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Tax offset bill now law 

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GOVERNOR Ralph DLG Torres on Monday signed House Bill 21-98, which authorizes him to enter into agreements to offset judgments against creditors’ outstanding tax liabilities.

Authored by Rep. Sheila Babauta, Public Law 21-32 allows the following:

(a) The judgment against the Commonwealth government in Tano Group Inc. versus Department of Public Works et al., Civil Case No. 05-0100 may be offset against any tax liability, including penalties and interest, of the judgment creditor in such action.

(b) The judgment against the Commonwealth government in Manglona versus CNMI, Civil Case No. 97-0486 may be offset against any tax liability, including penalties and interest, of the judgment creditor in such action, as well as tax liabilities, including penalties and interest, of other individuals and entities agreed upon between the judgment creditor and the governor.

(c) The governor, in consultation with the secretary of Finance, shall determine and approve the amount of the offset to be applied.

The new law states that the CNMI government has been a party to a number of lawsuits that were not ruled in its favor. Certain rulings have obligated the government to pay millions of dollars to opposing parties. When the government fails to timely pay on judgments, interest accrues on both the principal and penalties imposed, worsening the financial strain to the government.

 

 

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