Is the Future of Happy Hour in Jeopardy??

beach bar

Oh my goodness folks, say it isn’t so!

We received an email from a friend yesterday morning, which included a link to the Governor’s proposed “Virgin Islands Revenue Enhancement and Economic Recovery Act of 2017.” The proposal includes a pretty hefty increase on beer, wine and other alcohol among other things.

Currently, domestic beers are taxed at $1.55 a case. They Governor wants that to jump to $11.55 a case. Foreign beers are currently taxed at $2.08 a case. The Governor wants that to jump to a whopping $14.08 a case.

governors letter screenshot

Ok, so let’s use Coors Light for example. A case of Coors Light currently costs the bars and restaurants $21.95 are on island. That would jump to $33.50 a case or $1.39 per beer. So for those of you who love your dollar beers at Woody’s during their World Famous Happy Hour, they would actually start losing .39 cents per beer, and that doesn’t include labor or the barge charges that they tack onto the delivery fees. No bueno.

The Governor is also proposing an increase on spirits and liqueurs, which are currently taxed at $6 per case, to 10 percent of its value. The same goes for wines and brandis, which are currently taxed at $2.04 per case. Those too jump to 10 percent of its value.

Goodbye happy hour. It was nice knowing you.

Am I being dramatic? Yes. Can this seriously kill happy hour as we know it? Yes.

We chatted about this with a few bar managers yesterday. Here’s what they had to say:

“Sin tax. That would put us out of business. No more happy hour. We pay over a $1 for a bottle of beer now.”

“If this goes through, the cheap drinks and happy hours are gonna go away and we all will be charging resort prices for drinks.” 

Another huge item in this Act pertains to timeshares, which we know many of you own here on St. John. The Governor is proposing a $30 per day tax on every timeshare unit for each day of occupancy in the Territory. That’s a pretty large number.

What are your thoughts on all of this? Please let us know in the Comments section or over on our Facebook page. Or you can vote below in our poll.

Click here to read the entire proposed legislation.

36 thoughts on “Is the Future of Happy Hour in Jeopardy??”

  1. $30/day tax on time share occupancy….WTF. Seriously, this is not a good idea. That’s $210 a week less to spend on food, beverages, activities, etc. Way more harm than good achieved by this “penny wise (not even), pound foolish” potential legislation. How much Cruzan had he consumed when he came up with this brainchild?

    • People, did we forget every minute on that island is happy hour! It has to be done long as the monies are going towards the island and it’s residents, the money has to come from somewhere, no? So from now on happy hour beers will be $2 each ..??? No worries. Didn’t here about the new limo though……. that’s a little much! Maybe the tax should be when people aren’t at the timeshares/ 2nd homes.

      • You mean as long as it goes to the politicians. Last time I had dinner at Zo Zo’s the governor was there with an entourage and body guards like I couldn’t believe. USVI with 250k residents and major US cities with millions. The Dallas mayor doesn’t behave like that. Neither does the governor. . .

  2. The problem is that something has to be done, otherwise we will end up like Puerto Rico – where others tell us how to fix our financial problems. To me, these sin taxes are the best way to have our largest population segment, tourists and visitors, help to pay their fair share to maintain this as the slice of paradise that they enjoy. Otherwise, the full burden will fall on USVI residents to fix the problem. Besides, those visiting us already know that it is expensive here, and they aren’t going to let another $1-$2 per beer keep them from ordering them. Maybe Woody’s will have to charge $2/beer – but maybe they’ll make more overall profit, too.

    • I am sorry to say it, but Jim has a point. The need for these taxes is a reflection of the tough time for the finances of the Virgin Islands. An attempt was made to raise money in the bond markets last week, about 200 million which was going in large part to plug a budget gap of over 100 million. There were not enough investors to buy it despite tax free interest levels of almost 8%. Say what you want about the evils of debt, but its a bad sign when you cant get a loan. You cannot cut expenses enough to fix the financial problems here. The final tax increase will be less than this, but something will surely pass.

  3. Any brain cells left in the minds of these officials? These taxes will hit at the heart of the tourism industry. But they probably only see the piece of the increased revenue pie they can grab for themselves. Long term scenario: people with time shares will sell them and the buildings we go vacant and in disrepair, they will buy their beer at the discount store on St Thomas and have happy hour in their rented villas and hotel rooms, eventually realize that St John is already way expensive and discover other islands in the Caribbean. This reminds me of the way the Vietnamese functioned; zero deductive reasoning, not thinking ahead to any consequences. Years of communist and military dictatorship had dumbed them down, what is the excuse of these guys?

  4. How about getting our financial house in order Governor? What happened to your campaign promise of fiscal responsibility? I don’t think an across the board raise and a new $80,000 limo are in line with your promise.

    If you continue to try to solve the island’s financial problems by putting undue burden on our main industry (tourists), they will eventually go somewhere else. Think about how that will impact your tax revenue!

    • Government officials usually think that the way to increase governmental revenue is to tax the tourist. They fail to recognize the “tourist” is the backbone of the overall economy, not just a component of the tax revenue stream. I will never forget being escorted by a resident across the busy road in Charlotte Amalie on my first visit 10 years ago. I said, “I really appreciate you taking the time to help me and my family”. He replied, “without you we have not economy or civilized country”. He got it. Why can’t the politicians?

  5. Is he CRAZY!! Doesn’t he realize that if he enacts this he will lose his source of revenue on the Island. Tourism is the industry for St. John without tourist St. John will disappear . I think somebody has to talk to him and make him understand that he is “Cutting off his nose to spite his face ”
    Please keep us informed of further development
    Connie & Bill (New Jersey)

  6. Tourism keeps the VI alive. Keep squeezing the tourists out – & see what they end up with. Our family has already stopped eating at the more expensive restaurants, & has downgraded to less expensive lodging while there. When it gets too expensive to visit St. John, we’ll have no choice but to opt for a week on the East Coast.

  7. I was an Air Traffic Controller on St. Thomas from 93-97. They needed more revenue then same as now. Navy wasn’t stopping by and Tourism was down due to crime. So they raised the price per Airplane seat coming in. Well, all that did was raise the price of a flight coming to the V.I. Ergo less people flying in due to airfare raised to cover that price hike. This will backfire on them again. People will go to other islands(BVI) or FL or the D.R. Granted I don’t have “THE” answer but this ain’t going to help.

  8. The increases are tooooo damn large! It’s foolishness. Yes, the Territory is facing an economic challenge created over decades. Yes, something needs to be done – and quickly. But NO, it can’t be solved with huge increases in taxes on booze and accommodations! Austerity measures first! As a strategy … look at solar power …start by implementing conservation and then install what you need to generate. End rant ; )

  9. Apparently the governor still hasn’t figured out that by raising the head tax on cruise ships, he/she decimated the cruise ship traffic coming to St. Thomas, St. John and St. Croix.

    This is not only short sighted, but fiscally stupid. There are many other Caribbean Islands that will promote that they do not charge usury fees to come spend money on their islands …

  10. St John’s economy is driven and supported by tourism. Targeting tourism will have the undo effect over time of depressing that industry. Anyone who thinks the local wellbeing of residents will not be affected by this, has got their head buried in beach sand. The issue is why do they need the additional revenue? That’s the question. The government is well documented in their inability to properly spend tax dollars. Taxation never goes down, so be careful about your blind support for options that do not have a direct consequent for you personally.

  11. We are a once a year tourist family and bring new friends and expose them to St John each year and then they come back and bring their friends. You get the picture. We are in Denver and it is no small effort to get to St John but, we have done it for the love of the island. We consider this proposal a kill shot. My thought is to find some competing island like Hawaii and go there or invest our annual vacation money in the house and stay home. Please don’t let this happen. Sixteen time visitors in 16 years.

  12. First, a question. Is this a proposal or a law? If only a proposal? what will be necessary to make it a law? What can be done to oppose it?——————-If the timeshare portion becomes law, there probably won’t be enough customers at the bars and restaurants to take advantage of happy hours————–in fact, there may not be enough visitors to keep St. John alive !!!!!!!!!!!

  13. You may want to take more time to read the VI Daily News and other VI news sites that have been reporting the VI Government is really out of financial options at this point, thanks to so many years of fiscal mismanagement, waste, and improper and unnecessary spending. Out of options. So, this is the last desperate attempt to tax the industry that keeps the VI alive rather than look within. So glad I don’t have a business there anymore.

  14. First I don’t know how you quote someone but do. Not have the persons name you quoted ???
    No biggie …
    Second in St. John drinking seems to be a sport
    Some locals even celebrate that drunk driving is legal and brag to tourists how cool it is…
    ( that’s smart )
    At the end of the day if the money is spent correctly and put back into schools, roads, infrastructure etc… then it’s great
    In short having worked closely with St. John rescue for years almost everyone on St. John should be drinking less and if they put as much effort into improving their island as they did as Sunday funday / happy hour they would have an exclusive island where everyone would pay a premium to go to in which case all residents would have more income.

  15. I too have been blessed to have 16 trips to St. John. I worked a lot of overtime and also shared the cost of villa and car rentals with either a friend or family member. It was the only way to be able to visit St. John as often as I did. Although I will miss my trips to the island that I have come to love so much, I would have to find a less expensive option. Living in California, Hawaii would be much less expensive and a whole lot easier to get to so that could be an option. I have been to Hawaii and it is very nice but the island that my heart belongs to is St. John. Maybe I could figure out a way to stay on a BVI and take the ferry over to St. John for a day instead of the other way around. Maybe I should sit this year out and think about it.

  16. Once again, a government is trying to increase the production of golden eggs by strangling the goose. These kinds of knee-jerk reactions are childish and unsound.

    I’m sorry Jim, this is not our problem to solve. Isn’t this the island that has not been able to collect property tax for years due to their own incompetence? Aren’t they wasting money left and right with pay rises and the purchase of limos? Isn’t this the place that raised our tax for rentals 25% just last year? When they increased the rental tax to 12.5%, I said that we, as a group, should fight that increase. I also said that if we don’t, they will feel free to pile them on us over and over again. Well, look around. That is exactly what I said they would do.

    I am not willing to support that level of irresponsibility by bringing my hard-earned money to be wasted like this. I can find my way to BVI just as easily as I did when I first came to the USVI.

    If there aren’t enough enough people willing to fight back, I am out of here. I will not be willing or able to pay any more.

  17. As a frequent visitor to Saint john, 3 times in the last 14 months, I would agree that continually taxing the tourist is risky at best, and I’m not talking just about the alcohol tax Saint John is already expensive on most fronts whether it be the grocery store. liquor store, renting a car or a villa. Having also traveled to other islands, most cost more then the mainland but some can be visited for much less than the USVI. With all internet forums out their chatting, the tide of tourists could eventually start looking in other directions if the island gets the reputation of not being tourist friendly.. If revenue is needed that badly they should look at all possible sources and spread it out carefully.

  18. touché jimg20! Recent posts have only echoed that this is indeed “a tough time for the VI economy” but no-one questions why is this??? I think the biggest question is where will this money go? I think we all know that the VI Govt. is in dire financial straits but why? Seems to me that there is a lot of non-essential spending on the part of the Governor (e.g. limo, the rental house – remember that one?), nor is there any fiscal responsibility relative to senators salaries. The government should first get a handle on PROPERLY assessing and collecting current revenue streams (taxes) from ALL Virgin Islanders (regardless of your family name), before you start imposing new taxes. This is from someone who moved to the VI in 1987, left, came back, left, came back but left finally bc of this type of corruption.

  19. It might seem easy to condemn this tax increase if you are just an occasional visitor here. The Virgin Islands, like Puerto Rico, are facing a major debt crisis. The proposed taxes would still produce alcohol and lodging taxes that are smaller than in many states and vacation areas within the United States. Please don’t think only of how many beers you can get for your beer budget: if you’d like the USVI to remain a stable, well maintained, and peaceful place, be happy to contribute to our financial well being in the ways you’d expect at home.

    • The difference is back at home in the United States the grocery, car rental, and villa prices are more affordable. People will find other places to vacation as STJ is already so expensive. I think your tourism industry will take a big hit.

    • Susan, I am so tired of people trying to justify the mismanagement, corruption, wasteful spending and inability to run an effective government in the USVI. When you figure out how to clean up what is going on there and an efficient way to enforce the tax laws you already have, you probably will not need these proposed taxes. If you do they will be a small fraction of this proposal.

      Unless your government runs in a similar way to state-side governments, you have not earned the right to compare yourselves with us.

  20. Long time visitor to St. john. We rent a villa with friends/family and we love STJ but bottom line if these taxes go through we will vacation somewhere else. STJ is already expensive enough with high villa, grocery store and car rental prices. Sadly these new taxes will significantly decrease tourism.

  21. I have never understood why the VI has no sales tax or meals tax. The government should do the math. Wouldn’t they pull in tons more cash from a 5% tax on each as practically every state is doing? Don’t be stupid. St John is great but it’s pretty easy to buy a plane ticket to another destination. Look at Bermuda. It’s close to the northeast, has nice beaches but no one vacations there . Why? Too damn expensive!

    • The VI charges businesses a 5% gross receipt tax on total revenues. So essentially there is aa sales tax it’s just hidden to consumers.

  22. Come on people! The math isn’t that difficult to do on this one: a bottle of Cruzan costs a bar about $6 a bottle. With the current rate of $6 per case applied to a twelve bottle case, each bottle is taxed $0.50 which means the actual pre-tax cost is $5.50. At the proposed rate of 10%, this would jump a whopping $0.05 a bottle to $0.55! Gasp!! That extra $0.05 would then be spread over the number of drinks a bartender can get out of the bottle, which as we all know depends on the bartender! The overall impact to you and your painkiller: absolutely nothing.

    As for beer, the Coors Light example used here shows that Woody’s is already losing money on a $1 beer once the $0.50 a case delivery fee and their overhead is factored in. So they should already be at $2 a beer (or more) anyway! Hint: they can afford to lose a little on the beer because you are most likely going to buy food, stay past happy hour and/or buy other, more expensive beverages. It’s that higher end stuff that will show the effects of the increased tax rate, but those libations are exactly what you are not being served at happy hour!

    Any claim that happy hour is going to be over or irreparably changed is completely removed from the reality of the situation. Without actually digesting the facts, those who spout these knee-jerk alarmist reactions (including the blog’s author and her obviously ill-informed sources) do little good for those of us who live here. Yes, we depend on tourism. Yes, you are all very welcome to visit our little slice of paradise. Yes, there will still be happy hour, it is not in jeopardy and I will probably see you there! The only difference might be that Woody’s has to charge what they should already be charging for your Silver Bullet. Where is it written that happy hour has to have beer for a buck anyway? I certainly didn’t find any of that the last time I was in The States. Calm down everyone!!

    Good, now I can go back to my Cruzan…

  23. I agree with Jim, Jay and K-rod. The price of beer, booze and cigarettes won’t keep the tourists visiting the island, they pay much more for these at stateside.

    Long time STJ visitor, coming again in May for two weeks. 18th time for me and my husband. We really like Catered to…Vacation Homes, they have the best rental villas.

    Marketta

  24. A modest increase in drink prices won’t keep me from visiting the island. However, the $30/day occupancy fee on my timeshare will keep me from visiting as often, and will also keep me cooking in my unit instead of going to the restaurants. Penny wise, pound foolish. I’d rather just see the property taxes increased than this occupancy fee imposed.

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