Tax laws Guam (US)
Guam, an unincorporated territory of the United States, operates under a tax system that mirrors certain aspects of the U.S. federal tax code, with specific local adaptations. Here's an overview of key tax components in Guam:
Personal Income Tax:
- Federal Alignment: Guam's income tax system is designed to mirror the U.S. Internal Revenue Code, meaning residents file taxes similar to U.S. federal income tax returns. However, instead of paying federal income tax, they pay equivalent taxes to the Government of Guam.
Corporate Income Tax:
- Mirrored System: Corporations in Guam are subject to income taxes that align with U.S. federal corporate tax rates and regulations, with revenues directed to the Government of Guam.
Business Privilege Tax (Gross Receipts Tax):
Rate: Guam imposes a Business Privilege Tax (BPT) of 5% on the gross income of businesses operating within the territory. This tax is levied on the business rather than directly on consumers.
Historical Context: The BPT rate was increased from 4% to 5% effective June 1, 2018. Initially, there were plans to revert to 4% and introduce a sales and use tax; however, these plans were repealed, leaving the BPT at 5%.
Sales and Use Tax:
Absence of General Sales Tax: Guam does not impose a general sales tax on consumers.
Use Tax: A 5% use tax is applied to non-exempt personal property imported into Guam. citeturn0search10
Hotel Occupancy Tax:
- Rate: An 11% tax is levied on hotel room rates, applicable to guests staying in hotels and similar lodging establishments.
Other Taxes:
Alcoholic Beverage Tax: Varies depending on the type of beverage.
Tobacco Tax: Specific taxes are applied to tobacco products.
Real Property Tax: Property owners are subject to taxes based on the assessed value of their real estate holdings.
Amusement and Recreational Facility Taxes: Taxes may be imposed on certain entertainment and recreational services.
Liquid Fuel Tax: Applied to gasoline and other fuel products.
Tax Administration:
- Filing Requirements: Residents and businesses in Guam are required to file tax returns with the Guam Department of Revenue and Taxation, adhering to guidelines similar to those of the U.S. Internal Revenue Service (IRS).
It's important to note that while Guam's tax system aligns closely with U.S. federal tax laws, revenues collected are retained by the Government of Guam to fund local programs and services. For detailed and up-to-date information, consulting the Guam Department of Revenue and Taxation or a local tax professional is advisable.
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