By Dave Davis
For Variety

THE legislature has pulled the rug out from under hundreds of Guam small businesses in its evisceration of the Dave Santos Amendment during the budget review process. The most troubling part of their latest attack on struggling small businesses is the disinformation coming from members of the legislature.
I’m fully aware that I may be wasting my time in opposing their underhanded dealings, as it’s probably a done deal. Nevertheless, I’m moved to write about this by lawmakers’ public comments that indicate either intent to deceive the public or ignorance about how the GRT exemption applies. You decide which shoe fits.
Senator Guthertz recently publicly identified the Dave Santos Amendment as one of two ‘glaring examples’ of how GovGuam misses the boat relative to business taxes. She later claimed that her comments had been misinterpreted, and that she had no intention of attempting to repeal or change the Amendment. So — how did she vote on it in the budget bill?
Senator Frank Blas has publicly commented that some businesses are somehow circumventing or evading provisions of the Amendment, resulting in “$100,000 tax breaks.” That’s an erroneous and irresponsible statement. The absolute maximum annual tax “break” under existing law is $2,000 per taxable entity. The exemption is cumulative for each GRT account, whether the taxable entity has one business or a dozen. For example: if I owned a lawn-care business and a retail store and a rental property, my total exemption available under the Amendment is $2,000 per annum.
Small businesses must pay gross receipts tax whether or not they are profitable. Expenses often far exceed revenues, especially during startup periods that can span several years, but GRT still must be paid. The current proposal to decrease the revenue ceiling and exemption amount could very well be the decisive make-or-break factor for any number of Guam’s small businesses.
I note that the other “glaring example” cited by Senator Guthertz — qualifying certificates — remains unscathed in this raid on small businesses. I also note that the tax credit recently granted to Ambros Corporation, through the Paseo Stadium scam, is equivalent to the maximum possible annual exemption for 500 of Guam’s small businesses under the Amendment.
I don’t have the figures, but I suspect that the total of legitimate tax breaks for small businesses are relatively insignificant compared to qualifying certificate tax breaks for large corporations, many of them granted — contrary to the spirit and intent of the law — to established and profitable local businesses. The insurance industry comes to mind. The big guys remain firmly perched in the catbird seat, while the little guys again get the shaft.
Holding the exemption amount at the current $50,000 level with a realistic ceiling of $100,000 would approximate, in today’s dollars, the spirit, intent and character of the Dave Santos Amendment as originally conceived and applied. Just do it.