Tax break eyed for developers who use cultural designs

File photo shows Rep. Joseph A. Flores (Ind-Saipan), left, listening to then-Rep. Franklin R. Babauta (Ind-Saipan) during a House’s session.(Ferdie De La Torre)

Rep. Joseph A. Flores (Ind-Saipan) has introduced a bill that will provide developers in the CNMI an incentive through infrastructure tax credits when they incorporate local cultural characteristics into the development of new structures and tourism amenities.

Co-authored by members of the House of Representatives’ minority bloc, Flores’ House Bill 22-42 will amend the Commonwealth Code to authorize developer infrastructure tax credits for appropriate Chamorro and Carolinian culture designs.

The bill has been referred to House Committee on Ways and Means chaired by Rep. Donald M. Manglona (Ind-Rota).

Flores stated in the bill that incorporating the CNMI’s culture into the tourism infrastructure will enhance the uniqueness of the CNMI’s tourism product. By providing incentives for these types of development, this will enhance the presence of the culture in the environment where the community lives, he added.

Under his legislation, the value of any new development that the developer dedicates to Chamorro or Carolinian cultural designs shall be credited against its tax liability and shall apply to the appropriate trust account.

Such culturally appropriate designs must be concurred by the Department of Public Works, the Historic Preservation Office, and the Commonwealth Arts Council to ensure consistency and accuracy in the design.

In the event that the amount of tax credit exceeds the tax liability, the excess tax credit shall not constitute a right to a refund or be used as a credit toward future development projects.

Presently, the Developers Tax Credit provides four criteria of acceptable costs that can be credited against the 2% tax on the development cost. Under this legislation, a fifth criterion through an amendment of the Commonwealth Code will be added to deduct from the total tax liability the costs incurred in including culturally and historically relevant features in the development.

Flores said the Chamorro and Carolinian indigenous cultures are unique in the world and offer the international tourism marketplace an opportunity to expand their cultural experiences while in the Commonwealth. He said the cultural resources present in the CNMI are, however, underutilized in the marketing of the CNMI to prospective tourists, and their presence here provides limited opportunity to experience the islands’ culture.

The lawmaker said existing facilities do not represent the cultural art or images inherent within the islands’ heritage, and culture and designs of privately operated tourist attractions are without signifying characteristics that distinguish them from any other location in the world.