Business Privilege and Use Tax Exemptions

(a)Business Privilege Tax. The proceeds from any contract for building materials or supplies, or for labor or supervision used in the construction of any new hotel or tourist facility in Guam, or for the expansion of any existing hotel, or for the development of affordable housing, shall be exempt from the tax imposed under Article 2 of the Business Privilege Tax Law; provided, that:

(a)the person providing the materials, supplies, labor or supervision has received a certificate of exemption from the Corporation; and

(b)the person claims the exemption within the following period: within one

(1)year of the date that such materials, supplies, labor or supervision are furnished. The Corporation shall adopt reasonable rules and regulations in accordance with the Administrative Adjudication Law for the granting of certificates of exemption in order to ensure that certificates are issued only with respect to materials, supplies, labor or supervision furnished subsequent to the effective date of this Article and for the construction or expansion of a qualifying hotel or tourist facility, or development of affordable housing as defined by the Authority. In addition, the Corporation shall require that the Beneficiary of a certificate of exemption comply with the same requirements of a Beneficiary of a Qualifying Certificate (>QC=) as set out in Title 12 Guam Code Annotated §§58116 through 58119.

(b)Use Tax. The owner of a hotel or tourist facility constructed under a contract, the proceeds from which have been exempted under this Section from the tax imposed under Article 2 of the Business Privilege Tax law, shall be exempted from the Guam Use Tax Law, with respect to the property used to construct, furnish and equip the hotel or tourist facility, for a similar period.

(c)Offset of Taxes if Paid. In the event the contractor, supplier or owner, otherwise eligible for the tax exemptions authorized by this Section, has paid the taxes because the Corporation=s rules and regulations had not been adopted and promulgated at the times the taxes were required to be paid, such contractor, or supplier or owner shall be entitled to an offset of such taxes against future taxes, without interest, COL120106 CH. 70 HOTEL DEVELOPMENT on presentation to the Director of Revenue and Taxation of a certificate of exemption issued by the Corporation to such contractor, supplier or owner.