GHRA thanks stakeholders for fending off HOT increase


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, 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.

Hotel Occupancy Tax (Update)
Hafa Adai GHRA Members!
Thank you for your support and efforts to work with GHRA to advocate against this legislation to increase the Hotel Occupancy Tax. As an industry and community, we were successful in getting the Hotel Occupancy Tax (HOT) reconsidered and rolled back from 13% to 11%.
I would like to thank the 34th Guam Legislature in recognizing the concerns of the industry. We applaud the Legislature in looking toward greater efficiencies within the Government and to live within its means. And, pushing to collect the outstanding Accounts Receivables at the Department of Revenue & Taxation (DRT) instead of raising HOT taxes.
TAF is not meant to subsidize the general fund! GHRA will be meeting with the Guam Visitors Bureau (GVB) to discuss the issues regarding the collections because the Legislature is looking to redirect funding with GVB. GVB and GHRA need to work with DRT to ensure they do their due diligence to collect the Supplemental Appropriations Revenue (SAR) to make up the shortfalls in Government.
As an industry and organization we need to continue working with all of the stakeholders, Legislature, Government of Guam, GVB, and community to ensure a clear understanding of the challenges of our eroding competitiveness within Asia. As an industry looking ahead, we need to have a balance and stability of markets, combined with affordability and accessibility, to ensure sustainability in growth.