by Ken Quintanilla

Guam - Vice Speaker B.J. Cruz is calling for an independent audit of the island's hotels and motels after learning that nearly one-fourth of them are delinquent in paying hotel occupancy taxes.

Cruz said, "One is of concern, one-fourth of all of the hotels is of major concern."

According to the Department of Rev & Tax, out of 39 hotels and motels operating businesses on Guam, 10 were found to be delinquent in paying their hotel occupancy taxes.

The matter was first raised by Cruz last month when he learned from tourism leaders that uncollected hot revenue existed within the hotel industry. He said, "The issue is all of them are just scraping by trying to make ends meet and I can understand that some months in order to make payroll and operational costs that you're not able to pay your hotel occupancy tax but at some point you got to catch up."

DRT reports $2.1 million dollars in delinquent payments - some dating all the way back to 2004. According to Cruz, while some have less than a dozen months of delinquency, many appear to have multiple years of outstanding taxes. For example, one hotel appears to have failed to remit taxes for 44 months over the last five years owing close to one million dollars in hotel occupancy taxes.

Rev & Tax director John Camacho meanwhile says revenue officers are fully aware and are in communication with those with delinquent accounts. "We're still pursuing in other words, the law allows us to apply interests and penalties just like any other receivables whether its all by a wholesaler or another company or a retailer, we still impose the interest and penalties as well," he said.

Camacho says the penalties are the same as gross receipt taxes or 5% per month not to exceed 25% of the tax. As for interests, he estimates at least three to four percent.

He further adds the $2.1 million isn't entirely a surprise considering the delinquent HOT's were built into the nearly $100 million currently sitting in accounts receivables.

"Like I said, there's 39 hotels out there and when we looked at our receivables, we found 10 of them, we have receivables from 10 of those hotels so right now we're communicating with them and any ordinary course of business to try and collect from these hotel occupancy tax," he said.

Cruz in the meantime has called for an independent audit of all the hotels as he felt the summary and past statements from rev and tax were incomplete and lead to even more questions. For instance, he says some of the data he's received have changed at least three times since he's inquired.

"So I need for somebody to go in, one I need to confirm the number of months that people are delinquent, but more importantly than that I want them to do random auditing of the reports, because the reporting is honor system," he said.

Cruz does not know nor would Rev & Tax reveal which hotels or motels specifically are delinquent.

"I just want everybody out there to know that we're looking at it and what I'm hoping is that the hotels will not want to be embarrassed and today or tomorrow they'll bring themselves current," he said.

And just as lawmakers begin to go into the budget sessions, Cruz says knowing all the information would help in determining whether or not changes need to be made to projections to the Tourist Attraction Fund.

"Just pay so we can do what we need to do if everyone paid their fair share of taxes, we'd have an over abundance of money and we could take of everything that we need to do," he said.

Camacho meanwhile says DRT staff are looking at whether there's evidence of intent of felony or fraud and if so says there's a possibility of referring those accounts to the Attorney General's Office.