Tax break bill heads to voting file
By Pacific Island Times News Staff
A measure to help businesses keep more of their hard-earned money was sent down to the third reading file to be voted on by Senators later this week. Bill 202-36 , introduced by Senator Mary Camacho Torres, would permanently increase the Business Privilege Tax (BPT) revenue threshold, i.e., the amount of gross receipts eligible for a 3% BPT rate instead of the full 5%.
Currently, 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. 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. Based on the latest Consolidated Revenue and Expenditure Report, Torres noted that BPT collections are currently above adopted revenue levels, meaning the bill should not result in any revenue shortfall. Further, because the fiscal impact falls below the U.S. Treasury’s de minimis threshold, the bill should not impact or violate the provisions of the American Rescue Plan Act of 2021. “Our small business community has collectively been impacted by the COVID-19 pandemic, and although we talk about this as something that reduces government revenue, this will increase the success rate of our small businesses,” stated Torres. “I thank my colleagues for their time, and I ask for support on this bill so we can allow our businesses to keep more of their hard-earned money.” Bill 202 is co-sponsored by Vice Speaker Tina Rose Muña Barnes, Senators Joe S. San Agustin, Jose “Pedo” Terlaje, Christopher M. Dueñas, V. Anthony Ada, Frank F. Blas, Jr., and James C. Moylan. If enacted, the measure will go into effect the first day of July at the Department of Revenue and Taxation’s request.