Oct. 29, 2004 Frustrated by Innovative Telephone's lack of compliance, the Public Services Commission on Friday sent a second and final notice to the company demanding evidence of its financial viability and proof it had paid its taxes.
PSC Executive Director Kiethley Joseph said Friday the commission had ordered the telephone company to show proof of tax payments within 30 days in an Aug. 25 meeting.
At that time, Innovative Telephone President David Sharp told the PSC he would have the documents to them within a week. (See "Telephone Company Tax Payments Not Documented").
That has not been done.
"So far we haven't received anything," PSC Chairman Valencio Jackson said earlier this week.
In September 2003, Innovative's tax benefits under the Economic Development Commission program expired. As an EDC beneficiary, Innovative received full exemption from gross receipts taxes, real property taxes and excise taxes on the importation of raw materials and component parts used in its production process and of building equipment and machinery. Innovative also received 90 percent exemption on V.I. income taxes and full exemption on withholding tax on dividends and interest.
Innovative told the PSC then the company would not seek a renewal of its benefits. With that understanding, the PSC allowed the company to increase its rates to Virgin Islands consumers. However, Innovative has since sent in a renewal application to the EDC, which will be acted on pending a public hearing. (See "Senators Oppose EDC's Settlement with Innovative" ).
Jackson said under the old agreement Innovative might not be required to pay income taxes until April of next year. He said he is awaiting the EDC's decision on Innovative's renewal application.
According to PSC regulation, Innovative is supposed to approach the PSC first before applying for a renewal of its benefits. This was not done.
"If the EDC grants them a renewal of their benefits, then we would have to proceed with a rate investigation," Jackson said.
Although Innovative may not have to pay its income taxes until next April, the company was scheduled to pay real property taxes Aug. 30 on its property holdings like other commercial property owners in the territory. In addition, gross receipts taxes are due monthly. Innovative has not responded to the PSC's requests for proof those taxes have been paid as due.
Calls to Sharp to verify whether this was done were not returned Friday.
Joseph said the final notice gives Innovative an additional 30 days to produce the required documents.
Joseph said, "If they do not comply, we will have no choice but to take the matter to court."
The company will appear before the PSC on Nov.10 for the commission's monthly meeting and is expected to give testimony on its settlement agreements with the EDC and the Federal Communication Commission (see "FCC and Innovative Sign Decree to End Investigation"). Also on the agenda are status reports from Vitelco and the Rural Telephone Finance Cooperative on various litigation between the companies; settlement of the Delaware or "Greenlight" litigation (see "Prosser Ordered to Pay Millions to Ex-Shareholders"); and repatriation of money from Belize Telecommunications, Ltd.
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