Delegation approves H.L.B. 23-60, lowers construction gross-revenue tax to 1% and raises threshold to $350,000

The Saipan and Northern Islands Legislative Delegation passed House Local Bill 23-60 (draft 2) on Jan. 7, 2025, amending local tax rules to impose a 1% tax on gross revenue from construction activities that exceed $350,000.

The bill matters because it changes the tax rate and the taxable threshold for construction-sector revenue, a move supporters said will reduce costs for builders while at least one senator warned it could create a risk of double taxation for firms also covered by a Senate measure.

Delegation leadership first moved to suspend rules to allow second reading of the bill. On the floor the author offered an amendment to replace a proposed 3% levy with a 1% tax on gross revenue ‘‘directly attributed or derived from construction activities’’ above the specified threshold, and to allow legal counsel to make non‑substantive technical edits to carry out the amendment. Members then approved a second amendment offered by leadership to change the tax‑ability threshold from $250,000 to $350,000 to align the House measure with a Senate amendment discussed during the session.

During debate, Representative Manny Castro thanked members for reducing the proposed percentage to 1% and urged consideration of additional measures to reduce construction costs. Senator Edith Guerrero expressed concern that similar language recently passed by the Senate could lead to double taxation for companies operating in the construction sector if both chambers' measures were applied.

A roll call followed. The madam clerk reported 15 members voting in the affirmative and 2 voting no; the chair declared H.L.B. 23‑60 (draft 2) passed by the delegation. The transcript identifies Senator De Leon Guerrero and Representative Mangona as voting "no." The bill was recorded as passing the delegation; the transcript does not specify subsequent transmittal steps or an effective date.

Key actions taken on the floor included: suspension of rules to allow second reading; adoption of a floor amendment changing the proposed rate to 1% and permitting non‑substantive technical edits by legal counsel; and a subsequent floor amendment increasing the threshold to $350,000. Those amendments were approved by voice or recorded vote before the final roll call on passage.

The record of votes and the amendments are entered in the delegation minutes as H.L.B. 23‑60, draft 2. The text adopted on the floor, as described in the transcript, replaces earlier references to a 3% levy with 1% throughout the bill and raises the exempt amount to $350,000. The transcript references an existing local tax provision, cited during debate, as 4CMC subsection 1301.

The session transcript does not specify how the delegation intends to reconcile the House and Senate measures beyond noting the House amendment to match the Senate's threshold, nor does it state an implementation date or administrative instructions for tax collection. Those details were not specified on the record.