Saturday, February 13, 2010

Cruz: Guam must enjoy revenue perks

Cruz: Guam must enjoy revenue perks

Wednesday, 10 February 2010 04:08
by Therese Hart | Variety News Staff

VICE speaker BJ seeks reassurances from the U.S. Congress that Guam will reap the maximum amount of local tax revenues to be generated by the military buildup from federal contractors.

He is also soliciting the assistance of Congresswoman Madeleine Z. Bordallo.

Cruz forwarded several letters to Bordallo relaying his concerns about the government of Guam’s ability to collect buildup related tax revenues and asked for special language in the 2012 National Defense Authorization Act to support Guam’s tax collection efforts.

Cruz is requesting that language be secured in the federal budget act that would require each federal construction contract to designate Guam as the designated place of origin and that all associated income related to the buildup, including corporate bonuses, be designated possession source income, without any special exemption and that Department of Defense cooperates with local tax officials.

Cruz said there are many issues concerning the process of collecting corporate and individual income taxes and particularly taxable income related to projects for corporations and individuals who file outside Guam.

Cruz pointed out that in May last year, Secretary of the Navy B.J. Penn indicated that at the local level, the government of Guam is responsible for collecting local tax revenues.

“It is only fair that steps be taken at the federal level ensuring that the windfall from the contracts related to this buildup enjoy the full scrutiny of local tax enforcement,” said the vice speaker.

In response to Cruz, Bordallo wrote that she would keep his suggestion for legislation in mind as she begins proposals for inclusion in the 2011 National Defense Authorization Act.

However, Bordallo said she will await the results of the report from the Department of Defense before she takes further action. She believes that the report will assist her in developing more accurate and comprehensive legislation.

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