Gov. Albert Bryan Jr. reaffirmed his commitment this week to salvaging the government’s ailing pension system by the end of the year. However, one of his favored solutions is an internet sales tax, which, if approved, could potentially see Virgin Islanders paying more for products online.

In a statement Tuesday, Bryan voiced his support for a proposed Remote Sales Tax bill, which is expected to be introduced by Senate President Novelle Francis Jr. in an upcoming hearing.

The bill — Bill 33-0330 — seeks to impose a 2% gross receipts tax on companies that are not physically located in the territory, but do business in the Virgin Islands through digital means, such as Amazon and Wayfair.

By capturing these taxes, the territory will be able to generate revenue for critical services and programs, according to Francis. The bill directs 75% of these proceeds to the Government Employees’ Retirement System and 25% to the General Fund.

Collectively, Francis estimated that the territory could generate up to $50 million in revenue if the bill passed.

“Virgin Islanders have become accustomed to paying stateside taxes for orders that are being shipped here,” he said in a statement. “These taxes help these states to maintain their roads, schools and hospitals and manage solid waste. Why shouldn’t the territory attempt to capture these taxes and apply these gains in ways that benefit Virgin Islanders?”

The rub, of course, is whether these taxes will translate to higher costs for consumers. Francis’ spokesperson Shawna Richards said this was a “legitimate concern,” as sellers may choose to drive up their costs. And while this could drive people into brick-and-mortar stores and boost the local economy, the dearth of items available in the territory could lead to scores of frustrated shoppers.

“But I would have to say that anything that is passed on to the consumer could be very minimal,” Richards added. “We’re not reaping any of the benefit of [those online purchases] so why not explore opportunities for some of that to come back to the territory?”

Bill 33-0330 states that sellers are only taxed if the transactions in the previous calendar year or current calendar year exceed $108,000.

As of January, almost 40 states and the District of Columbia have taken measures to enforce remote sales tax collection.

For Bryan, the Remote Sales Tax is one of three solutions to saving GERS, the others being his Cannabis Use Act and a second Internal Revenue Matching Fund debt refinancing deal before the end of December. Both initiatives intend to remit funds to GERS, which continues to barrel toward insolvency in less than three years.

The system, in its current shape, faces a potential 42% cut in retiree benefits by next year, or a 70% cut by as early as 2022.

— Contact A.J. Rao at 340-714-9104 or email