Archive for the ‘Taxes’ Category

Immigration Reform to Give States $2 Billion Economic Boost

August 7, 2013

Immigration Economic GrowthA report released in July by the Institute on Taxation and Economic Policy examined state and local tax contributions from the 11.2 million undocumented immigrants currently living in the U.S.  The report found that tax contributions in 2010 from undocumented immigrants reached $10.6 billion dollars, “with contributions ranging from less than $2 million in Montana to more than $2.2 billion in California.” The report also provides a state-by-state breakdown of the projected impact of pending federal immigration reform, granting unauthorized immigrants the right to legally work in the U.S., on state tax revenue, projecting over a $2 billion dollar increase across the states.

According to the report, in addition to reforms benefiting states known for their concentrations of immigrant populations, several states not usually associated with significant immigrant populations such as West Virginia, Delaware, and Kentucky may see a jump in tax revenue from immigrant populations ranging from 30-45%.

The report, offering strong support for the federal immigration bill, comes after several other studies finding that immigration reform would prove economically beneficial, including studies finding reform “would shrink the deficit by $197 billion over the next decade” and may lead to a wage increase for U.S.-born workers.  Furthermore, according to a Pew Research Center poll, 75% of Americans believe that granting legal status to undocumented immigrants would benefit the U.S. economy.

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The Advantage of Operating a Foreign-Owned Business in the United States Virgin Islands – The USVI Exempt Company

August 22, 2012

The U.S. Virgin Islands are the only place in the world were tax-free entities can be created under the U.S. flag. Such companies enjoy the non-tax advantages of incorporation within the United States, while avoiding the federal and local income taxes associated with incorporation in any other United States jurisdiction.

As a territory of the United States, federal tax law remains applicable within the U.S. Virgin Islands. However, the U.S. Virgin Islands legislature has the authority to permit tax-free companies to organize and operate within the territory. These companies are known as USVI exempt companies. Popular uses for USVI exempt companies include captive insurance companies, ownership of aircraft, and holding companies for portfolio investments.

To qualify as a USVI exempt company, an entity must be at least 90% owned and controlled by persons or companies outside the U.S. and USVI. This requirement is exempted for companies licensed as captive insurance companies. Qualifying USIV exempt companies pay virtually no U.S. or USVI income taxes. Furthermore, the only local taxes USVI exempt companies are required to pay are an annual franchise fee of $1,000. This favorable tax scheme is guaranteed through contract with the USVI government for 20 years.

USVI exempt companies are subject to certain requirements, such as having three directors and three officers, all of whom may not be residents of the USVI. The company must also appoint a local, USVI resident to be an agent for service of process. While non-residents can form separate USVI exempt companies, USVI exempt companies may also be a branch of a company incorporated elsewhere.

It is both easy and inexpensive to form an USVI exempt company. The process can take as little as 24 hours, and the incorporation fee is only $400.