15,000 small businesses to get tax cut if bill is signed into law
By Pacific Island Times News Staff
Guam senators on Friday passed a bill that would permanently increase the revenue threshold, or the amount of gross receipts eligible, for a 3 percent business privilege tax rate instead of the full 5 percent.
Under current law, businesses are only eligible for the BPT reduction on the first $250,000 of their gross receipts, provided their gross annual income is between $50,000 and $500,000 during the most recent tax year.
Bill 202-36, introduced by Sen. Mary Torres, would raise the threshold to the first $500,000, doubling the gross receipts eligible for a reduction in taxes.
According to the Department of Revenue and Taxation, approximately 90% of Guam’s 15,000 BPT filers report less than $500,000 in annual revenue and are eligible for this exemption.
“At the height of this pandemic, one in four of our local businesses faced closure, leaving the backbone of our economy at risk of breaking,” Torres said. “By permanently expanding the reduced BPT rate, Bill 202 will allow small business owners to keep more of their hard-earned money."
If enacted, the measure will go into effect on July 1st of this year.