Guam Shipyard wants to validate its qualifying certificate
After seven years, the Guam Shipyard is still trying to validate its qualifying certificate. The company and its owner that currently owe more than $4 million in taxes is hoping the GEDA will allow to the QC.
September 2, 2009Updated: September 2, 2009
By KUAM News
By KUAM NewsAfter seven years, the Guam Shipyard is still trying to validate its qualifying certificate. The company and its owner that currently owe more than $4 million in taxes is hoping the Guam Economic Development Authority will allow the QC issue to revisited. The Guam Shipyard and its owner Mathews Pothen are trying to validate a qualifying certificate that GEDA has said does not exist.
The Shipyard owes more than $4 million to the Department of Revenue & Taxation for taxes that went unpaid because of the shipyard's belief that they had a valid QC, a document the Guam Economic Development Authority issues that gives companies tax breaks. According to KUAM News archives, Pothen's application back in 2002 included requests for 100% tax relief for corporate income tax for 20 years, 75% corporate dividend tax for 5 years and 100% tax relief for gross receipts taxes for 20 years.
The GEDA board allowed for those tax breaks with the caveat that the shipyard employee a minimum of 250 full-time employees, run an apprenticeship program and increase its monthly rent to GEDA from $8,000 to $15,000. The GEDA board never gave final approval of the QC because major changes were made to the original document.
Those changes were made by then-governor Carl Gutierrez, who before signing off on the Shipyard's QC, made handwritten changes, crossing out several key components. The changes included crossing out key words that means GEDA would have to give the Shipyard more than $1.3 million from the proceeds of the sale of the dry dock. The original QC stipulated that GEDA would not have to pay that money.
Gutierrez also deleted a portion of the agreement raising the Shipyard's monthly rent from $8,000 to $15,000. Instead, he left the rent at the lesser amount.
The former governor additionally crossed-out the requirement that the Shipyard maintain no less than 250 full-time employees and instead changed it to read 150 FTEs. While Pothens has been adamant about the validity of the QC and maintains he does not owe millions in taxes.
In an e-mail statement GEDA administrator Tony Blaz confirms that last month the agency received a request by the shipyard to "revisit the status of the qualifying certificate the corporation applied for back in 2002." Blaz added that in 2003, GEDA's board of directors did not issue the QC to the corporation, based on a legal opinion received by the authority's counsel, Calvo & Clark.
Last Friday GEDA, its conflict counsel, the law firm of Lujan, Aguigui And Perez met with representatives of the Guam Shipyard and their attorney, but Blaz could not comment about the details of that meeting, only saying their attorney is currently looking into the matter.
Pothens meanwhile is still trying to get a tax lien that was imposed by the Rev & Tax lifted.
The Shipyard owes more than $4 million to the Department of Revenue & Taxation for taxes that went unpaid because of the shipyard's belief that they had a valid QC, a document the Guam Economic Development Authority issues that gives companies tax breaks. According to KUAM News archives, Pothen's application back in 2002 included requests for 100% tax relief for corporate income tax for 20 years, 75% corporate dividend tax for 5 years and 100% tax relief for gross receipts taxes for 20 years.
The GEDA board allowed for those tax breaks with the caveat that the shipyard employee a minimum of 250 full-time employees, run an apprenticeship program and increase its monthly rent to GEDA from $8,000 to $15,000. The GEDA board never gave final approval of the QC because major changes were made to the original document.
Those changes were made by then-governor Carl Gutierrez, who before signing off on the Shipyard's QC, made handwritten changes, crossing out several key components. The changes included crossing out key words that means GEDA would have to give the Shipyard more than $1.3 million from the proceeds of the sale of the dry dock. The original QC stipulated that GEDA would not have to pay that money.
Gutierrez also deleted a portion of the agreement raising the Shipyard's monthly rent from $8,000 to $15,000. Instead, he left the rent at the lesser amount.
The former governor additionally crossed-out the requirement that the Shipyard maintain no less than 250 full-time employees and instead changed it to read 150 FTEs. While Pothens has been adamant about the validity of the QC and maintains he does not owe millions in taxes.
In an e-mail statement GEDA administrator Tony Blaz confirms that last month the agency received a request by the shipyard to "revisit the status of the qualifying certificate the corporation applied for back in 2002." Blaz added that in 2003, GEDA's board of directors did not issue the QC to the corporation, based on a legal opinion received by the authority's counsel, Calvo & Clark.
Last Friday GEDA, its conflict counsel, the law firm of Lujan, Aguigui And Perez met with representatives of the Guam Shipyard and their attorney, but Blaz could not comment about the details of that meeting, only saying their attorney is currently looking into the matter.
Pothens meanwhile is still trying to get a tax lien that was imposed by the Rev & Tax lifted.