Previous Story
Estate tax bill set for House vote
|
Posted on Dec 14 1998
The House of Representatives is expected to pass a revenue-generating bill that will impose a local tax of up to 16 percent on the estate of island residents inherited by their heirs, according to legislators.
Rep. Karl T. Reyes, chair of the House Ways and Means Committee, said the measure pending before the panel will cover the multimillion dollar assets of the late Larry Hillblom.
If the Hillblom estate in the Northern Marianas is pegged at $200 million, the island government will earn at least $30 million in tax assessed under the proposal, he said.
“It could be bigger money,” Reyes told in an interview Friday after meeting with members of the Ways and Means Committee to discuss House Bill 11-326 for possible immediate action on the floor.
The measure, proposed by Reyes, is the first attempt by the CNMI to tax estate situated on the island following the death of Hillblom in 1995 in a plane crash.
The government is looking at additional income from the local tax which is equal to the amount of any of the maximum allowable credit for foreign death taxes under the United States Internal Revenue Code.
“It is perfect timing,” Reyes explained. “We have to have the law in place so that we can generate money for the government.”
Since it will amend Public Law 10-10 or the so-called Hillblom bill, the provision will allow the government to impose the tax which is equivalent to up to 16 percent out of the 55 percent in federal tax as provided in the IRS system.
The CNMI Legislature is rushing passage of the bill in light of possible settlement of the Hillblom estate — valued at more than $500 million, including assets worldwide — among his alleged heirs from different countries.
According to Reyes, the money is an additional income for the cash-strapped government particularly at this time when revenue collections have continuously dropped in recent months as a result of the worsening economic crisis on the island.
Gov. Pedro P. Tenorio’s administration is scrambling for funds to meet the anticipated shortfall in the 1999 fiscal budget which at latest estimate could reach $32.5 million.
