U.S. Virgin Islands Bookkeeping Services

One number decides almost everything about your USVI bookkeeping: $225,000. Below it, you get a $9,000 monthly gross-receipts exemption and file once a year. At or above it, the full 5% applies to every dollar and you file monthly. The exemption is use-it-or-lose-it each month, related businesses share a single one between them, and the excise tax that was switched off between 2018 and 2021 is being collected again.

Get Started — Money-Back Guarantee

On This Page

• The USVI small-business tax landscape
• The $225,000 threshold changes two things at once
• The $9,000 exemption is use-it-or-lose-it
• Related businesses share one exemption
• Excise tax is on again — check it is switched on
• Payroll splits between the BIR and the IRS
• USVI islands we serve
• USVI FAQs

The USVI Small-Business Tax Landscape

Title 33, Virgin Islands Code, Chapter 3 (sections 41, 42(a), 43) and § 581; Title 27 § 301(d); VI Bureau of Internal Revenue Tax Structure Booklet and Forms 720 V.I., 720-B, 721 V.I. and 722 V.I.; Department of Licensing and Consumer Affairs; checked 5 October 2026. The BIR booklet is not fully current in every section — confirm rates, thresholds and licence fees with the Bureau or your CPA. A business at exactly $225,000 sits in an area where the BIR’s own text is inconsistent; ask before assuming.

The $225,000 Threshold Changes Two Things at Once

Most tax thresholds change one thing. This one changes two, which is why crossing it catches businesses out.

Below $225,000 in annual gross receipts, you get a $9,000 monthly exemption and you file once a year on Form 720-B, within 30 days of year end. At or above it, the exemption disappears entirely, the full 5% applies to every dollar of gross receipts, and you file monthly on Form 720 V.I., within 30 days of each month end.

So a business that grows through the threshold does not simply pay more tax. It loses $108,000 of annual exemption, and it goes from one return a year to twelve. A set of books kept to an annual-filing standard will not support monthly returns on thirty days’ notice.

The practical requirement is that gross receipts are tracked monthly and watched against the threshold during the year, not discovered at year end. That is the difference between changing filing frequency on a plan and changing it under a deadline. One detail to note: the BIR’s own text describes the threshold as “$225,000 or more” in one section and “more than $225,000” in another, so a business sitting exactly on the number should ask rather than assume.

The $9,000 Exemption Is Use-It-or-Lose-It

The $9,000 is a monthly allowance, not an annual one, and an unused portion does not carry forward.

For a business with level revenue, that distinction never comes up. For a seasonal business — which describes a great deal of Virgin Islands commerce — it is the whole ballgame. A quiet month at $4,000 of receipts wastes $5,000 of exemption permanently. A busy month at $30,000 gets the same $9,000 as every other month.

The bookkeeping consequence is that revenue has to be recognised in the correct month, not whenever the deposit cleared or the invoice was entered. Timing that would be immaterial on the mainland is directly worth money here, because shifting receipts between months changes how much exemption gets used.

A business that is exempt from paying still has to file. A nil return is a return.

Related Businesses Share One Exemption

This is the provision that most often turns a tidy structure into a surprise assessment.

Businesses with more than 50% common ownership, or owned by the same taxpayer or by family members, get one $9,000 monthly exemption between them — and their receipts are combined to test the $225,000 threshold. Three restaurants under one family, each at $150,000, are not three businesses with three exemptions under the threshold. They are $450,000 of combined receipts, over the threshold, with one exemption to divide.

The bookkeeping requirement is that related entities are kept as separate, reconcilable sets of books that can also be combined on demand — because the combined figure is what the threshold test runs on, and it has to be defensible. Commingled records across related entities make that test impossible to answer and the underlying books impossible to audit.

Whether a particular ownership arrangement falls inside the rule is a question for the Bureau or your CPA. What we can do is keep each entity clean and the consolidation available.

Excise Tax Is On Again — Check It Is Switched On

If your books were set up between 2018 and 2021, there is a good chance excise tax is still turned off in them.

USVI excise tax collection was enjoined after a federal court held that collecting it only on imported goods violated the dormant Commerce Clause — a decision the Third Circuit affirmed in October 2020. The Bureau began collecting on local manufacturers from 1 January 2021, and the injunction was lifted in March 2021. It is being collected today, and filed through the Bureau’s online excise portal.

Two things follow. First, any configuration dating from the suspension needs excise switched back on. Second, the base is not what most people assume: it is invoice value plus a 5% mark-up, with a 4% catch-all rate, 2% on drugs, medicine and clothing, and 10% on vehicles, firearms and bicycles. Importers holding an excise bond or Customs-bond rider — which most merchants do — defer payment to the 15th of the following month rather than paying at entry.

And excise tax is not customs duty. Customs duties, at 6% ad valorem, are administered by US Customs and Border Protection, not the Bureau. They are two separate charges on the same shipment, and they are constantly conflated. Books that net them together cannot support either filing.

Payroll Splits Between the BIR and the IRS

The Virgin Islands mirrors the federal Internal Revenue Code — the rules are federal, the money is territorial — but payroll does not go to one place.

Income tax withholding goes to the Bureau of Internal Revenue, on Form 501VI for deposits, Form 941VI quarterly, and Forms W-2VI and W-3SS annually. FICA and FUTA go to the IRS, exactly as on the mainland. Self-employment tax is reported to the IRS on Form 1040-SS.

That split is the most common USVI payroll misconfiguration we see. A system that sends everything to one agency will be short with the other, and the shortfall accrues quietly between filings.

One more item worth knowing if you operate as a corporation: a 10% surcharge applies to total VI income tax liability. The Bureau’s own worked example shows a corporation in the 21% federal bracket effectively paying 23.1%. If your accruals are built on the headline rate, they are low.

USVI Islands We Serve

We serve businesses on St. Thomas — Charlotte Amalie, Red Hook and Frenchtown — on St. Croix, in Christiansted and Frederiksted, and on St. John, in Cruz Bay and Coral Bay, all remotely, with overnight turnaround. Our headquarters sits in the same time zone: see Puerto Rico. Browse all locations.

Get Started Today

USVI Bookkeeping FAQs

Related Resources