Finance opposes 3-year moratorium on B&Bs

NO MORATORIUM: Revenue and Taxation Director Tracy Norita testifies before the House of Representatives in opposition of a proposed moratorium for new bed and breakfasts in Saipan. Emmanuel T. Erediano/For The Guam Daily Post

SAIPAN – The Department of Finance Division of Revenue and Taxation opposes a measure that would impose a three-year moratorium on new bed and breakfast lodging operations on Saipan. 

Introduced by Rep. Joseph Leepan T. Guerrero, House Local Bill 21-32 states that the “rapid increase” in the establishment of B&Bs is making it difficult for the Finance enforcement team to find out if the operators are complying with the zoning laws, have an appropriate license, and are paying the hotel occupancy taxes.

Guerrero said it is necessary to impose a moratorium on new B&Bs so the enforcement division can review and assess existing ones, and identify illegal operators.

H.L.B. 21-32 notes that there are about 2,500 B&Bs that have already been operating on Saipan. This number should be enough while the government enforces license compliance, collects payment of appropriate taxes, and ensures zoning law compliance, the bill added.

But in her written testimony on Tuesday, Revenue and Taxation Director Tracy B. Norita said they oppose “restricting the growth of a popular market for tourist lodging that supports our growing demand for short-term accommodations.”

The three-year moratorium, she said, is unnecessary and overly broad in its application.

She noted that other jurisdictions that want to address concerns with B&Bs have implemented a short-term moratorium – six months or less – and its application was limited to areas zoned for residential purposes.

“We believe that this broad, long-term ban on new operations would negatively impact our economy and could hinder the tourism industry,” Norita said.

In addition, the measure “does little to curb operator abuse or address the issues that led to difficulties in enforcing the hotel occupancy tax, zoning and other laws,” she said.