Withholding Assessment Fee Requirement for Government

Contracts; Off-Island Businesses Without Guam Business License.

(a)For the purposes of this Section, the following shall mean:

(1)Non-resident person means a person or body who is not a permanent resident of Guam, or a business that does not possess a valid Guam business license under Title 11, Guam Code Annotated, and does not pay Business Privilege Taxes under Chapter 26 of Title 11, Guam Code Annotated, and includes any individual, firm, copartnership, joint venture, association, corporation, estate, trust, COL292017 CH. 71 THE CASH ECONOMY ENFORCEMENT ACT limited liability company, limited partnership, limited liability partnership, or any other group or combination, as a foreign entity outside of Guam, acting as a unit.

(2)Professional services or services means any kind of services rendered by a non-resident person and includes, but is not limited to, legal, promotional, advertising, public awareness, architectural and engineering services, or other services deemed applicable in the opinion of the Director of the Department of Revenue and Taxation.

(b)

(1)There is established a withholding assessment fee for a non-resident person without a valid Guam business license, which shall be equal to four percent (4%) of the total dollar value of a contract awarded for all government of Guam contracts for professional services provided by a non-resident person residing outside of Guam, as a cost of doing business with the government of Guam.

(2)This Section shall apply as a mandatory requirement of a government of Guam contract being awarded to provide professional services required by any government of Guam agency, to include all autonomous agencies.

(3)All agencies, to include autonomous agencies, of the government of Guam shall ensure that all Requests for Proposals (RFP), Invitation for Bid (IFB), or any other form of solicitation for professional services, include the notification to potential offerors that the award and issuance of a contract to provide the professional services is subject to the withholding assessment fee for contracts awarded to persons without a valid Guam business license.

(4)The agency awarding the contract or the agency’s representative awarding the contract shall, at the time of a contract award, in the instance of a contract for professional services to a person who does not possess a valid Guam business license under Title 11, Guam Code Annotated, and who is not a resident of Guam, deduct from funds allocated for the contract an amount equal to four percent (4%) of the total dollar value of a contract awarded, and shall transmit the funds to the Treasurer of Guam for deposit in the General Fund. The amount of the withholding assessment fee withheld pursuant to this Section shall be duly noted in the payment statements to the contractor. The agency shall report to the Department of Revenue and Taxation (DRT), on forms prescribed COL292017 CH. 71 THE CASH ECONOMY ENFORCEMENT ACT by the Department, the amount of the withholding assessment fee withheld, or any other information requested by DRT on the prescribed form, from the awarded professional services contract within thirty

(30)days of the contract being awarded.

(c)Prospective Applicability. The withholding assessment fee pursuant to this Section for a non-resident person without a valid Guam business license shall not be applicable to any contract for professional services entered into with the government of Guam prior to the effective date of this Act; provided, however, that it shall be applicable for the award of a new contract or contract renewal for the contractual provision of the same or similar services.

(d)Withholding Assessment Fee Collected Declared Government of Guam Funds. The withholding assessment fee levied, assessed and collected under this Chapter shall become funds of the government of Guam from the moment of collection and shall be subject to all laws, rules and regulations pertaining thereto, and unless specifically provided by law, all such withholding assessment fees collected shall be deposited into the Treasury of Guam as part of the General Fund.