Exemptions

The provisions of this Article, and the taxes levied thereunder, shall not apply to the following persons:

(a)The government of Guam, except as authorized in § 60114.1(a) of Article 1 of Chapter 60, Title 21, Guam Code Annotated; the government of the United States; the government of any foreign sovereignty; and any agency or instrumentality of any of the foregoing governments in regard to any activity or function engaged in.

(1)Notwithstanding this Subsection (a), taxes shall not be levied against any autonomous agency, public corporation, and other public instrumentalities of the government of Guam with existing leases where a tax levy may affect the revenue neutrality of that autonomous agency, public corporation, and other public instrumentalities of the government of Guam to the potential detriment of existing bond ratings.

(b)Fraternal benefit societies, orders or associations, operating under the lodge system, or for the exclusive benefit of the members of the fraternity itself which provide for the payment of death, sick, accident or other benefits to the members of such fraternity and their dependents.

(c)Corporations, associations or societies organized and operated exclusively for religious, charitable, scientific or educational purposes, or the preservation of the culture historically indigenous to Guam.

(d)Business leagues, chambers of commerce, boards of trade, civic leagues, public schools, and organizations operated exclusively for the benefit of the community and for the promotion of social welfare, provided that no profit accrues to the benefit of the private stockholder or individual.

(e)Hospitals, infirmaries and sanitariums.

(f)Totally blind, with respect to the first Three Thousand Dollars ($3,000.00) of gross income for each tax year.

(g)Agricultural producers and fisheries.

(h)Manufacturers, producers or importers, who shall have paid the taxes levied by Articles 3 or 6 of this Chapter on the manufacture, production or importation of alcoholic beverages, and tobacco; provided that any such taxpayer claiming exemption under this Section may claim it only to the extent of the gross proceeds of sales accruing to him from the sale to a wholesaler or retailer of the product taxes under such other sections; provided further, that a person claiming exemption under this Section shall keep accounts of such sales separately and support them by sales receipts for each separate transaction which is taxable under Articles 3 or 6 of this Chapter.

(i)Any person doing business as home industry and holding a business license issued pursuant to § 72157 of 11 GCA.

(j)The exemption of § 26203(b), (c),

(d)and (e), shall apply only to the gross income of any person included in any such subsection received:

(1)from the regular activities of such person, or

(2)from a lottery authorized under 9 GCA, Chapter 64, or CH. 26 BUSINESS PRIVILEGE TAX LAW

(3)from a carnival, fiesta, dance, athletic performance, or other similar entertainment, sponsored by such person, the profits of which are to be used exclusively for, or in furtherance of, the regular activities of such person, and shall not accrue in whole or in part to the benefit of any private stockholder or individual. Such exemptions shall be allowed only upon application to the Tax Commissioner in accordance with § 26117. The within Subsection

(j)shall not be construed to exempt from the taxes levied by this Article any person having a concession or contract from an exempt person for the furnishing or sale of any tangible property, or the furnishing of any service, from which gross income accrues to such person.

(k)The provisions of this Article and the taxes levied hereunder, shall not apply to the following gross income or gross proceeds of sale:

(1)Amounts received under life insurance policies and contracts paid by reason of the death of the insured.

(2)Amounts received (other than amounts paid by reasons of death of the insured) under life insurance, endowment or annuity, or upon surrender of the contract.

(3)Amounts received by any persons under any accident insurance or health insurance policy or contract, or under worker’s compensation acts or employer’s liability acts, as compensation for personal injuries, death or sickness, including also the amount of any damages or other compensation received, whether as a result of action or by private agreement between the parties on account of such personal injuries, death or sickness.

(4)The value of all property of every kind and sort acquired by any person by gift, bequest or devise, and the value of all property acquired by any person by descent or inheritance.

(5)Amounts received by any person as compensatory damages for any tort injury to him, or to his character or reputation, or received by any person as compensatory damages for any tort injury to or destruction of property, whether as the result of action or by private agreement between the parties; provided, however, that amounts received by any person as punitive damages for tort injury or breach of contract injury shall be included in gross income.

(6)Amounts received as salaries or wages for services, rendered by an employee to an employer.

(7)Amounts received as alimony and other similar payments and settlements.

(8)Amounts received by a distributor from the sale of liquid fuel when the tax levied by Article 4 of this Chapter has been paid thereon by the distributor. A distributor for purposes of this Section excludes all retailing activities of any business entity. This exemption shall not apply to the sale by a retailer or a retailing subdivision of a distributor of any liquid fuel on which a tax is levied under Article 4 of this Chapter.

(9)The first Forty Thousand Dollars ($40,000) earned or received per taxable year by any person as rental income from real property whose gross annual rental income from real property is less than Fifty Thousand Dollars ($50,000) during the most recent tax year. The exemption shall apply annually, commencing at the first day of the month of the new tax year, based on the gross annual rental income of a person during the most recent year, and shall end on the last day of the last month of the same tax year.

(10)All of the gross proceeds received by contractors for the construction of residential buildings developed, owned, and operated by non-profit corporations or associations, which CH. 26 BUSINESS PRIVILEGE TAX LAW construction is pursuant to a program approved by the Secretary of Housing and Urban Development pursuant to § 221 (d)(3) of the Housing Act, as amended.

(11)The amounts collected by persons required to collect taxes imposed under Chapter 30.

(12)All the gross proceeds received by those persons selling goods, arts or crafts in the Guam and Micronesian Cultural Village established by 12 GCA § 9302 for a period of ten

(10)years commencing on the date that any business privilege tax would otherwise be required to be paid to the government of Guam.

(13)Amounts received from the sales of liquid fuel to the United States of America, to the government of Guam or for commercial aviation purposes.

(14)Amounts received from the sale of residual fuel for marine purposes. As used in this Subsection, “residual fuel” means that liquid which is the heaviest grade petroleum product used in marine oil-burning boilers. It consists of the residue of certain crude oils after the lighter fractions such as benzine, kerosene, gas-oils and lubricating oils have been removed by distillation.

(15)Amounts received from the sales of personal property to the government of Guam.

(16)Amounts received as contributions or received from fund raising activities by political candidates, committees, parties, corporations, associations, organizations or funds and which are expended for political campaign purposes and reported to the Election Commission pursuant to the laws of Guam.

(17)[No text]

(A)Amounts received from the sale or resale of products processed or manufactured at the Guam Rehabilitation Workshop Center by registered clients of the Center, or certified as disabled worker products, and products processed and manufactured independently by registered clients of the Center where fifty percent (50%) of the value of the product is added by the client.

(B)The Director of the Department of Vocational Rehabilitation shall certify that such products were processed or manufactured at the Guam Rehabilitation Workshop Center by registered clients of the Center, or certified as disabled worker products, or else processed and manufactured independently by registered clients of the Center where fifty percent (50%) of the value of the product is added by the client.

(18)Export Trading companies as defined by § 26101(d) of this Title and goods and services exported by them.

(19)All of the foreign trade income of a FSC, as defined in 12 GCA § 60101 (b).

(20)All of the investment income of a FSC as defined in 12 GCA § 60101(f) and carrying charges as defined in 12 GCA § 60101(g).

(21)Amounts received from the sale of liquid fuel to vessels engaged in commercial fishing.

(22)Amounts received from engaging or continuing in business as a wholesaler, except that if such persons are, in addition, engaging or continuing in business as a retailer, the provisions of this Subchapter and the taxes levied thereunder shall apply to that part of the businesses of such persons that involve retail. CH. 26 BUSINESS PRIVILEGE TAX LAW

(A)Amounts received from engaging or continuing in business as a wholesaler shall include the sales of tangible personal property to contractors.

(23)The amount of winnings, payouts or malfunction refunds reported pursuant to § 26110(g) of this Title.

(24)Amounts paid by the contractor out of the contract gross proceeds to individual clients or to the rehabilitation center or workshop pursuant to the provisions of 17 GCA § 41106.

(25)Amounts received by a participant in the Guam-Micronesia Island Fair from sales of goods or services at the Fair.

(26)Amounts received from the sale of betelnut (pugua), pepper tree leaf (pupulu), and lime

(afok)for use with pugua.

(27)All of the gross income of a Foreign Sales Corporation

(FSC)from sources without Guam, as determined under 12 GCA § 60102(c).

(28)The first Forty Thousand Dollars ($40,000) earned or received per taxable year by any person as income from retailing whose gross annual retail income is less than Fifty Thousand Dollars ($50,000) during the most recent tax year. The exemption shall apply annually, commencing at the first day of the month of the new tax year, subject to the gross annual retail income of a person during the most recent year, and shall end on the last day of the last month of the same tax year.

(A)Fifty percent (50%) of the amounts received from the retail sale of local produce, as defined in this Subdivision.

(B)“Local produce” as used in this Subdivision shall mean the following: locally produced crops, including, but not limited to, plants and plant products collectively grown or cared for and used for food and other useful purposes; locally raised livestock, including but not limited to, cattle, carabao, swine, sheep, goats, equine and poultry raised for food or other purposes; and locally caught fish to include any aquatic animal life, including, but not limited to, oysters, clams, mollusks, mussels, crustaceans and other shellfish

(29)The first Forty Thousand Dollars ($40,000) earned or received per taxable year by any person as income service, which includes, but is not limited to, legal; medical; dental; accounting; consulting and engineering fees; commissions on real estate sales or property management; fees charged by barbershops, beauty parlors, shoe shining parlors, dry cleaning and laundry establishments; and automobile, appliance, electronics and computer repair shops, whose gross annual service income is less than Fifty Thousand Dollars ($50,000.00) during the most recent tax year. This exemption shall apply annually, commencing at the first day of the month of the new tax year, subject to the gross annual service income of the person during the most recent tax year, and shall end on the last day of the month of the same tax year.

(30)The first Forty Thousand Dollars ($40,000) earned or received per taxable year by person as rental income whose gross annual rental income is less than Fifty Thousand Dollars ($50,000.00) during the most recent tax year. This exemption shall apply annually, commencing at the first day of the month of the new tax year, based on the gross annual rental income of a person during the most recent year, and shall end on the last day of the last month of the same tax year.

(31)The first Forty Thousand Dollars ($40,000.00) earned or received per taxable year by a person, partnership or corporation as commission income whose gross annual commission CH. 26 BUSINESS PRIVILEGE TAX LAW income is less than Fifty Thousand Dollars ($50,000.00) during the most recent tax year. This exemption shall apply annually, commencing at the first day of the month of the new tax year, subject to the gross annual income of the person during the most recent tax year, and shall end on the last day of the month of the same tax year.

(32)The first Forty Thousand Dollars ($40,000) earned or received per taxable year by a licensed insurance company as insurance premium income whose gross annual insurance premium income is less than Fifty Thousand Dollars ($50,000.00) during the most recent tax year. This exemption shall apply annually, commencing at the first day of the month of the new tax year, subject to the gross annual income of the person during the most recent tax year, and shall end on the last day of the month of the same tax year.

(33)Any amounts received by businesses participating in the Performance of BOS Activities, defined in 12 GCA § 58128.7, as a BOS Contractor, or Subcontractors of the BOS Contractor, provided that such business is a “Guam-based Contractor or Guam-based Subcontractor” for purposes of 12 GCA § 58128.7.

(34)[Repealed.]

(35)Amounts received from the sale of telecommunication services including telephony, internet, data transmission line, wired/wireless/cable television and satellite service, two-way radios, paging and wired and wireless data communications and related services to customers outside of Guam.

(36)All the gross proceeds received by child care facilities and group care homes which are duly licensed pursuant to Article 4 – Child Welfare Services Act, of Chapter 2, Division 1 of Title 10, Guam Code Annotated, commencing on the date that any business privilege tax would otherwise be required to be paid to the government of Guam. This Item shall continue to be effective beyond its initial expiration date of November 17, 2016.

(37)Official Vehicle Inspection Safety

(OVIS)fees collected by safety inspection stations on behalf of the government of Guam under 16 GCA § 3602(b)(1).

(38)Amounts received from the sale of medical equipment, machines, and appliances, including beds, examination or treatment chairs, or telemedicine technology for use in hospitals or clinics. Clinics, for purposes of this Subsection, include those operated by healthcare professionals, licensed under the provisions of 10 GCA Chapter 12, who accept Medicare, Medicaid, and Medically Indigent Program

(MIP)patient coverage when applicable.

(39)Amounts received from homeowner association membership dues and common area fees.

(l)The amounts collected on behalf of the government as tipping fees imposed under Chapter 51 of Title 10 of the Guam Code Annotated.

(m)A Subcontractor as defined pursuant to § 26101(b)(1).