Rates

The following rates shall apply in computing, assessing and collecting the business privilege tax:

(a)Tax on the Business of Selling Tangible Personal Property. Upon every person engaging or continuing within Guam in the business of selling any tangible property whatsoever (not including however, bonds or other evidence of indebtedness or stocks), there shall be a tax equivalent to four and a half percent (4.5%) effective October 1, 2025, which shall reduce to four percent (4%) beginning on October 1, 2026, of gross proceeds of sales; except that on the gross proceeds of the operation of poker machines, there shall be a tax equivalent to eight percent (8%) on the gross proceeds of each CH. 26 BUSINESS PRIVILEGE TAX LAW machine, as determined by subtracting the winnings, pay-outs and malfunction refunds from total receipts of each machine.

(1)Provided, that gross proceeds of export sales of tangible property in foreign commerce shall not constitute a part of the measure of the tax imposed. Although not constituting a part of the measure of the tax imposed, all such sales shall be reported in the manner provided for the reporting of the tax imposed by § 26202(a).

(2)Provided, that any person engaging or continuing in business as a retailer and a wholesaler shall pay the tax required solely on the gross proceeds of sales of the retail business, and his books must be kept so as to show separately the gross proceeds of sale of each business.

(3)Provided, that a manufacturer or producer engaging in the business of selling his manufactured products at retail in Guam shall be required to make returns of the gross proceeds of such retail sales and pay the tax imposed by this Chapter for the privilege of engaging in the business of selling such products at retail in Guam; and

(4)Provided, that a manufacturer or producer, other than a manufacturer of alcoholic beverages, engaging in the business of selling his products to manufacturers, wholesalers, or licensed retailers, or persons actually selling the products to the United States Government, shall not be required to pay the tax imposed in this Act for the privilege of selling such products at wholesale. Nor shall any such manufacturer or producer, other than a manufacturer of alcoholic beverages, be required to pay the tax imposed in this Act for the privilege of selling products for delivery to the purchaser outside of Guam. The point of delivery for a purchaser outside of Guam may be on Guam, if the product’s ultimate destination or consumption is outside of Guam.

(b)[No text]

(1)[Repealed.]

(2)[Repealed.]

(3)Tax upon boxing. The tax levied and assessed under Subsections (b)(1) and (b)(2) (repealed) of this Section shall not apply to boxing for which a tax equivalent to twelve percent (12%) of the gross income of such boxing business is hereby levied and assessed.

(c)Tax on service business. Upon every person engaging or continuing within Guam, in any service business or calling not otherwise specifically taxed under this Section, [there shall be] a tax equivalent to four and a half percent (4.5%) effective October 1, 2025, which shall reduce to four percent (4%) beginning on October 1, 2026, of the gross income of such business.

(d)Professions. Upon every person engaging or continuing within Guam in the practice of a profession, excluding those expounding the religious doctrines of any church, [there shall be] a tax equivalent to four and a half percent (4.5%) effective October 1, 2025, which shall reduce to four percent (4%) beginning on October 1, 2026, of the gross income of such practice.

(e)Tax on Contractors. There shall be levied, assessed and collected a tax rate of four and a half percent (4.5%) effective October 1, 2025, which shall reduce to four percent (4%) beginning on October 1, 2026, measured against the gross income of any contractor; provided, that there shall be deducted from the gross income of the taxpayer so much thereof as has been included in the gross income earned from another taxpayer who is a contractor as defined in § 26101(b) and who has already paid the tax levied under this Subsection for goods and services that include the deductible gross income of the taxpayer who is a contractor; provided, that any person claiming a deduction under this Subsection shall be required to show in the person’s return either the name and the contractor’s license CH. 26 BUSINESS PRIVILEGE TAX LAW number issued by the Guam Contractors License Board, or the Guam business license number, or the registration number for a professional engineer, architect or land surveyor, or the Certificate of Authorization

(COA)number for a business authorized to provide engineering, architecture or land surveying services by the Guam Board of Registration for Professional Engineers, Architects, and Land Surveyors of the person paying the tax on the amount deducted by the person.

(1)Notwithstanding § 26202(e) of Chapter 26, Title 11, Guam Code Annotated, there shall be levied, assessed and collected a tax rate of five percent (5%) measured against the gross income of any military contract exceeding Ten Million Dollars ($10,000,000); provided, that there shall be deducted from the gross income of the taxpayer so much thereof as has been included in the gross income earned from another taxpayer who is a contractor as defined in § 26101(b) and who has already paid the tax levied under this Subsection for goods and services that include the deductible gross income of the taxpayer who is a contractor; provided, that any person claiming a deduction under this Subsection shall be required to show in the person’s return either the name and the contractor’s license number issued by the Guam Contractors License Board, or the Guam business license number, or the registration number for a professional engineer, architect or land surveyor, or the Certificate of Authorization

(COA)number for a business authorized to provide engineering, architecture or land surveying services by the Guam Board of Registration for Professional Engineers, Architects, and Land Surveyors of the person paying the tax on the amount deducted by the person. This tax rate shall be measured against the portion attributable to performance within Guam, and applies to any contract, agreement, or task order funded by the United States Department of Defense or by a foreign government in support of the United States military presence on Guam, for which performance is physically carried out in Guam. For phased or modified contracts, the five percent (5%) rate shall apply once the aggregate contract value exceeds Ten Million Dollars ($10,000,000).

(f)Tax on banks, banking institutions, small lenders and building and loan associations. Upon every person engaging or continuing within Guam in the business of operating any bank, banking institutions, building and loan association, small lending business, or lending institutions, there shall be a tax equivalent to four and a half percent (4.5%) effective October 1, 2025, which shall reduce to four percent (4%) beginning on October 1, 2026, of the net income received from business.

(1)Net Income. For the purpose of this Section, net income shall mean the gross income of such taxpayer received from all sources less the following deductions therefrom:

(A)Salaries or bonuses paid and other compensation from personal services.

(B)Interest or discount paid.

(C)Rents paid.

(D)Ordinary operating expenses such as supplies, utility services, insurance premiums other than for life insurance, provided that any deductible insurance expense shall be allowable only to the extent that such a premium is applicable to the tax period against which it is claimed.

(E)Loans or obligations charged off the books of the bank as losses unless charged against reserves then in existence.

(F)Losses other than loan losses, such as those occasioned by fire or other casualty, theft, embezzlement, and the like, but only to the extent not covered by insurance proceeds collected. CH. 26 BUSINESS PRIVILEGE TAX LAW

(G)Transfers from earnings to reserve for bad debts or other contingencies provided for.

(H)Miscellaneous direct expenses such as legal, advertising, auditing, and the like.

(I)Loss on property sold and depreciation on property owned.

(2)A person liable for the payment of taxes levied under this Section shall be required to file an annual return and shall not be required to file monthly returns. The tax year shall be calendar year except that the taxpayer may use his annual accounting period when prior permission is obtained from the Tax Commissioner. The annual return under this Subsection shall be filed not later than ninety

(90)days following the close of the taxpayer’s tax year.

(g)Dealing in foreign currency. Upon every person engaging or continuing within Guam in the business of purchasing and selling foreign money, there shall be a tax equivalent to four and a half percent (4.5%) effective October 1, 2025, which shall reduce to four percent (4%) beginning on October 1, 2026, of the gross profit of such business represented by the difference between the cost and selling price of the foreign currency measured in United States dollars.

(h)Tax on other business. Upon every person engaging or continuing within Guam in any business, trade, activity, occupation or calling not specifically included in any other provision of this Article, there shall likewise be a tax equivalent to four and a half percent (4.5%) effective October 1, 2025, which shall reduce to four percent (4%) beginning on October 1, 2026, of the gross income of such business. This Section shall apply to the gross income of persons taxable under other provisions of this Chapter but which gross income is not derived from the exercise or privilege taxable thereunder.

(i)Insurers. Upon every person engaged or continuing within Guam in the business of an insurer, there shall be a tax at the rate of four and a half percent (4.5%) effective October 1, 2025, which shall reduce to four percent (4%) beginning on October 1, 2026, of gross income received as premium for the writing of insurance, less returned premiums and less all commissions attributable to the sale and purchase of an insurance policy or policies of the insurer paid by said insurer to agents of the same, and four and a half percent (4.5%) effective October 1, 2025, which shall reduce to four percent (4%) beginning on October 1, 2026, of any other gross income earned or derived on Guam.

(j)Tour Agencies.

(1)Upon every person engaging or continuing within Guam in the business of a tour agency or travel agency, where tourism-related services are furnished to consumers by independent vendors through arrangements made by a travel agency, or tour packager, and the gross income is divided between the provider of the services on the one hand and the travel agency or tour packager on the other hand, a tax equivalent to four and a half percent (4.5%) effective October 1, 2025, which shall reduce to four percent (4%) beginning on October 1, 2026, shall be imposed on each person with respect to such person’s respective portion of the proceeds, and no more.

(2)Where transient accommodations are furnished through arrangements made by a travel agency or tour packager, the gross income is divided between the provider of the transient accommodations on the one hand and the travel agency, or tour packager, on the other hand, a tax equivalent to four and a half percent (4.5%) effective October 1, 2025, which shall reduce to four percent (4%) beginning on October 1, 2026, shall be imposed on each person with respect to such person’s respective portion of the proceeds, and no more.

(A)As used in this Subsection, “tourism-related services” shall mean dinner cruises, transportation included in a tour package, sightseeing tours, dinner shows, extravaganzas, CH. 26 BUSINESS PRIVILEGE TAX LAW cultural and educational facilities, and other services rendered directly to the customer or tourist.

(B)As used in this Subsection “transient accommodations” shall mean hotel, lodging facility, or similar facility located on Guam and subject to the provisions of 11 GCA § 30101.