Guam – Local senators have just passed a bundle of generous tax exemptions for a single company on the one hand and crystallized a tax hike across the board on the other. These two bills are among 20 or so voted on in Hagatna on Monday morning.
Defying the Guam Economic Development Authority, the deliberative body approved Sen. Dennis Rodriguez, Jr.’s (D) Bill No. 363-34 (COR), for a modified qualifying certificate that would grant a 100 percent rebate of Core Tech Captive Insurance Corporation’s corporate income taxes and a 100 percent abatement of its business privilege taxes for 20 years. — a far more generous package than previously affirmed by the Development Authority board.
On Friday GEDA Administrator Jay Rojas lobbied the legislature to kill the bill in favor of GEDA’s already ratified QC for Core Tech Captive. In a letter to lawmakers, Rojas wrote that local law clearly caps “S corporations” like Core Tech Captive at a corporate income tax rebate rate of 75 percent.
Furthermore, Rojas argued that GEDA hadn’t recommended a BPT benefit for Core Tech Captive. Rojas asserted that although the governor is the final executive authority here, the Maga Lahi cannot sanction a QC containing non-GEDA changes.
Proponents of the senate version of Core Tech’s QC say it’s right in line with benefits presently provided to other insurers on Guam and could help spark a thriving captive insurance industry and create new jobs on island.
Meanwhile, senators also passed Bill 374-34 (COR) to fix a typo in the current budget law to clarify that the new property tax on improvements applies to all buildings worth $1 million or more. The clarification will reportedly safeguard $8 million in annual revenues for the Territorial Education Facilities Fund.