V.I. Code tit. 29, § 713e (2019)
2019 US Virgin Islands Code|Title 29 - Public Planning and Development|Chapter 12 - Economic Development and Incentives|Subchapter I - Economic Development Program|§ 713e. Tax exemptions for the production of affordable housing

 (a) Notwithstanding any other provision of law to the contrary, in order to carry out the purposes of the Act, every person, firm, partnership, joint venture or corporation providing affordable housing pursuant to an approved Affordable Housing Development Agreement entered into with the Government of the Virgin Islands pursuant to the Virgin Islands Affordable Housing Program shall be entitled to an exemption from payment of the following taxes: (1) all gross receipts taxes related to receipts, cash or accrued, derived from or directly connected with the production of affordable housing units under the Act, but if such receipts are derived from or effectively connected with the production of affordable housing units under the Act and other housing units or other types of construction, then the provider of affordable housing under the said Act must allocate the gross receipts between the housing units under the Act and the other construction, based on the provider of affordable housing's total cost of construction. The provider of affordable housing must only claim an exemption for the portion of the receipts allocated to the production of affordable housing units under the Act. The costs of any common facilities must also be allocated between the housing units under the Act and the other construction; (2) all excise taxes on building materials, articles, supplies, goods, merchandise, tools manufactured or brought into the Virgin Islands on or after April 1, 1990, to be used or employed exclusively in the production of affordable housing units under the Act; (3) all customs duties in excess of a 1% handling charge on all materials, goods, tools, equipment, articles and commodities imported into the Virgin Islands to be used exclusively for the production of affordable housing under an approved Affordable Housing Development Agreement under the program. (b) In addition to the exemptions provided in subsection (a), every person, firm, partnership, joint venture or corporation qualifying under subsection (a) of this section, shall have all corporate and individual income tax liability reduced to zero for a period equal to the term of the applicable Affordable Housing Development Agreement or applicable construction, operation or management agreement with respect to income derived: (1) from the construction of affordable housing units under the Virgin Islands Affordable Housing Program; (2) from or effectively connected with the sale or rental of affordable housing under the Virgin Islands Affordable Housing Program, whether such housing is new construction, rehabilitated or improved; (3) from the operation or management of such affordable housing during the period in which it is not sold; or (4) where applicable, from the management of rental property, provided that, in addition to any prerequisites stated in the Act, the person seeking such exemption meets the following conditions: (1) in the case of an individual or a partner in a firm or partnership or a participant in a joint venture, such person is a bona fide resident of the Virgin Islands, and in the case of a corporation, is created under the laws of the Virgin Islands; (2) such person meets the requirements of subsection (b) of section 934 of the Internal Revenue Code of 1986, as amended, or any other applicable provision of federal law, and the provisions of this section 713e, or any regulations issued under such laws; (3) such person undertakes to provide affordable housing as provided in the Act. The exemptions granted in this section shall apply to any vendor of construction supplies and material for use in affordable housing projects pursuant to the Affordable Housing Program authorized by Title 29, chapter 16, Virgin Islands Code, in the same manner that such exemption is applied to providers of affordable housing. (c) Notwithstanding any provision of law to the contrary, the exemption from payment of gross receipts taxes set forth in paragraph (1) of subsection (a) of this section, shall also be granted to all subcontractors for work performed on affordable housing projects pursuant to the Virgin Islands Affordable Housing Program in the same manner that such exemption is applied to providers of affordable housing. (d) Any person entitled to the tax benefits hereby conferred shall apply to the Director under this subchapter for an appropriate certificate of tax exemption. Certificates shall be approved or disapproved by the Commission in accordance with rules and regulations promulgated by the Commission. In considering an application for a certificate, the Director shall consult with the Department or the VIHFA as the case may be to determine whether the applicant for tax benefits hereunder is in default under the Affordable Housing Development Agreement signed by the applicant or under any other agreement or arrangement undertaken by the applicant in connection with the program. (e) The Commission shall issue rules and regulations, consistent with this section and the Act, as may be necessary and appropriate to implement this section. (f) No loan made pursuant to any provision of this Act, including, without limitation, any loan to finance the construction, rehabilitation, improvement, or purchase of affordable housing under this Act, shall be considered a below-market loan for the purposes of section 7872 of the Internal Revenue Code of 1986, as amended. Accordingly, no interest in excess of the rate charged on a loan shall be imputed as income with regard to any loan made pursuant to any provision of this Act. (g) A developer agreement with the Housing Finance Authority entered into by such Authority in connection with mortgage revenue bonds issued by such Authority before December 1, 1990, pursuant to the provisions of applicable Federal tax law shall be treated for all purposes of this section as an approved Affordable Housing Development Agreement entered into pursuant to the Affordable Housing Program for the production of affordable housing units under the Low and Moderate Income Affordable Housing Act of 1990, as amended. (h) A developer who has entered into an Affordable Housing Development Agreement with the Virgin Islands Housing Finance Authority for the construction, rehabilitation or improvement of housing units under the Low and Moderate Income Affordable Housing Act of 1990, as amended, for a project included in an Affordable Housing Plan, which is approved pursuant to Title 21, chapter 2, Virgin Islands Code, shall automatically receive a certificate of exemption from taxes as provided under this section.