Senate rejects amendment to expand business-privilege tax on military build-up construction contracts

Senator Tydigwu offered a floor amendment meant to clarify Guam's business-privilege-tax (BPT) treatment of military build-up construction contracts and to remove a $10 million threshold that had been added last year. "This does two things: it removes the $10,000,000 threshold and improves the law by replacing the general reference to military contracts with a military build up construction contracts definition," the sponsor said.

Senator Parkings objected to the earlier rollback of the BPT and urged the body to restore a higher BPT on military projects, arguing the buildup is a "once-in-a-generation opportunity" that should yield revenue for Guam. She first proposed an amendment to the amendment to set a 6% BPT, then said she would accept returning to 5% to restore prior treatment. That amendment to the amendment failed on a floor indication vote.

Opponents warned the change could harm local businesses that supply the contractors and underscored the complexity of subcontractor relationships. "We should not sink our homegrown workforce on base and off," Senator Mittata said, arguing tourism and local firms rely on stability in the procurement environment. The sponsor replied that primary DOD contractors effectively have the 5% BPT built into contracts and that double taxation of subcontractors would not occur.

Fiscal figures were invoked on both sides: the sponsor cited roughly $930,000,000 in additional DOD dollars expected on-island in the next year; elsewhere members noted BPT tracking above adopted levels in recent reports. After extended debate and objections, the floor recorded the amendment as failed. No statutory change was adopted on this point during the session.