Cash-Based Businesses; Defined

For the purposes of this Chapter, cash-based business means any person who operates a business, including for-profit or not-for-profit, where transactions in goods or services are exchanged substantially for cash and where the business is found, based upon reasonable cause including observation or evidence, to have met one

(1)of the following COL292017 CH. 71 THE CASH ECONOMY ENFORCEMENT ACT factors:

(a)is found to have substantially underreported or misrepresented the proper amount of tax liability on any return or other submission to the Department. For purposes of this Section, an amount has been substantially underreported if the amount properly includible on the return or submission is in excess of twenty-five percent (25%) of the amount stated on the return or submission;

(b)is required to be licensed, registered, or permitted under Title 11, Guam Code Annotated, and is in fact not so licensed, registered, or permitted;

(c)has a past pattern of noncompliance of obligations under Title 11, Guam Code Annotated;

(d)does not have a fixed and permanent principal place of business;

(e)has not obtained any required tax clearance;

(f)has failed to maintain adequate books and records, or those records required to be maintained by law or administrative rule;

(g)does not accept checks or electronic payment devices for business transactions; provided, that a business may establish reasonable criteria for accepting personal checks;

(h)offers price differentials or otherwise deviates from usual business practices when the business transaction substantially involves payment of cash, except where there is a bona-fide business reason for a price differential, such as the avoidance of merchant fees imposed by credit card companies; or

(i)any other factor relevant to describing a cash-based business capable of noncompliance, as determined by the Director of Revenue and Taxation, and issued pursuant to a tax information release; provided, that a business shall not be deemed to have met any of these factors while a genuine dispute as to that factor is pending in a contested case before any administrative agency or in any court.