Guam legislature advances tax-amnesty authorization despite objections over lost penalties

The Committee of the Whole advanced Bill 231 on a recommendation to place the measure on the third-reading file after an extensive round of amendments and floor comments.

Senator Tydegui, the bill sponsor, read an amendment specifying that the Department of Revenue and Taxation (DRT) may establish and administer a tax amnesty program only after the DRT director, in consultation with the Bureau of Budget and Management Research, issues a written determination that one of three criteria is met: projected general fund revenue shortfalls, a significant volume of delinquent or aged liabilities not collectable through standard enforcement, or economic conditions materially impairing taxpayers’ ability to pay. "The Department of Revenue and Taxation is authorized to establish and administer a tax amnesty program commencing at the direction of the gov of Guam Department of Revenue and Taxation," she read aloud during floor proceedings.

Lawmakers debated multiple amendments to narrow eligibility and to let DRT set fees and administrative limits. One amendment added authority for DRT to assess a "reasonable cost-based administration processing fee" and to stagger application intakes to ease operational burdens; that change passed without objection. Another amendment removed employer withholding taxes from amnesty eligibility so employers would remain liable for withheld wages; that change also passed.

Opponents repeatedly warned the amnesty could waive large sums in penalties and interest. Senator Barnett said the package risks creating "another handout to entities that I don't think deserve or need it," citing concerns that the bill could benefit large corporations and certain tax types that fund critical programs. Senator Tula'i and others noted DRT testimony that much of the delinquent tax stock could be collectible under existing programs and questioned whether the waiver of penalties would simply reduce government revenue. "We are going to lose $62,000,000 in revenue at a minimum," one senator warned during debate, referring to penalty-and-interest waivers in some categories.

Proponents argued the tool can recover revenue that otherwise goes uncollected. Senator Kumatata and Ranking Member Tina Rose Munoz Barnes referenced the 2018 amnesty that collected about $30.1 million from roughly 900 delinquent taxpayers and said a modern amnesty could help fund critical services without raising tax rates. "If we are serious about the funding critical services, then we must be equally serious about collecting what is already due," Ranking Member Barnes said.

After debates over several targeted amendments, the committee voted to recommend placement of Bill 231 on the third-reading file. The formal motion to place the bill on third reading was moved by Senator Snugstein and carried on the floor.

What's next: the recommendation advances the bill toward a final floor vote; the third-reading file is expected to include the committee-adopted amendments. Lawmakers said fiscal oversight and budget impacts will continue to be a topic as the measure moves forward.