In a closed-door meeting yesterday, CDA board decided again to recommend that QC 2002-01, which expired on Aug. 7, be revoked after meeting with Assistant Attorney General James Stump to discuss tax issues and after further review by the board and CDA officials that found the hotel not complying with the requirements and conditions of its qualifying certificate.
The board went into executive session before 4 p.m. and adjourned around 7 p.m. last night.
It has been two and half years since CDA last recommended to Gov. Benigno R. Fitial to revoke Tinian Dynasty’s qualifying certificate citing non-compliance with tax issues, environmental concerns, and violation of the American Disabilities Act.
The governor had not acted on the recommendation 45 days after CDA transmitted the recommendation in December 2008 that kept the QC active.
Tinian Dynasty, also known as Hong Kong Entertainment (Overseas) Investment Limited, was first issued the qualifying certificate in 2002 providing the casino-hotel tax abatements: 100 percent abatement in BGRT tax for the first three years; 50 percent for years 4-7; and 30 percent for years 8-10.
It was also granted 50 percent alcoholic beverage/bar tax abatement for the first seven years and 30 percent from its eighth to tenth year.
According to CDA, benefits were capped at $14 million.
The beleaguered casino-hotel has been struggling to stay afloat despite the dwindling tourist arrivals.
Last June, Rep. Ramon S. Basa reported that Tinian Dynasty owes the CNMI government $30 million in tax debts.
According to CDA rules and regulations for qualifying certificates, if the governor will act on CDA’s recommendation for the revocation of the qualifying certificate, tax benefits afforded to any investor “shall cease and all CNMI tax requirements shall then apply to the beneficiary as if it was not eligible for the qualifying certificate.”
It also stated, “Any provisional tax abatement previously allowed a beneficiary during the revoked or suspended period shall be disallowed and the tax, if any, shall become due and payable to the CNMI government within 30 days from the date of the revocation or suspension. Any tax not paid within the 30-day period shall be assessed all applicable late charges retroactive to the date when such tax payment was first required as if the Beneficiary was not eligible for a qualifying certificate.”
The QC program was established in December 2000, amended later to include a provision allowing existing tourism-based businesses with a minimum of $2 million investment to avail of the program.
