Recent Moylan bill would temporarily suspend liquid fuel BPT

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Liquid fuel BPT accounts for approximately $6 million annually, according to Senator Moylan.

Senator James Moylan has introduced a bill to temporarily suspend business privilege taxes (BPT) for liquid fuel.

The government sets the BPT by statute. Accordingly, Moylan told PNC the government can also remove, or in this case, suspend that statute. In effect, Bill 290-36 would give people a “holiday” on the BPT relative to liquid fuel rather than removing it altogether.

“This is the gas that you have at the pumps,” said Moylan. “There are other types of fuels, but we’re specifically talking about what’s at the pumps. So, we’re saying, ‘Put it on holiday. We need to pass those cost-savings to the consumer.'”

He added there are some things that the government cannot control.

“How it’s shipped here, where we purchase our fuel, the overall global market–we can’t control that,” said Moylan. “But what we can do is control it [the price of gas] with the taxes that we place.”

Transparency

The bill also requires businesses to report the BPT on receipts. Normally, it is not explicitly listed on a receipt because its cost is factored in the price of the merchandise.

Its value is determined by the gross receipts that a business pays for doing business on the island.

For example, said Moylan, if the price of fuel were $6, the average BPT would be 30 cents. However, said Moylan, “If Bill 290 becomes law, the BPT [for gas] would be $0.”

Concerns

GovGuam officials have expressed their concern over which departments and funding sources would be affected by this “holiday” on liquid fuel BPT.

“We’re going to lose some taxes, yes, possibly $6 million annually, on just the gas pump,” said Moylan.

But he argued that the harm would be short-lived. Currently, he said, the government of Guam is above its fiscal projections “by approximately $60 million.” In other words, Guam has about $60 million in cushioning. “Basically, we over-taxed our people,” Moylan added.

Although Guam has introduced several programs to reduce the effects of the rising cost of fuel, such as Prugråman Salåppe’, not all residents of Guam are eligible.

In a sense, said Moylan, the bill widens qualifications for relief.

 

Below is Bill 290-36 as of April 15, 2022:

Bill No. 290-36 (LS)