New Guam sales tax starts October 2018

Update 8.22.2018: The Guam Legislature and Governor Eddie Calvo are at odds. The Legislature repealed the sales tax set to take effect October 1, and subsequently overrode the governor's veto of the sales tax repeal. As a result, the new 2 percent sales tax described below will not go into effect October 1. Additional details are available in Bill 262-34.

To reduce a $67-million shortfall caused by federal tax cuts, lawmakers in Guam have enacted a 2 percent sales tax. It takes effect October 1, 2018.

The new 2 percent general sales tax applies to tangible personal property and a number of business services purchased in Guam, “or purchased outside of Guam for delivery to Guam.”

The tax doesn’t apply to the following: banking services, lending services, foreign currency services, or insurance services. It also doesn’t apply to sales of liquid or diesel fuel sold at sales outlets in Guam. Additional information is available in Bill 248-34.

The Guam Department of Revenue and Taxation will administer the tax, which is to be remitted monthly. According to the bill, electronic filing is preferred starting January 1, 2019, but paper returns will be accepted. Like monthly returns for many other taxes, the general sales tax will be due on or before the 20th day following the close of the calendar month in which the taxes are accrued. Additional guidance will be provided by the department in the coming months.

Companies that do business in Guam should pay close attention to the upcoming sales tax. Questions should be directed to a trusted tax advisor, such as the Avalara Professional Services Team.