The Internal Revenue Service published IRS Notice 2006-76 August 29, 2006. This early Christmas gift to the software industry confirms the application of Section 937(b) and Temp. Tresuary Regulation Section 1.937-2T. More particularly, a software developer can incorporate in the United States Virgin Islands and receive very lucrative tax benefits. The U.S. Virgin Islands EDC program allows beneficiary to only pay 10% of their customary federal income tax liability and be exempt from all other taxes. What a deal!

The IRS goes further in its notice to provide that the software can be loaded onto compact discs in the territory and shipped to customers in the United States and throughout the world or downloaded by the customers from the developers server in the territory.

For more information on the U.S. Virgin Islands Economic Development Program, please contact Tom Bolt, Tom Bolt & Associates, P.C., Attorneys at Law, Corporate Place, 5600 Royal Dane Mall, St. Thomas, VI 00802-6410 (www.vilaw.com [1]) [Email: tbolt@vilaw.com/Telephone (340) 774-2944]