USVI Gross Receipts Tax: What It Is and How to File

The U.S. Virgin Islands (USVI) Gross Receipts Tax is applied to the total revenues of nearly every business in the territory. Unlike income or sales tax, this assessment is calculated on a business’s full revenue before any expenses or deductions are considered. The revenue from this tax is a primary funding source for the Government of the U.S. Virgin Islands and its public services. The tax is administered by the USVI Bureau of Internal Revenue (BIR).

Determining Tax Liability

Any individual, firm, or corporation “doing business” in the Virgin Islands is subject to the gross receipts tax. This applies to most commercial activities within the territory. The tax is calculated on a company’s “gross receipts,” which includes all income from sales, services, trade, or commerce. This means revenue from the sale of tangible property, services rendered, rental income, and other fees are all part of the taxable base.

The calculation does not permit deductions for the cost of property sold, materials, labor, taxes, or other business expenses. The standard tax rate is 5%, but its application depends on the business’s annual revenue. For businesses with annual gross receipts of $225,000 or more, the tax is calculated on their entire gross receipts. For smaller businesses earning less, the 5% tax is applied only to the portion of their gross receipts that exceeds a monthly exemption. Because the tax is based on total revenue, a business operating at a net loss may still have a tax liability.

A business’s reporting year for gross receipts should align with its fiscal year used for income tax filings. The tax applies to businesses serving the public and those acting as contractors for the Government of the U.S. Virgin Islands on public works projects.

Available Exemptions and Deductions

The most widely available exemption is for smaller businesses whose annual gross receipts are less than $225,000. These entities are exempt from paying tax on the first $9,000 of gross receipts each month. A business is presumed to qualify if its gross receipts for the prior tax year were below the $225,000 threshold.

This presumption continues monthly until the business’s cumulative receipts for the current year reach $225,000. Once the threshold is met, the exemption ceases, and tax becomes due on the entire amount of gross receipts for that year, including previously exempted amounts. Conversely, if a business pays tax on its full receipts and is later found to qualify for the exemption, it may be entitled to a refund.

Certain industries and activities also receive specific exemptions. Commissions from the sale of Virgin Islands Lottery tickets and revenue from producers of agricultural products are exempt. Businesses that are beneficiaries of the territory’s Economic Development Program or the Research and Technology Park Program may also be exempt from gross receipts tax on their qualifying income.

Required Information for Filing

The document for this tax is Form 720 V.I., which can be obtained from the USVI Bureau of Internal Revenue’s website. Businesses with annual gross receipts under the $225,000 threshold may use the simplified annual Form 720-B. Before starting the form, a filer must have their business name, Employer Identification Number (EIN), and business license number available.

Filers need the accurately calculated total gross receipts for the filing period, representing all revenue received before any expenses. If claiming the monthly exemption, the filer must have the precise amount of gross receipts for each month to correctly apply the $9,000 deduction. Clear records should be kept to substantiate these figures.

Filers must identify the correct code for their principal business activity from the form instructions. For businesses with multiple locations or divisions, all revenue must be consolidated into a single return for the registered entity.

The Filing and Payment Process

The return and any tax due must be submitted to the USVI Bureau of Internal Revenue within 30 days following the last day of the month being reported. For businesses that qualify to file annually using Form 720-B, the deadline is January 30th of the following year. A return must be filed even if the business is exempt from payment or had no gross receipts for the period.

The completed form and corresponding payment can be mailed to the BIR at their specified address or submitted in person at a bureau office. Filers should confirm the correct mailing address on the bureau’s website to avoid delays. Payment should be made for the full amount of tax calculated on the form.

After submitting the return and payment, it is good practice to retain a complete copy of the filed form and proof of payment for the business’s records. These documents serve as evidence of compliance with the territory’s tax laws.