin Islands Code chapter 15 is amended by striking Schedule II and replacing with the 114 below schedule: 115 FEE SCHEDULE BY CLASS OF VESSEL CLASS TYPE LENGTH Fee (Previous) Fee (New) CLASS A Non- commercial Less than 16' 25 25 CLASS A Commercial Less than 16' 37.5 45 CLASS I Non- commercial 16' to less than 26' 50 50 CLASS I Commercial 16' to less than 26' 75 175 CLASS II Non- commercial 26' to less than 40' 100 100 CLASS II Commercial 26' to less than 40' 150 300 CLASS III Non- commercial 40' to less than 65' 150 150 CLASS III Commercial 40' to less than 65' 225 500 CLASS IV Non- commercial 65' to less than 80' 200 200 CLASS IV Commercial 65' to less than 80' 300 600 CLASS V Non- commercial Greater than 80' N/A 300 CLASS V Commercial Greater than 80' N/A 700 116 The Department of Parks and Natural Resources (DPNR) is instructed to accept a current Flag 117 State Registration (if foreign flagged) or USCG Documentation (if U.S. flagged) as proof of 118 ownership in lieu of a notarized bill of sale. 119 120 Formatted: Indent: Left: 0" Formatted: Font: (Default) Times New Roman Formatted: Font: (Default) Times New Roman Commented [KJ3]: Would like to discuss further what numbers make sense here. The goal is to incorporate previous disparate license fees into a new, singular fee. Formatted: Font: (Default) Times New Roman Formatted: Font: (Default) Times New Roman Formatted: Font: (Default) Times New Roman Formatted: Font: (Default) Times New Roman Formatted: Font: (Default) Times New Roman Formatted: Font: (Default) Times New Roman Formatted: Font: (Default) Times New Roman Formatted: Font: (Default) Times New Roman Formatted: Font: (Default) Times New Roman Formatted: Font: (Default) Times New Roman Formatted: Font: (Default) Times New Roman Formatted: Font: (Default) Times New Roman Formatted: Font: (Default) Times New Roman Formatted: Indent: Left: 0" Formatted: Font: Not Bold, Underline Marine Charter Business Revitalization Act of 2025 SECTION 9. Streamlining and Expediting CZM Processes and Approvals for Marine 121 Attractions and Marine Infrastructure Title 12 Virgin Islands Code section 910 (c)(2)(C) is 122 amended by striking “less than seventy-five thousand dollars ($75,000)” and inserting “less than 123 five hundred thousand dollars ($500,000) 124 Title 12 Virgin Islands Code section 910 (c)(2)(D) is amended by striking “less than sixty-six 125 thousand dollars ($66,000)” and inserting “less than five hundred thousand dollars ($500,000) 126 Title 12 Virgin Islands Code section 910 (c)(2)(B) is amended by striking “less than fifty-two 127 thousand ($52,000)” and inserting “less than five hundred thousand dollars ($500,000) 128 Title 12 Virgin Islands Code section 910 is amended by inserting: 129 “(h) Notwithstanding any other provision of this chapter, CZM is instructed to facilitate 130 and expedite permits and approvals of marine attractions, marine infrastructure, and 131 marine-related businesses.” 132 Title 12 Virgin Islands Code section 910 is amended by inserting: 133 “(i) Notwithstanding any other provision of this chapter, if Committee of the Commission 134 or the Commissioner fails to act within any time limit specified, lack of such action shall 135 constitute an action taken and shall be deemed an approval of any such application.” 136 137 SECTION 9. Modernizing Boating Laws in the U.S. Virgin Islands Title 25 Virgin Islands 138 Code chapter 16 section 405 is amended by inserting: 139 “(j) Notwithstanding any other provision of this chapter, it is legal to anchor in territorial 140 waters EXCEPT: 141 (1) In a zone outlined by GPS coordinates designated by the Commissioner 142 (2) In any that damages a coral reef 143 Formatted: Font: (Default) Times New Roman Formatted: Font: Not Bold Formatted: Font: (Default) Times New Roman Formatted: Font: (Default) Times New Roman Formatted: Indent: Left: 0.5" Formatted: Font: (Default) Times New Roman Formatted: Font: Not Bold Deleted: ¶ Formatted: Indent: Left: 0.5" Marine Charter Business Revitalization Act of 2025 (3) Any zone so designated by the U.S. Coast Guard 145 Title 25 Virgin Islands Code Chapter 15 VIRR 297-4 is stricken pending a revised study and water 146 use plan by DPNR. 147 Title 25 Virgin Islands Code Chapter 15 VIRR 297-7(m) is stricken. 148 Title 25 Virgin Islands Code section 405(a) is amended to read: 149 “(a) The owner of each vessel or houseboat using a mooring or intending to install a 150 mooring in a designated mooring area shall file an application for a mooring permit with 151 the Department. In accordance with the procedures and form prescribed by the Department, 152 the owner or owner's resident agent shall sign the application, include the owner's mailing 153 address, and submit the annual permit fee as provided in the regulations promulgated under 154 this chapter. All owners of vessels shall pay a fee per foot of vessel, based upon the deck 155 length, to the Department for the use of the mooring. The fee for the use of the mooring is 156 an annual fee. A non-resident owner shall include in the application, the name and mailing 157 address of his designated resident agent. An affidavit executed by the applicant setting forth 158 the facts in support of the applicant's claim of ownership is required for every initial 159 application. 160 Title 25 Virgin Islands Code section 405(e) SCHEDULE II is stricken. 161 Title is amended by adding a new subsection (c) to read: 162 “(c) No vessel shall be operated in excess of six nautical miles per hour (knots) within 163 200ft of the shoreline, structure, or dock. No vessel shall be operated in excess of six statute 164 miles per hour within 100ft of a vessel at anchor or affixed to a mooring buoy.” 165 SECTION 10. Eligibility and Conditions 166 To qualify for the incentive provided under this Act, a business must: 167 Formatted: List Paragraph, Numbered + Level: 1 + Numbering Style: 1, 2, 3, … + Start at: 1 + Alignment: Left + Aligned at: 1" + Indent at: 1.25" Formatted: Font: (Default) Times New Roman Deleted: ¶ Formatted: Justified, Indent: Left: 0.5", Space Before: 0 pt, Line spacing: Double, No bullets or numbering, Pattern: Clear Formatted: Font: (Default) Times New Roman Formatted: Font: (Default) Times New Roman, Font color: Auto, Ligatures: Standard + Contextual Formatted: Indent: Left: 0" Deleted: ¶ Deleted: ¶ Deleted: 4 Marine Charter Business Revitalization Act of 2025 (a) Be registered with the Division of Corporations and Trademarks within the Office of 172 the Lieutenant Governor and licensed with the Department of Licensing and Consumer 173 Affairs; 174 (b) Maintain its principal of business in the United States Virgin Islands; 175 (c) For charter operators, conduct operations for at least one hundred eighty (180) days per 176 calendar year from a United States Virgin Islands Port; 177 (d) Enter into a ten (10) year pledge agreement with the Virgin Islands Economic 178 Development Authority; and 179 (e) Remain in full compliance with all United States Virgin Island tax, licensing and 180 reporting obligations. 181 182 SECTION 11. Implementation 183 The Virgin Islands Bureau of Internal Revenue, in consultation with the Virgin Islands Economic 184 Development Authority and the Department of Licensing and Consumer Affairs, shall promulgate 185 rules and regulations necessary to implement this Act within ninety (90) days of its effective date. 186 187 SECTION 12. Severability 188 If any provision of this Act or its application to any person or circumstance is held to be invalid, 189 the invalidity does not affect other provisions or applications of the Act which can be given effect 190 with the invalid provision or application. 191 192 SECTION 13. Effective Date 193 This Act shall take effect thirty (30) days after enactment. 194 Deleted: 5 Deleted: 8 Deleted: 9 Marine Charter Business Revitalization Act of 2025 198 BILL SUMMARY 199 By allowing long-term, performance-based tax relief, modernizing business regulations, and 200 reducing regulatory burdens, the program aims at resuscitating and expanding the blue economy 201 in the United States Virgin Islands. The Act creates an environment where new investment can be 202 attracted and support existing fleet growth, investment in marine services, and expanded offerings 203 of marine attractinos. This strategy will make the United States Virgin Islands once again a 204 desirable charter destination in the Caribbean as well as its largest center for yacht sales and 205 brokerage. In addition, the initiative is expected to bring an increase in economic activity for local 206 businesses. To ensure that the initiative brings concrete and lasting benefits for the people of the 207 Virgin Islands, a formal agreement structure will be set up to maintain any accounts-including 208 sustainability, and economic results which can be measured. 209 210 211 212 213 214 215 216