Guam – This morning the Guam Hotel & Restaurant Association expressed gratitude to its own members for joining the trade association’s crusade blitz against efforts by senators to increase the hotel occupancy tax from 11 to 13 percent in a forthcoming budget year beset by heavy projected revenue losses due to the federal Tax Cuts and Jobs Act.
Republican Sen. Jim Espaldon’s amendment to the General Appropriations Act for Fiscal Year 2019 to effectively increase the rate by 18.2 percent (from 11 to 13 percent) garnered enough votes for inclusion in the budget early last week, but senators changed their minds by week’s end following an outcry from visitor industry representatives.
So, for the time being, Guam’s FY19 budget contains no HOT increase, while senators retain a business privilege tax increase from four to five percent for assistance in shoring up an FY19 shortfall of about $145 million due to significant collective cuts to the corporate, income, and withholding tax rates engineered by the Trump Administration.
According to thebalance.com, the Tax Cuts and Jobs Act:
“…cuts the corporate tax rate from 35 percent to 21 percent beginning in 2018. The top individual tax rate drops to 37 percent. It cuts income tax rates, doubles the standard deduction, and eliminates personal exemptions. The corporate cuts are permanent, while the individual changes expire at the end of 2025.”
Meanwhile, local senators lean towards an aggressive regimen of collections of tens of millions of dollars of outstanding taxes in order to help make up the remaining deficit after their careful contemplation of government-wide spending cuts — pinning hopes on the advent of a new gubernatorial administration to be elected November 6th. So far, local lawmakers have committed to reducing the budgets of the Legislature and the Office of the Governor by about a million dollars each.
GHRA’s official statement follows.