By Emmanuel T. Erediano
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Variety News Staff
GOVERNOR David M. Apatang on Friday signed into law House Bill 24-63, clarifying the imposition of a 3% construction tax on general contractors.
Authored by Rep. John Paul P. Sablan, H.B. 24-63 is now Public Law 24-30. It amends P.L. 23-31, which established the 3% tax on construction activities other than residential housing, with a total project cost of $350,000.
The new law intends to further clarify the scope and parameters of the construction tax for clearer enforcement. Its purpose is to clearly impose the construction tax on all revenues received or accrued by general contractors beginning on the first day of the following calendar month in which the law was enacted.
It clarifies the imposition of a 3% tax on the gross revenues of a general contractor that are directly attributed to or derived from construction and that, in the aggregate, exceed $350,000 in a taxable year. This gross revenue tax excludes revenues generated or derived from the construction of residential housing.
P.L. 24-30 adds a new provision pertaining to the non-residential construction surtax, which states that the construction tax “applies beginning on the first day of the following calendar month in which this Act becomes law.” The tax applies to gross revenues received or accrued in prior months; however, for purposes of the $350,000 annual threshold, a general contractor’s cumulative gross revenues from construction for the taxable year shall be taken into account.
Emmanuel “Arnold” Erediano has a bachelor of science degree in Journalism. He started his career as police beat reporter. Loves to cook. Eats death threats for breakfast.
