Tax refunds mailed out today

The Department of Finance will release tax refunds for 2007 beginning today.

Press secretary Charles P. Reyes Jr. announced yesterday that the Finance Department is ready to mail out local tax refund checks totaling $3 million. Eligible taxpayers are those with tax withholding that exceeded their tax liability for Tax Year 2007.

The distribution represents the first batch of tax refund payments to be mailed this week. More checks are expected to be released later.

Finance Secretary Eloy S. Inos has said that about $10 million to $15 million in CNMI tax refunds and rebates will be released for the previous tax year. The 2007 tax rebate checks will be mailed out in about two weeks.

“I have directed the Secretary of Finance to expedite the release of these tax refunds and rebates to help our struggling taxpayers and consumers cope with our economic downturn and our increasingly higher cost of living,” Gov. Benigno R. Fitial was quoted as saying in a press release issued by the administration.

Fitial also expects the tax refund and rebate releases to have a positive effect on struggling small businesses.

The local refunds and rebates will be paid with “cover-over” funds that the CNMI government had recovered from the U.S. government.

Toward the end of 2007, the Commonwealth reached a settlement with U.S. Department of Treasury on the dispute over federal taxes that the U.S. government failed to transfer—or “cover over”—to the local government. The CNMI received $26.4 million from the settlement. Before that, the CNMI got $6 million also in cover-over funds.

The administration has set the money aside for the payment of tax refunds and rebates, excluding it from the budget resources identified for government operations.

The release of the tax refunds comes on the heels of the distribution of federal “economic stimulus” checks, totaling $16 million. Reyes quoted Inos as saying that 85 percent of the stimulus checks had now been issued to taxpayers. Although 15 percent of eligible taxpayers may not have received their federal stimulus checks because of tax filing errors or complications, the Finance Department expects 100 percent of stimulus check payments will be made after all of the tax filing requirements are met.

Earlier this month, the Finance Department also began sending out checks for the federal child tax credit. The U.S. Internal Revenue Service granted a total of $2.6 million for eligible families in the Commonwealth.