Funding for Guam tax refunds expected by Sept. 11

OFFICIALS: Doug Domenech, left, Department of the Interior assistant secretary for insular and international affairs, and Office of Insular Affairs Director Nik Pula, speak to The Guam Daily Post after they visited the governor's office in Adelup in April 2018. David Castro/The Guam Daily Post

Tax refunds for those still waiting may be on the horizon when the government of Guam receives about $69.9 million in Section 30 funds by Sept. 11. 

Historically, a bulk of the Section 30 reimbursement is used to pay tax refunds after payments for various bonds are made. Adelup spokeswoman Janela Carrera said the governor’s finance team hasn’t determined how much will be set aside this year for tax refunds.

This week, the administration mailed $1.3 million in tax refund checks to taxpayers who filed on or before Feb. 19. By court order, the government has to pay tax refunds by Oct. 15 for those who filed returns by the April 15 deadline. The government has six months to pay refunds to those who filed after April 15.

Douglas Domenech, assistant secretary at the Department of the Interior Office of Insular and International Affairs, said the total amount that was actually due to Guam was $88.3 million — which is a combination of the estimated Section 30 funds for fiscal 2020 and about $7.3 million in adjustments from previous years. 

In mid-September 2018, more than $60 million in tax refund checks were issued following the release of Section 30 funds. This year's tax refund amount out of Section 30 funds hasn't been confirmed.

Taken off the Section 30 total, however, is the $18.3 million for the World War II Claims Fund for those who suffered during the war. The federal bill that would allow those funds to be distributed has yet to be heard by the Senate.

“The notice underscores the importance for the Senate to act on H.R. 1365. If there is no action then the funds transferred to Treasury will continue to sit dormant in the Guam World War II Claims account,” Gov. Lou Leon Guerrero stated in a press release.

Section 30 is a reimbursement remitted to the local government for federal employees working in Guam whose taxes are collected by the IRS.

When then-Del. Madeleine Bordallo wrote the law to compensate those who suffered during the war and their descendants, the Section 30 moneys were supposed to be a place holder until she could find another source, which didn't happen.

As it stands, the federal government is taking Section 30 amounts over $68.6 million and setting them aside in the WWII fund. The federal government also takes 5% of moneys as the fee for administering the fund.

“To date, we estimate that well over $20 million is in the account,” the governor stated. “Our administration pursued a local program to advance payments to War Survivors with adjudicated claims, recognizing that time is running out for our survivors of occupation. And in the absence of any progress by the Senate on H.R. 1365, I will continue to encourage our Guam Legislature to pass Bill 181-35 which enjoys bipartisan support.”

The governor also said she has faith Guam Del. Michael San Nicolas “will remain focused on this very important legislation.”

“While we are concerned that he may be distracted with other matters, I trust that Congressman San Nicolas is working closely with the Senate Judiciary Committee to pass this legislation when the Senate reconvenes next week,” the governor said in the press release. “I have written multiple letters to Congress and will continue to appeal for the swift passage of H.R. 1365 when I visit our nation’s capital next month.”