Previous Story
House panel tackles Hillblom estate tax
|
Posted on Dec 11 1998
The House Ways and Means Committee begins deliberation today on a proposed bill that will seek to impose local tax on the inheritance from the multimillion dollar estate of the late Larry Hillblom as part of revenue-generating measures of the government.
Its chair Rep. Karl T. Reyes said the panel will amend provisions on Public Law 10-10 to indicate references on estate taxes under the United States Internal Revenue Code — a requirement to enable the CNMI government to generate additional income.
“We just want to correct the existing law to be consistent with the taxation of any estate to reflect the true reference to the U.S. code,” the legislator said in an interview yesterday.
Under House Bill 11-326, local tax will be assessed on the estate situated on the island equal to the amount of any of the maximum allowable credit for foreign death taxes as provided in the U.S. tax code.
According to Reyes, the island government has to pass the legislation to gets its share from the federal estate taxes, which will amount to 16 percent out of the 55 percent under the IRS system.
But he said it will not necessarily raise revenues for the CNMI since “if an estate is taxed, then it will also have reference with the local system requiring that the local government recognizes the tax imposition of the federal government.”
The measure, introduced last month by Reyes, is being rushed by the legislature in light of possible settlement of the Hillblom estate — valued at more than $500 million — among his heirs who come from different countries.
“We would also like to be considered as foreign entity under the estate tax system of the United States,” he explained. “We want that recognition so that when the federal government imposes estate tax, it will leave something for the CNMI.”
Local lawmakers also hope that the proposed bill will help the government boost its dwindling coffers amid the worsening economic crisis here as the Hillblom estate is anticipated to yield at least $40 million in taxes.
