St. Thomas Real Estate Trends

I think even Herman Wouk would be astouned by this "much ado about property taxes" issue.

As reported by the Virgin Islands Daily News:

"The government has officially rescinded the 2006 tax bills that were sent to property owners territorywide according to an executive order signed by Gov. John deJongh Jr. on June 30.

The action is part of the ongoing litigation that has kept the government from collecting property taxes for the last three years.

The case has slowly crawled along since September 2008 while the government fought a contempt ruling from District Court Judge Gomez at the 3rd U.S. Circuit Court of Appeals. In mid-June, the 3rd Circuit affirmed Gomez's contempt order, effectively invalidating all the 2006 property tax bills sent out.

The executive order renders the 2006 tax bills null and void, Sara Lezama, spokeswoman for the V.I. Justice Department, said Monday.

The next step in the case will be a hearing before Gomez on Sept. 17, when the government will support its position that the Board of Tax Review, which started up last year, is now functioning as mandated by the court. The board, which hears and rules on property taxation disputes, was inactive for years.

In a year's time, Lezama said, the board has reduced the number of pending appeals from 274 to 41.

"The board is functioning," she said.

The government's troubles with property taxes has been going on for more than a decade.

The territory has been embroiled in litigation with the goal of establishing a fair and equitable property tax system. A group of commercial property owners started the legal battle when they sued the government in District Court, arguing that the government's system of property taxes was unfair and unconstitutional.

The court agreed with the property owners and in 2003 issued an injunction freezing property values at those determined in 1998 - the last year the court deemed the values were fair.

Before the territory can collect property taxes using new values, a judge must determine that the territorial government has met several conditions to improve the taxation system - such as conducting a comprehensive revaluation of all of the territory's properties and resurrecting the Board of Tax Review. A court-appointed special master was put in place to oversee the property revaluation.

Since 2003, the government has been working to accomplish these goals.

Last summer, a series of hearings was held in District Court about whether the V.I. government had met its obligations for the court processes to be over and so property tax bills could be sent out using new values. In August - before Gomez had ruled on any of the matters pending before him - the V.I. government went ahead and sent out property tax bills.

In September, Gomez invalidated the bills and held the V.I. government in contempt of court. The V.I. government appealed Gomez's contempt ruling to the 3rd Circuit. Because the appellate court had postponed the enforcement of the contempt ruling, government officials believed they had permission to send out another round of new bills. The latest round of 2006 property tax bills were sent out in May. "

Just how much can our already strapped resources be squandered in postage? What do you think about this ongoing insanity?