Moylan calls for referendum on BPT

Senator James Moylan (PNC file photo)

Senator James C. Moylan has introduced Bill 199-35 which would provide for a binding referendum in the 2020 general election to determine whether the Business Privilege Tax (BPT) should be reduced by 5% to 4%.

If the legislation passes, Moylan said island voters, and not elected officials, would determine the rate of the BPT moving forward.

The BPT increase was a heated issue in 2018, since it is an invisible tax, and its increase would correlate with the rising costs of goods and services. The 34th Guam Legislature initially adopted a measure to allow for a temporary increase of the tax, from 4% to 5%, and for it to sunset on September 30, 2018. The previous legislature also repealed the sunset provision and hence allowed the tax increase to remain indefinitely. The issue was a popular discussion during the 2018 elections with most candidates agreeing that the tax should be reduced.

At the start of the current term, Senator Moylan introduced Bill 9-35, which would reduce the BPT from 5% to 4%. Despite what he described as the “overwhelming” support for the legislation during the public hearing, Moylan said the legislation does not seem to be heading anywhere.

Suring the budget discussions, Senator Moylan twice attempted amendments to reduce the tax, but was challenged by technicalities on both occasions. If left in the hands of elected officials, Moylan said the tax will not be reduced.

“I am optimistic that my colleagues will respect democracy and allow the fate of this issue to be determined by the voters of Guam,” stated Senator Moylan in a news release. “As stated during the close of the budget discussions, this issue is far from its conclusion. I am hopeful that this legislature will find ways to reduce government spending, identify alternatives to increasing revenue, so that we can balance the budget while assuring that the BPT is reduced. This is not a one person effort, but a collective one, and I look forward to participating in the healthy discussions.”

Under the bill, if the referendum is approved, the BPT rate shall be reduced on January 1, 2021. Moylan said this would provide the current legislature ample time to address the financial impact. Bill 199-35 requests that the referendum be placed on the ballot for the 2020 general election to alleviate any new costs associated with holding a special election.