Bill 11, introduced by Senator Shawn Gumataotao back in January, seeks to restore the Business Privilege Tax to 4%, a rate last seen in 2017 before it was raised as a temporary fix following the Trump tax cuts.

At a rotary club meeting earlier this year, Gumataotao said the original tax hike was meant to be short-term.

“2018 – that was seven years ago – it was touted as a temporary stopgap measure to bridge government finances in light of the then Trump tax cuts,” said Sen. Gumataotao. 

The senator argues that federal windfalls, like COVID aid and Section 30 funds, propped up government surpluses, while businesses got no relief.

“Reliance, especially over the last six years, came with an expansion of government and, for the most part, no relief for any one of you in this room today,” added Gumataotao. 

He says restoring the BPT to 4% would give businesses breathing room to reinvest and reduce consumer prices.

But Governor Lou Leon Guerrero opposes the measure.

“The 1% that they want to decrease is really going to benefit the big, multi-billion dollar contractors, not the small business people because they already fall under the radar of $500,000,” said Leon Guerrero. 

The Governor says the biggest beneficiaries would be large contractors, not small businesses that already pay a reduced rate.

“Most of our small businesses are taxed 3%. They are taxed at a minimum of 3% and we cannot go below 3% because the bond covenants says that you have to have a GRT of at least 3%,” added Leon Guerrero. 

She also raised a key question: "How are we going to make up for the decrease in revenue?"

In a release by the Guam Chamber of Commerce, they estimate that the 1% rollback would in fact reduce GovGuam revenue by $60 million, but with an Ability to turn around a $51 million surplus like they did in FY 2024, they believe GovGuam can afford it if spending is restrained.

Further, the chamber says ,“If the public sector exercises fiscal restraint and stays within its authorized budget, the government can afford to reduce the BPT without jeopardizing essential services.”

The senator agrees.

“This bill will not undermine the government’s ability to provide healthcare, education, public safety, and other essential services. On the contrary, this bill will be that reminder of the collaboration of the whole community to protect those priority services and our limited tax dollars, ensuring that they are being responsibly spent,” said Gumataotao. 

With the chamber posting a petition for the community to sign and bolster their testimony, Bill 11’s public hearing is scheduled for Monday, June 9.