Gov. Ralph DLG Torres signed into law Friday a bill to exclude local stimulus payments from taxation. House Bill 22-81, HD1, authored by Rep. Angel A. Demapan (R-Saipan), is now Public Law 22-15.
Demapan, who is the House of Representatives minority bloc leader and was present at the signing of the legislation in Torres’ office, said that taxing the local stimulus payments would be inconsistent with the objective of the stimulus plan, undermine the purpose of the stimulus plan, and would only create additional burden on people.
This new law, he said, will help people recover from the economic hardship brought about by the COVID-19 pandemic.
The lawmaker thanked Finance Secretary David DLG Atalig and his team for working with him on putting together this legislation. He also thanked his colleagues in the House of Representatives and Senate for unanimously supporting passage of this legislation, and Torres for signing this bill into law.
The bill was introduced on Oct. 1, 2021. The House passed it on Dec. 20, 2021 with amendments in the form of H.B. 22-81, HD1. The full Senate passed the bill without amendments on Feb. 3, 2022.
Demapan stated in the bill that Torres established the 2021 American Rescue Plan Act Local Stimulus Plan, which provides for payments in the amount of $500 for each eligible individual and $500 for each dependent of an eligible individual.
Demapan said the purpose of the stimulus plan was to provide assistance to households impacted by the negative economic effects of the pandemic.
He said payments under the stimulus plan would be subject to the earnings tax unless applicable law is amended to specifically exclude these payments.
He said their intent with the new law is to exclude from the earnings tax stimulus payments received from the Commonwealth pursuant to the 2021 ARPA Local Stimulus Plan.
The co-sponsors of the legislation are vice speaker Blas Jonathan T. Attao (R-Saipan), and Reps. Roy C.A. Ada (R-Saipan), Joel C. Camacho (Ind-Saipan), Joseph A. Flores (Ind-Saipan), Joseph Leepan T. Guerrero (R-Saipan), John Paul P. Sablan (R-Saipan), and Ralph N. Yumul (R-Saipan).