$7.9M tax lien filed vs IPI

The CNMI government has filed another federal tax lien against Imperial Pacific International (CNMI) LLC, stating that IPI owes the CNMI over $7.9 million in taxes dating back to 2017.

The CNMI Division of Tax and Revenue filed yesterday another federal tax lien against IPI alleging that the casino investor owes the CNMI approximately $7,943,060.39 in unpaid Business Gross Revenue taxes from December 2017 to December 2021.

Back in August 2020, the division’s collections manager, Richard Santos, filed a tax lien against IPI in federal court for allegedly failing to pay $9,416,887 in BGRT for the tax period from 2017 to 2019.

In related news, IPI has filed its own federal suit against the Commonwealth Casino Commission, alleging breach of the Casino License Agreement or CLA.

IPI, through attorneys Stephen Nutting and Michael Chen, is accusing CCC of unconstitutional impairment of contract and violation of the contracts clause of the U.S. and CNMI constitutions. IPI is also alleging violation of the takings clause, and violation of the due process clauses of the U.S. Constitution.

As relief, IPI is demanding a jury trial and declaration stating that IPl is exempt from or not subject to the terms of the regulatory fee because of the terms of the CLA entered into by IPI and CNMI prior to the enactment of the annual regulatory fee statute.

IPI also wants the court to issue an injunction against CCC, preventing the enforcement of the regulatory fee statute and collection of the annual regulatory fee against IPI, or mandating that CCC exempt IPI from the annual regulatory fee.

In addition, IPI requested the court to issue a declaration stating that the regulatory fee statute, as applied to IPl, is unconstitutional.

IPI also wants the court to order CCC to pay restitution for all the regulatory fees that IPI had paid in the past.

Moreover, IPI is asking for a court order directing CCC to vacate, nullify any and all adverse administrative decisions against IPI that were based upon the annual regulatory fee statute, including the imposition of fees, interests and penalties for failure to pay the annual regulatory fees; as well as the suspension of its license based upon the annual regulatory fee statute.

According to the complaint, the CNMI and IPI had an existing contractual relationship that provides IPI with certain contractual and property rights to operate a casino in the CNMI in exchange for substantial compensation to the CNMI.

IPI alleges that, acting under the color of Commonwealth law, the CCC, as an agency of CNMI, substantially deprived IPI of its contract rights, in violation of the U.S. and Commonwealth constitutions, the lawsuit stated.

“The Regulatory Fee Statute imposed additional fees for doing business in CNMI, which constitutes a substantial and unconstitutional impairment of the CLA. IPI was and is still required by CCC to pay the $3 million annual regulatory fee as a prerequisite to exercising its existing contractual and property rights set forth explicitly in the CLA, rights for which it already has compensated the Commonwealth,” the lawsuit stated.

In essence, IPI says CCC is double-charging IPI.

IPI also claims that the actions of the CNMI in enacting and CCC in implementing the annual regulatory fee were and are arbitrary, capricious, and unreasonable.