Saipan repeals 15-cent viewer’s tax

Saipan legislators on Friday finally repealed a one-year law that imposed a 15-cent tax on every rental of video tape and each movie ticket following months of debate on whether to scrap it or not.

House Local Bill 11-15 offered by Rep. Heinz S. Hofschneider now heads to the governor for his consideration after the Saipan and Northern Islands Legislative Delegation voted 9-2, with one abstention, in favor of the repeal of Saipan Local Law 11-1 or the Viewers Tax Act of 1998.

The move was prompted apparently by a backlash from both video store owners and consumers on the island who were caught by surprise when the local legislative body passed the law last year in efforts to raise funds for proposed youth centers on Saipan without a public hearing.

Hofschneider, SNILD chair, told members there was a petition signed by opponents of the law to persuade them to repeal what he considered a “one-sided” imposition of tax.

He maintained his proposal would benefit families who rent video for their own entertainment needs and could not afford cable television at this time of economic hardships.

Although he abstained from voting, Rep. David M. Apatang, proponent of the 15-cent tax, believed that an alternative solution would take care of the youth program as considered by the House of Representatives under a new bill that will tax winnings in poker jackpot.

“We have not seen any revenues from the (Viewer’s Tax law) because it has not been enforced yet,” he said during the session Friday. “Fifteen cents is not too much to support our youth.”

Lawmakers had been fighting since July over whether to repeal the law and the bone of contention between opposing sides was on the impact of the 15 cents added on the video rental rate and the price of the ticket.

Those against the tax believed it is a burden to consumers, especially to parents who have to shell out additional money to pay for their children’s entertainment expenses.

Several video stores on the island had also asked their customers to lobby against the additional fee which was passed onto them.

But those in favor stressed its benefits to the community as funds generated from this revenue are intended for the development, construction, maintenance and improvement of all youth centers on the island.

In voting against the measure, Rep. Karl T. Reyes argued the tax is “very minimal” to harm the public, noting that most video renters on the island are contract workers who don’t otherwise contribute that much to the local economy through higher taxes.

“We should not repeal at this time when we need the money most,” he said.