{"id":1701,"date":"2012-01-24T06:16:09","date_gmt":"2012-01-24T06:16:09","guid":{"rendered":"http:\/\/newspaper.ctsi-logistics.com\/?p=1701"},"modified":"2012-01-24T06:16:09","modified_gmt":"2012-01-24T06:16:09","slug":"senate-house-poised-to-override-veto-of-foreign-corp-tax-bill","status":"publish","type":"post","link":"https:\/\/www.saipantribune.com\/index.php\/senate-house-poised-to-override-veto-of-foreign-corp-tax-bill\/","title":{"rendered":"Senate, House poised to override veto of foreign corp. tax bill"},"content":{"rendered":"
By Haidee V. Eugenio
\nReporter<\/div>\n

The Senate and the House of Representatives are poised to override the governor’s veto of a bill seeking to provide tax rate for foreign corporations earning income from outside of the CNMI, after a House legal opinion concluded that the proposed taxes do not violate the terms of the Covenant to establish a Commonwealth in political union with the United States.<\/p>\n

One of the items on the Senate’s session agenda for today is the vetoed measure, House Bill 17-163, Senate Draft 2, Conference Committee Substitute 1.<\/p>\n

Rep. Ray Basa (Cov-Saipan), author of the bill, said the House will also have its session this week to, among other things, override then acting governor Eloy S. Inos’s veto of the measure, which he said is a revenue-generating bill that could help infuse fresh cash to the CNMI economy.<\/p>\n

The acting governor, in his veto message on Dec. 1, said the proposed changes to the Northern Marianas territorial income tax structure violate Covenant restrictions to limit rebates to CNMI-sourced income and case law, which prohibits changes by insular areas that have adopted the U.S. tax code.<\/p>\n

But a Jan. 17 memo from House legal counsel John Cool states that while he concurs with the acting governor’s conclusion that local amendments to Chapter 7 Tax (NMTIT) are not permissible, the acting governor \u201cerroneously characterizes the tax on ‘Net Foreign Income’ as being under NMTIT Chapter 7.’\u201d<\/p>\n

The House legal counsel, as well as Basa, said the new tax proposed by the bill on \u201cNet Foreign Income\u201d is added under Chapter 5, Miscellaneous Taxes and License Fees, not Chapter 7 (NMTIT).<\/p>\n

\u201cHB 17-163, SD2, CCS1 does not amend Chapter 7 (NMTIT) and does not violate the Covenant 602,\u201d Cool said.<\/p>\n

The bill proposes a 10-percent tax imposed on \u201cNet Foreign Income.\u201d<\/p>\n

Following the sourcing rules of the NMTIT, the \u201cNet Foreign Income\u201d would not be included in gross income taxable under the NMTIT. None of the \u201cNet Foreign Income\u201d is derived from sources within the U.S. or the CNMI under the NMTIT income sourcing rules.<\/p>\n

However, if it were determined that the \u201cNet Foreign Income\u201d was sourced in the CNMI and subject to the NMTIT, the amount of the tax would be subject to the rebate offset amount of 100 percent.<\/p>\n

The Legislature has until the end of this month to override the governor’s veto of the bill.<\/p>\n","protected":false},"excerpt":{"rendered":"

By Haidee V. Eugenio Reporter The Senate and the House of Representatives are poised to…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-1701","post","type-post","status-publish","format-standard","hentry","category-local-news"],"_links":{"self":[{"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/posts\/1701","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/comments?post=1701"}],"version-history":[{"count":0,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/posts\/1701\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/media?parent=1701"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/categories?post=1701"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/tags?post=1701"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}