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DOI helps NMI get rebate federal taxes
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Posted on Oct 11 2004
The Department of the Interior said it is helping the CNMI government claim its long overdue rebate of federal taxes, duties, and fees collected from CNMI residents since the mid-70s.
In a recent letter to Gov. Juan N. Babauta, DOI deputy assistant secretary for insular affairs David Cohen said that the department has followed up the issue with the U.S. Treasury to ensure the speedy release of the payments.
“As you know, I have requested the Treasury Department to expedite an accounting of past amounts which may be due and a timetable for making these payments to the CNMI,” Cohen said.
He said that Treasury officials “informed me that they are conducting an in-depth review of this complex issue, including the estimated numbers your office recently supplied,” he said.
He noted that while Norton and himself “are sensitive to your request for a speedy resolution of these payments,” the Treasury Department has the authority in determining a final accounting of funds due to the CNMI under section 703 (b) of the Covenant.
“I assure you that DOI will continue to work closely with your administration to resolve this matter at the earliest possible opportunity,” Cohen said.
Since 2002, the Babauta administration has been pursuing to recoup taxes that CNMI residents have paid to the federal government.
The administration said that over the years, CNMI soldiers and federal employees based in the Commonwealth have forked out tax obligations that should have been channeled to local coffers.
The Executive Branch could not immediately reveal the amount of taxes due the CNMI, but initial estimates showed that the amount would be in the “multi-million.”
Early this year, the administration disclosed that it received some $210,000 “cover over” tax funds from federal coffers.
The Attorney General said that that under the terms and provisions of the Covenant to establish the Northern Mariana Islands, “the CNMI is entitled to cover over tax funds paid into the U.S. Treasury by CNMI.”
This came about after Babauta reportedly entered into an understanding with the federal Treasury in connection with the payment of the funds.
