Guam’s delegate in the U.S. Congress has introduced a bill that would create a federal law requiring the local government to pay tax refunds within 90 days of tax returns being filed.
This is the second of Del. Michael San Nicolas’ proposed federal laws that would affect local government operations. The bills have drawn some sharp criticism from local leaders. He also has proposed an amendment that would require a referendum before the implementation of any tax increase on the island. The governor called the referendum proposal “an affront to our locally elected Legislature and the powers granted to it through Guam’s Organic Act.” She said such an amendment “clearly undermines our authority to decide how we govern ourselves.”
Recently, San Nicolas said his proposals are what precipitated allegations of misused campaign funds.
Proposal: File tax return, get refund within 90 days
According to San Nicolas, HR 4262 specifically requires the government of Guam to process a tax return and pay the related tax refund within 90 days of the tax return’s filing, in contrast to the current court order to pay refunds within six months of the tax-filing deadline.
“This section basically means that if you filed a proper tax return in February, you will get paid in May, as opposed to waiting months longer up to the court deadline in October,” San Nicolas stated in the press release.
Additionally, HR 4262 compels GovGuam to follow its own local law with respect to making deposits into the Income Tax Refund Efficient Payment Trust, using the formulas adopted in the annual budget of the government of Guam.
Bill aims to compel senators to set aside enough money for refunds
“This second section entwines local law with the Organic Act with respect to how funds are set aside for tax refunds,” San Nicolas said. “This drafting enables the local government to control the formulas they wish to establish, but it compels the administration to follow the local law, rather than be shielded by the executive authority over how they handle cash,” he explained. “This structure ensures that local legislators are not let off the hook but rather empowered to compel the level of tax-refund funding they ultimately are responsible for,” San Nicolas added.
“Altogether, H.R. 4262 will ensure our people get paid for a timely filing, while our local government is empowered to compel the money be made available as currently prescribed by local law,” he said.
San Nicolas said his office will update the people of Guam on the progress of HR 4262 as it moves through the House of Representatives.