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With little fanfare, a deal is moving forward to provide billions in tax dollars and tax breaks to an unlikely beneficiary -- the giant British liquor producer that makes Captain Morgan rum.

Under the agreement, Diageo in London will receive tax credits and other benefits worth $2.7 billion over 30 years, including the $165-million cost of building a state-of-the-art distillery on the island of St. Croix in the Virgin Islands, a U.S. territory.

Virgin Islands officials say the arrangement complies with the letter and spirit of tax law and will help the islands' sagging economy.

AlwaysOn has officially kicked off its first annual OnDC Top 100 Private Companies Competition. We are looking for top emerging private companies that are having the most impact on the public sector. This includes private companies that are demonstrating significant market traction and pursuing game-changing technology in the following sectors:

• Broadband Infrastructure
• Digital Education
• Enterprise
• Greentech
• Healthcare
• Security Services

I just returned from New Zealand—a land known for its geographic isolation—where I met with one of the nation’s premier web development firms. While the work done in New Zealand is on par with the best in the world, the price based upon current currency disparity makes it anywhere from 35- to 40-percent less expensive. Savvy e-marketers should look beyond the proximity of any opportunity when making any cost-benefit decisions. Prior to my voyage I attended the sixth annual E-Commerce Best Practices Conference.

As usual, this year’s program addressed a wide array of current issues facing the e-commerce industry, an industry that has shattered any remaining business barriers caused by geographic isolation. They covered user-generated content, and the monetization of both that and other social media. On the legal front, we learned about the issues surrounding minors’ online activities, e-commerce patents, content aggregation and trespass issues, new threats to cybersecurity, as well as cutting-edge litigation strategies for online businesses. E-commerce companies were advised about affiliate marketing over the Internet, doing business in China. We were educated about best practices for U.S. Internet companies establishing online stores in other jurisdictions.

My general impressions were that the world we are living in is indeed flat. E-tailers are no longer constrained by geographic locations. Rather, a reasoned analysis could open a plethora of money-making opportunities based upon a number of factors.

But for me, perhaps the most exciting part of the conference was the panel titled “Best Practices for Drafting Terms of Use.”  Not because I have any particular love of or interest in the finer points of contract law and negotiation (I let our lawyers handle that), but because the law firm tasked with moderating this particular panel, DLA Piper, recently did some work for my company, E-Commerce Island and the related UVI Research & Technology Park (RTPark). It was work which could also directly and significantly benefit profitable electronic retailers, such as those who are providing newsletters, SaaS, online games, ringtones and/or music subscription, digital photo hosting and licensing, online education, ad serving for online marketing, online dating, video streaming, customer support and other online products and services.

DLA attorneys analyzed existing federal tax code for guidance relevant to the types of businesses the RTPark is ideally set up to serve and attract (given one of the largest concentrations of global bandwidth and an historical role as a crossroads of commerce).  Several business models with standing income sourcing guidance were found, and they approached the Treasury in May and June of 2006 seeking its affirmation that the RTPark interpretation of federal law was correct. The Treasury responded favorably with temporary regulations in September 2006. Then, in April 2008, the Treasury’s permanent regulations were issued. Because USVI is a territory of the U.S, additional benefits of USVI-based e-commerce efforts include FDIC insurance as well as jurisdiction and IP protection under U.S. federal law.

So what does this mean for electronic retailers offering the above-mentioned kinds of online products? Up to 90-percent federal tax savings for income sourced in the (near-shore) USVI. These impressive benefits are all the more valuable given the administration’s recently toughening stance on off-shore corporate tax savings.

As is often the case, identical companies can significantly increase their value simply by the locations they choose to source portions of their activities from.

Steve Rohrlick is the master marketing agent for ECommerce Island, otherwise known as St. Croix, the largest island in the U.S. Virgin Islands, where superior infrastructure and tax benefits under the U.S. flag offer an ideal new home for eCommerce businesses.

Virgin Islands Exec: "eCommerce in Paradise Saves Taxes"

The U.S. Virgin Islands are located roughly 90 miles east of Puerto Rico, in the Caribbean Sea. The islands are known for their white sand beaches and clear blue water. But a new Virgin Islands based economic initiative wants e-businesses to know there are significant federal tax advantages to doing business there. This new initiative partners the University of the Virgin Islands with private technology providers. It’s called "eCommerce Island," and its chief marketing officer is Steve Rohrlick, who joins Practical eCommerce's Kerry Murdock.

After years of hard work, I am thrilled to launch ecommerceisland.com.  The website represents the RTPark on the largest of the US Virgin Islands, St. Croix.  We expect eCommerce Island, with superior infrastructure and tax benefits under the U.S. flag, to make an ideal new home for your eCommerce business.  Under the U.S. Treasury’s permanent regulations, the VI Bureau of Revenue offers up to 90% off of mirrored U.S. corporate tax rates and a 4% rate on dividends and royalties generated in the USVI. 

The RTPark is located within the NSA-standard Global Crossing facility where the global subsea Tier-1 fiber networks make landfall to create the second largest concentration of bandwidth in the western hemisphere.  Our strategic partners ensure smooth operations and benefits you won’t receive anywhere else, such as multiple redundancies to ensure quality connections.

As a territory of the United States with close proximity to the US mainland, the USVI helps you leverage near shore benefits, including protecting your intellectual property under the US flag and federal law and corporate tax incentives.