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Guam creates tax incentives to boost hotel rooms
HAGATNA, Guam (AP)—Guam has created tax incentives to encourage developers to build 1,600 new hotel rooms in the next five years with a new law enacted Wednesday.
The law will also provide tax incentives for existing hotel owners to expand their facilities, the Pacific Daily News reported.
The steps will help the U.S. territory compete with other tourist destinations, officials said.
“It was absolutely necessary to provide an incentive,” said Mana Silva Taijeron, deputy administrator of the Guam Economic Development Authority.
Developers would receive a tax abatement, an exemption, and a rebate equal to 10 percent of their total construction costs.
The law calls for the incentives to end in 2020 or when 1,600 rooms are built. The incentives would also end if the U.S. includes China in a visa waiver program allowing people to travel to the U.S. without a visa for 90 days or less.
Developers will be able to use their incentive in one of four ways.
They may claim a 75 percent income tax rebate for 20 years, 50 percent business privilege tax credits for 20 years, or 100 percent real property tax abatement for 10 years.
The fourth tax option would be to claim a 100 percent exemption from the use tax on furnishings and equipment within the first year of a hotel’s operation.
The Guam Economic Development Authority must submit a proposal regarding investments to the Legislature within 60 days.
