A bill that would prevent Industrial Development Commission beneficiaries from extending their tax breaks to new acquisitions will apparently be introduced by Sen. Roosevelt David. In a statement released Monday, David said that although he believes in comprehensive tax and IDC reform, this proposal must be implemented immediately to "stop the hemorrhaging of tax dollars" through corporate mergers and buyouts, such as V.I. Community Bank's pending purchase of Chase Manhattan's Virgin Islands operations.
Earlier this month businessman Jeffrey Prosser reached an agreement to buy Chase Bank's nine branches and 15 ATMs on St. Thomas, St. Croix and St. John in the U.S. Virgin Islands and Tortola in the B.V.I. Prosser owns V.I. Community Bank the only bank in the territory that receives IDC benefits. There continues to be speculation about whether the benefits of VICB's small operation — two branches on St. Croix — would extend to the Chase acquisition.
Chase Eastern Caribbean, which included BVI and St. Maarten, paid about $6 million in income taxes in 1996, and about $5 million in 1997 and 1998, according to a source inside Chase — part of the tax money that would not be paid if the VICB benefits were to extend to Prosser's new acquisition..
David also said there is nothing to gain from VICB's proposed takeover of Chase, adding he believes the merger will result in the closing of Chase's St. Croix branches and the loss of jobs.
Editors' note: The original figures on Chase's tax liability quoted have been reviewed and revised.