Public hearing held for homeowners association BPT bill


Yesterday, the 36th Guam Legislature heard public testimony for a bill to provide homeowners associations a business privilege tax credit.

PNC’s Damen Michael has this story…

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Introduced by Senator Frank Blas Jr., Bill 258 – 36 aims to specify the homeowners association as part of the authorized corporation, associations, or societies exempted from business privilege taxes.

Under Guam Code Annotated, HOAs are by default characterized as non-profit due to the nature of the association not to make a profit but to maintain and govern.

The H.O.A has been organized as a not-for-profit body in the bylaws and articles of incorporation towards operating for the community it serves, according to attendees to the public hearing.

Paul Pablo, a tax commissioner for the Department of Revenue and Taxation, read his testimonies where DRT has a neutral ground on the matter regarding nonexempt and nonprofit.

Currently, DRT has compelled the H.O.A to pay business privilege tax due to most not falling within the IRS section 501 chapter 3 exemption. They are, however, still eligible for IRS section 501 chapter 4 exemptions.

Understandably, this status causes confusion between being tax-exempt and non-profit providing an entirely different and unrelated correlation.

In his closing remarks, Blas states that he appreciates DRT’s collaboration in helping clean up the books on these subject matters. He adds maybe this will help identify some flaws within our long-lasting tax statuses.