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‘Exempt small businesses from gross revenue tax’
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Posted on May 20 2009
The chairman of the House Commerce and Tourism Committee has pre-filed a bill exempting businesses with annual total gross revenue of less than $50,000 from paying gross revenue taxes.
While the tax exemption will result in revenue loss for the government, Rep. Joseph C. Reyes said the funds not paid in gross revenue taxes would nevertheless be spent in the local economy and likely result in additional taxable income.
In a phone interview yesterday, Reyes said he’d rather see businesses that are not making much money to stay in operation rather than shut down operation altogether.
“This bill gives them an opportunity to continue their business…This is to alleviate hardship,” he told Saipan Tribune.
Reyes added that his bill is patterned after Guam’s Dave Santos Law.
House Bill 16-248 proposes the following tax schedule:
-$0 to $50,000 No tax
-$50,001 to $100,000 1% of the amount over 0
-$100,001 to $200,000 2% of the amount over 0
-$200,001 to $300,000 3% of the amount over 0
-$300,001 to $400,000 4% of the amount over 0
-$400,001 and over 5% of the amount over 0
Reyes said Public Law 12-32 or the Investment Incentive Act of 2000 encourages the development of additional and expansion businesses by offering developers tax incentives to build, expand and operate projects. But the incentives are limited to certain types of businesses and based on amo8nt of incentives.
He said small businesses are also critical to the CNMI’s economic recovery and strength but “there are no incentives for small businesses in the Commonwealth to keep their doors open, especially with the economic downturn felt worldwide.”
“The Legislature therefore finds it in the best interest of the CNMI to exempt businesses with annual total gross revenue of less than $50,000 from paying gross revenue tax,” he said in the bill.
H.B. 16-248, pre-filed on Tuesday, requires the secretary of the Department of Finance to promulgate regulations, revising and creating forms and other related documents necessary to implement the provisions of the bill pursuant to the Commonwealth Administrative Procedure Act.
