By the Caribbean Journal staff

The US Virgin Islands’ hotel tax is going up.

The United States Caribbean territory has announced that its hotel room tax will increase to 12.5 percent from 10 percent, a 25 percent increase.

US Virgin Islands Governor Kenneth Mapp signed the increase into law earlier this month, promising to help use the funds in part to develop sports tourism in the USVI, particularly horse racing.

“We have the ability to make the Virgin Islands the center of horse racing in the Caribbean, and we will expand our paradise jam basketball tournaments by offering monetary prizes to the winning men’s and women’s teams,” Mapp said. “In addition, we are now providing monetary support to send our inter-scholastic high school teams to compete not only within the Virgin Islands, but to compete outside the Virgin Islands, in the BVI and Puerto Rico as well as host teams from those jurisdictions here.”

The tax increase will take effect Jan. 16, according to Marvin Pickering, director of the Virgin Islands Bureau of Internal Revenue.

The USVI’s hotel room tax is 12.5 percent of the gross room rental, meaning it includes the gross room rate plus any additional charges such as energy surcharges and maintenance fees.

Crucially, the tax applies to every guest that resides in a hotel, villa, timeshare, inn or any other sleeping accommodation for less than 90 days.