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Law exempts government-acquired properties from tax
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Posted on Aug 18 1999
Land owners who sell their real estate to the government is now exempted from paying taxes after Gov. Pedro P. Tenorio signed into law a proposal seeking fair treatment in land transactions in the Commonwealth.
The newly-signed law clarifies provisions of Public Law 11-36, which relieves taxpayers from the tax burden in the purchase of their land for public use.
According to Tenorio, this measure improves and compliments the intent of the initial law which failed to take into consideration its impact under the NMI Territorial Income Tax.
“It also provides fairness to those taxpayers that have to pay income tax on the gain from the sale of their private land to the CNMI government for public purpose,” he said in signing it into PL 11-93.
The measure was offered by Senators Pete P. Reyes, Paul A. Manglona and Juan P. Tenorio.
The government originally assessed tax on the sale of the private lands for public use, a policy which legislators said was an injustice to property owners since they were returning portion of the payment back to the local coffers.
The new law is an attempt to put in place an equitable tax structure in the land compensation system of the government so that those who opt for cash payment, instead of land exchange, will not be shortchanged in the transaction.
