Gas Tax Holiday in USVI Would Have to Be a Legislature-Led Action, Governor Says

A gas tax holiday in the U.S. Virgin Islands — where the government pauses all taxes it collects on gasoline transactions in an effort to bring relief to residents — would have to be a Legislature-led action, Governor Albert Bryan told the Consortium Monday.

The governor of Puerto Rico last Tuesday signed a measure that suspended gasoline taxes for 45 days, and President Joe Biden says he is near a decision to pause taxes collected on each gallon of gas in the U.S.

“I hope to have a decision based on the data I’m looking for by the end of the week,” he said Monday after a Democratic-led effort to pause a tax of 18.4 cents per gallon failed amid Republican opposition.

The moves to provide gas tax relief come as inflationary pressures and Russia's war in Ukraine have led to record-setting gas prices. The average for a gallon of gas on St. Croix surged past $5 per gallon for regular unleaded, and over $6 per gallon for regular unleaded on St. Thomas.

The local government currently levies a 14 percent road tax, or 14 cents per gallon, which is passed on to consumers. There's also the gross receipt tax of 5 percent on all sales that is also passed on to consumers, though all private businesses pay the GRT. Additionally, truckers charge between 4 cents to 5 cents per gallon of gas to transport fuel from Limetree Bay to gas stations. For example, if a trucker delivers 8,000 gallons of fuel to a gas station, this trucker would charge the gas station $400 at 5 cents per gallon for delivery.

According to the Wall Street Journal, critics of the tax holiday say "oil companies may only pocket the tax relief without passing savings on to consumers. Others point out that the tax makes up only a small part of the overall cost of gasoline. And some say state and federal gasoline-tax decreases could jeopardize much-needed road and bridge improvements, including projects to be funded by last year’s $1 trillion bipartisan infrastructure law."