Tax proposed for gaming businesses on Saipan

Rep. Tina Sablan (Ind-Saipan) has introduced a local bill that proposes that a 10 percent gambling revenue tax on all gambling establishments on Saipan, including the casino at the still-to-be finished Imperial Palace Saipan.

Sablan said that her bill, House Local Bill 21-23, is not singling out a particular establishment.

“The proposed legislation does not single out any one taxpayer, although…the big elephant in the room not paying [business gross revenue tax], or corporate income taxes for that matter, is [Imperial Pacific International],” she said.

Other gaming establishments on the island are Club C, Club 88, and Saipan Vegas, in addition to the casino and hundreds of poker arcades.

The bill has yet to be assigned to a committee.

Sablan said any bills introduced has to sit on the House calendar for three legislative days before it gets officially transmitted to the local delegation for review and action.

Sablan said her bill emulates Rota and Tinian, which have their own taxes on gaming revenue.

“The other senatorial districts have gambling revenue taxes. Everywhere else in the rest of the world where there is gambling, there is a gambling revenue tax. We are proposing to do the same [on Saipan], to apply a gambling revenue tax to all gaming businesses, including but not limited to the exclusive casino licensee,” she said.

She pointed out that the local delegation is authorized to impose gambling revenue taxes on top of any other Commonwealth taxes that a gaming establishment is required to pay.

Sablan pointed out that her proposed legislation is relatively conservative. “Meaning [it’s] too generous to the industry. Some do not agree with the proposal to permit a nonrefundable tax credit for the licenses that gaming establishments currently pay.

“And some believe the tax should be assessed on gross, not net, gaming revenue. I do think these perspectives should be considered further in committee.”

Sablan said it is known that IPI has barely paid any BGRT for fiscal year 2019. “They [IPI] also owe tens of millions in corporate income taxes and community benefit fund distributions for previous fiscal years, according to the audited financial statements.”

She questioned what other business establishments in the CNMI get away with. “These are clear breaches of the exclusive casino license agreement and the responsibility falls squarely on the governor and his [CNMI] Lottery Commission to hold IPI to their promises and impose penalties.”

“[Penalties] including suspension of the license until they comply and pay all their taxes and obligations. The governor›s Lottery Commission has given IPI virtually every concession they have asked for. Perhaps it’s time to revisit that agreement and renegotiate more favorable terms for the Commonwealth.”