Guam – Department of Rev &Tax Acting Director John Camacho explains the difference between the $209 million dollar tax refund figure he gave the legislature and the $287 million dollar figure given by Governor Calvo during his weekly address.
When Governor Eddie Calvo announced Monday that “The Government of Guam owes you $287 million in tax refunds,” Senator Ben Pangelinan shot back that Department of Rev & Tax’s Acting Director John Camacho had recently testified that only $209 million was owed in taxes.
So why the difference?
The Rev & Tax Director explained “I’m giving a figure as of January 26 when the $287 is as of September 30 2010.”
Camacho also said that his figure was only based on “income” tax refunds that are owed and the $287 million dollar figure was based on a tax liability report the governor cited that included the liability for the making work pay credits and the EITC settlement. “When we go back and we add the making work pay credit basically around $61 million of December 31st and when we go back and add the $17 million that was paid off from October 1st to present and then the $3.2 million remaining under the EITC settlement fund we’re gonna be roughly within that range and when I was adding it up it was about 290,” explained Camacho.
But this $287 or even $290 million dollar figure is a total tax liability figure not the actual amount owed to taxpayers for refunds. That amount is $209 million dollars as Camacho indicated to lawmakers earlier this week. So was the governor wrong? It’s really a matter of what the governor meant when he said GovGuam owed “287 million in tax refunds.” If he meant total tax liability which includes the making work pay credit and the EITC then he’s correct, but if he was referring to actual tax refunds owed to taxpayers then that number is around $209 million. In fact the $61 million in making work pay credits is not the amount that is owed to taxpayers it’s the amount of money that the federal government has given to GovGuam for the making work pay credit. “We receive this money in advance and if I’m not mistaken by 2013 any unused funds that we received in advance we would have to return back to the U.S. Treasury,” said Camacho.
Also, Rev&Tax hasn’t determined and can’t yet determine how much of the making work pay credits if any will have to be paid back to the U.S. treasury. They won’t know this until they are done processing and paying all tax refunds for 2009 and 2010. Even then there is always the possibility that the U.S. treasury will actually owe GovGuam. “Oh yes that’s also possible in the event part of the MOU is that if they understated our projection or our estimation was understated then we would have to make that claim with the U.S. treasury and they would re-imburse us for that money,” said Camacho.
The acting DRT director says they have processed roughly 15 thousand tax returns for 2009 leaving about 40 thousand returns left before they can determine the actual liability if any for making work pay credits for 2009.