The Department of Revenue and Taxation will hold off on enforcing the property improvement tax valued at $1 million or more for 2019, a decision that Public Auditor Benjamin Cruz said will result in government deficit.
The new real property tax was included in the 2019 appropriations act, which lapsed into law on Aug. 2 without the governor’s signature.
Public Auditor Benjamin J.F. Cruz said stalling the implementation of this levy will bring the government of Guam a “self-inflicted deficit in the current fiscal year and risk costly litigation should it attempt to properly enforce the law in the future.”
“Unfortunately, I am told that certain parties within the Department of Revenue and Taxation have attempted to nullify this section of law through delay, arguing instead that the absence of an expressed effective date in this section allows for individual interpretation. This is not the case,”
Cruz wrote Gov. Eddie Calvo reminding the administration of a similar issue involving the implementation of tobacco taxes that the Attorney General’s office provided advice on.
“Section 3, Chapter I of P.L. 34-116 is the law of the land. This is a fact the Attorney General of Guam recognized when she advised DRT on a substantially similar issue in the same legislative act — the implementation of Tobacco tax increases,” Cruz said.
“In that instance, as in this one, I believe the AG's verbal advice to DRT on Aug. 31 is clear — where no effective date is expressly stated; the provision is effective upon enactment. This means that all qualified improvements have been subject to this additional tax since the enactment of P.L.34-116,” Cruz said.
Cruz is requesting the governor to provide an updated real property tax roll properly reflect the additional levy on qualified improvements. Otherwise, he added, DRT must refrain from the publication of the updated real property tax roll until such time as it has received expeditious guidance from the Office of the Attorney General.
“As governor and the Organically recognized tax commissioner, I ask that you act now— preventing a needless crisis before it begins.” Cruz stated in the letter.