Special Hotel Qualifying Certificate Defined

The Special Hotel Qualifying Certificate

(QC)is a contract valid for a given period, executed by I Maga’hågan/Maga’låhen Guåhan upon the recommendation of the Authority. The QC, once issued and unless suspended, rescinded, or revoked, shall constitute conclusive evidence of entitlement to the tax rebates, abatements, or exemptions set forth on its face.

(a)New Hotel Construction Tax Rebate and Abatement. There shall be allowed to each developer a tax rebate, exemption, and abatement in an amount equal to ten percent (10%) of their total construction cost, which can be applied by the developer at their discretion to the following taxes:

(1)Fifty percent (50%) Business Privilege Tax

(BPT)for twenty

(20)years as long as the tax credits are available at the point they are taken. This BPT exemption shall not apply to the levy of three percentage points (3%), out of the total percentage points levied from time to time, of the BPT, the revenues from which are pledged to the government of Guam Business Privilege Tax Bonds;

(2)Seventy-five percent (75%) Income Tax Rebate for twenty

(20)years;

(3)One hundred percent (100%) Real Property Tax Abatement for ten

(10)years; provided, the fee simple owner taxpayer is the Qualifying Certificate beneficiary and that the real property on which the tax is assessed is only utilized by the beneficiary for activities identified in their Qualifying Certificate; CH. 58 QUALIFYING CERTIFICATES

(4)One hundred percent (100%) of Use Tax Exemption with respect to the property used to construct, furnish, and equip the new facility construction or substantial expansion of an existing building. The exemption must be claimed no later than one

(1)year of issuance of the facility’s occupancy permit.

(b)Hotel Renovation and Expansion Tax Rebate and Abatement. There shall be allowed to each developer a tax rebate, exemption, and abatement in an amount equal to twenty percent (20%) of their total construction cost, which can be applied by the developer at their discretion to the following taxes:

(1)Fifty percent (50%) Business Privilege Tax

(BPT)for twenty

(20)years as long as the tax credits are available at the point they are taken. This BPT exemption shall not apply to the levy of three percentage points (3%), out of the total percentage points levied from time to time, of the BPT, the revenues from which are pledged to the government of Guam Business Privilege Tax Bonds;

(2)Seventy-five percent (75%) Income Tax Rebate for twenty

(20)years;

(3)One hundred percent (100%) Real Property Tax Abatement for ten

(10)years; provided, the fee simple owner taxpayer is the Qualifying Certificate beneficiary and that the real property on which the tax is assessed is only utilized by the beneficiary for activities identified in their Qualifying Certificate;

(4)One hundred percent (100%) of Use Tax Exemption with respect to the property used to construct, furnish, and equip the expanded and/or renovated building. The exemption must be claimed no later than one

(1)year of issuance of the facility’s occupancy permit.

(c)Application Period. Eligible developers for this Special QC pursuant to § 58203(a) shall file their application prior to issuance of the hotel project building permit. Eligible developers for this Special QC pursuant to § 58203(b) shall be able to apply at any time, granted that for the purposes of calculating their twenty percent (20%) tax benefit amount, any construction costs invoiced prior to the official application submission date shall be deemed ineligible.

(d)Benefit Negotiations. The Authority has the sole authority to negotiate the terms of the QC. Negotiations shall be completed prior to issuance of the hotel project’s building permit, if applicable.