DocketNumber: Docket No. 47730
Citation Numbers: 3 V.I. 465, 1955 U.S. Tax Ct. LEXIS 169, 24 T.C. 408
Judges: Murdock
Filed Date: 6/16/1955
Status: Precedential
Modified Date: 1/13/2023
*169
Estate Tax -- Citizen of the United States -- Domiciled in Virgin Islands --
*466 *408 OPINION.
The Commissioner determined a deficiency of $ 101,887.88 in estate tax. The only issue for decision is whether Congress has made the Federal estate tax applicable to a citizen of the United States domiciled and residing in the Virgin Islands. The facts have been presented by a stipulation which is adopted as the findings of fact.
The decedent was a citizen of the United States from the time of his birth in 1867 to the time of his death on February 10, 1951. He established his domicile in St. Thomas, the Virgin Islands of the United States, in or about November 1938 and thereafter retained that domicile until his death at his home there.
His estate, valued at $ 521,212.60, consisted of his home and other real estate on the island of St. Thomas valued at $ 56,407.14; stocks and bonds*170 valued at $ 358,263.12, in the custody of a New York bank; $ 82,413.51 on deposit in a New York bank; $ 7,153.84 on deposit in a Virgin Islands bank; other intangible personal property valued at $ 6,625.34; tangible personal property in New York valued at $ 25; and tangible personal property in the Virgin Islands valued at $ 10,324.65.
The will of the decedent was probated in the Virgin Is*467 lands and also in New York. Virgin Islands inheritance tax in the amount of $ 19,339.12, based upon a gross estate of $ 514,611.12, was due and was paid.
*409 A Federal estate tax return showing no tax due was filed with the collector of internal revenue for the second district of New York. The Commissioner, in determining the deficiency, held "that the decedent was a citizen of the United States within the meaning of
The Commissioner argues in this case, as he did in
The decedent in the
Section 17 of the Organic Act of the Virgin Islands of the United States, 49 Stat. 1811, effective June 22, 1936, provided as follows:
Beginning on January 1, 1938, or on such earlier date subsequent to January 1, 1937, as may be fixed by local*173 law or ordinance for either municipality, and *410 thereafter, the franchise shall be vested in residents of the Virgin Islands who are citizens of the United States, twenty-one years of age or over, and able to read and write the English language. Additional qualifications may be prescribed by the legislative assembly:
The Electoral Ordinance of the Municipality of St. Thomas and St. John was enacted by the Municipal Council on May *469 26, 1938, and approved by the governor of the Virgin Islands on June 3, 1938. It was then reported to Congress as required by section 16 of the Organic Act and, not having been annulled, was printed at page 265
Section 1: That the right of Franchise shall be vested in residents of the Virgin Islands who are twenty-one (21) years or over, citizens of the United States, not legally disqualified, able*174 to read and write the English language.
* * * *
(b) For the purposes of this Ordinance, residents of the Virgin Islands shall be persons who have lived in the Virgin Islands for a period of one year next preceding the election and in the Municipality in which they desire to vote for a period of six months next preceding the election and in the district in which they desire to vote for a period of sixty days next preceding the election.
The right to vote conferred by the Organic Act and the Electoral Ordinance is the very essence of citizenship and even though this term is not employed with respect to an inhabitant of the Virgin Islands, we conclude that the decedent herein occupied the same relationship to the Virgin Islands as did the decedents in the
The Government of the United States has adopted a benevolent attitude toward its unincorporated territorial possessions, and it is well established that laws of the United States of general application do not apply to the territorial possessions unless they contain some specific reference thereto. The Virgin Islands, like Puerto Rico, is an unincorporated territorial possession of *175 the United States. The Naval Appropriations Act of 1921, 42 Stat. 122, is in part as follows:
*470 The income-tax laws now in force in the United States of America and those which may hereafter be enacted shall be held to be likewise in force in the Virgin Islands of the United States, except that the proceeds of such taxes shall be paid into the treasuries of said islands.
The Organic Act of the Virgin Islands of the United States provides that all taxes, duties, fees, and public revenues collected in the Virgin Islands shall be covered into the treasury of the Virgin Islands including "the proceeds of the United States income tax, and the proceeds *411 of any taxes levied by the Congress on the inhabitants of the Virgin Islands," Act of June 22, 1936, ch. 699, sec. 35, 49 Stat. 1816. Taxes thus collected are to be used for the benefit of the Virgin Islands. The Federal estate tax laws, however, were never specifically made applicable to the Virgin Islands but the Virgin Islands has enacted its own inheritance tax laws with the approval and under the authority of our Congress.
The conclusion was reached in the
It is to be noted that our conclusion is in accord with the views expressed by the Senate Committee on Interior and Insular Affairs in its report on the Revised Organic Act of the Virgin Islands, approved July 22, 1954, S. Rept. No. 1271, 83d Cong., 2d Sess. (1954). Therein, the committee stated at page 4 that with the exception of excise taxes, American citizens in the Virgin Islands were exempt from making any contribution to the financial support of the American Government. The committee also voiced the hope, at page 2 of its report, that the enactment of the Revised Organic Act "would be a step forward toward the day when the Virgin Islands could be self-sustaining and the American citizens in the islands could contribute their fair share toward support of their Government."