Guam senators narrowly pass amendment to cut business privilege tax

By Pacific Island Times News Staff

 The Guam Chamber of Commerce welcomed the senators’ vote in favor of Sen. Shawn Gumataotao’s amendment to cut the business privilege tax from 5 percent to 4 percent, effective Oct. 1, 2026.

The amendment, which was incorporated into the government of Guam’s 2026 budget bill, passed with eight votes.

 Voting “yes” were Republican Sens.  Tony Ada, Frank Blas Jr., Vince Borja, Shelly Calvo, Chris Duenas, Shawn Gumataotao, Jesse Lujan and Sabrina Salas-Matanane. Sen. Telo Taitague joined Democratic senators in opposing this future reduction.

The budget deliberations will continue through Aug. 20.

The chamber also commended senators for advancing immediate relief. 

Sen. Chris Duenas’ measure to reduce the BPT from 5 percent to 4.5 percent effective Oct. 1, passed with 11 votes—the same eight Republican senators joined by Sens. Tina Muña-Barnes, Joe San Agustin, and Telo Taitague—ensuring the voices of the private sector were heard.

“While these are important wins for Guam’s business community, the budget process is not yet complete,” the chamber said.

The chamber noted that the final budget bill will still have to go to the governor's desk.

Gov. Lou Leon Guerrero may sign it into law, allow it to lapse into law, or issue a veto.

"If vetoed, an override would require 10 votes," the chamber said. "We therefore urge chamber members to continue engaging with lawmakers to see BPT relief through to enactment.”

In his remarks at the session, Gumataotao said the amendment “does not simply reduce the BPT from 5 percent to 4 percent. It helps this branch of government regain public trust by restoring the 4 percent BPT rate.”

He noted that the BPT rate was raised from 4 percent to 5 percent—supposedly only for six months from April 1, 2018, until Sept. 30, 2018—to fill the revenue gap created by the Jobs and Tax Act of 2017.

What was intended as a temporary solution has become a permanent policy.

“With this amendment, the FY 2026 budget bill brings our island one step closer to truly prioritizing funding for public services in education, public safety, and healthcare - and Guam’s economy," Gumataotao said. “We cannot and should not prioritize growing the government over helping Guam’s struggling economy.”

Sen. Tina Muña Barnes, however, said Guam needed a more balanced approach to rolling back BPT.

Muna Barnes supported Sen. Sabina Perez’s failed amendment, which would have created a new taxation tier for an additional 20 percent of businesses on Guam, with a lower BPT rate of 4 percent. The top 15 percent of business earners would have continued paying the current 5 percent BPT rate.

“We need to find a common ground or meet each other halfway, and that’s exactly what this amendment offered,” she said. 

“It wasn’t about choosing between helping businesses or funding government services. We can do both if we do it right. This amendment would have made it happen," she added.

According to data from the Department of Revenue and Taxation shared with senators during the ongoing budget session, there are about 5,100 businesses on Guam.

Approximately 65 percent of local companies pay BPT at a rate of 3 percent of their taxable income, as they generate less than $500,000 in gross annual income. 

 “I hear it every day from our small businesses. They are doing their best to stay afloat. Costs are up across the board, and these Trump-era tariffs haven’t made things any easier,” Muna Barnes said.

“These small business owners and their employees need us to come up with practical solutions that work for everyone in our community.  We owe them this and more,” she added.

Muna Barnes said Perez's version of the tax cut would have reduced revenue by about $8.6 million, a much more manageable amount than the proposed $38 million to $40 million across-the-board cut.

“A $40 million hit to our budget? That’s not something we can absorb without serious consequences.  We’re talking about risking tax refunds, government operations, and critical services without saying where the money will come from,” Muña Barnes said.

  “I’m pleading with my colleagues to lead with good intentions and find a common ground that is reasonable, responsible, and sustainable, so we can give relief to businesses without risking tax refunds and critical government services.”