REPRESENTATIVE Tina Sablan last week prefiled House Bill 22-19 which proposes to restore earned income tax credit or EITC for qualified families and taxpayers.
Tina Sablan
The rest of the 22nd House leadership co-authored the measure.
Earned income tax credit is “a refundable tax credit that helps qualified low-to-moderate-income working families and taxpayers receive tax breaks by allowing them to use the credit to reduce the tax they owe and increase their tax refunds.”
If enacted into law, H.B. 22-19 will repeal Public Law 11-25. The measure states that the earned income tax credit would apply to the CNMI were it not for P.L. 11-25.
According the bill, since the “enactment of P.L. 11-25 in 1998, low and middle income earners have been unduly burdened by 100% tax on refunds for which they would have otherwise qualified.”
The EITC program was implemented during the administration of Gov. Froilan C. Tenorio (1994-1998) when the local economy was at its peak.
Following the Asian currency crisis, however, tourist arrivals plummeted and the CNMI government struggled to generate the revenue it needed to pay all its obligations, including the EITC.
P.L. 11-25 was signed by Gov. Pedro P. Tenorio to “help alleviate the financial crisis facing the Commonwealth government….[which] can no longer afford to pay [the EITC].”
Rep. Celina Babauta, one of the co-authors of H.B. 22-19, noted that its introduction is one of her first acts as a freshman legislator. “I stand proud to co-sponsor meaningful legislation that gives buying power back to our people.”
She added, “We are here to work for every citizen, young or old. Thank you, Tina Sablan and fellow colleagues in the 22nd Legislature for your unwavering efforts to lift our people out of poverty.”
Rep. Tina Sablan said the earned income tax credit “rewards work and boosts earnings for lower-income individuals and families, and is linked to improved health and educational outcomes for children in struggling households.”
“It stimulates local economies, because the people who qualify for refunds are likely to spend that money immediately to meet essential needs and improve their lives,” she said.
“As the Commonwealth continues in recovery from multiple typhoon disasters and the ongoing Covid-19 pandemic, Sablan said the earned income tax credit will provide relief to many households in economic distress. Moreover, because the EITC applies primarily to working U.S. citizens, lawful permanent residents, and citizens of the Freely Associated States, restoring this tax credit is an important step towards building the Commonwealth’s U.S. workforce.”
