Treasurer Donald Kruse says only the Tax Exemption Board has the authority to grant tax-exempt status, not the Treasurer.
Kruse said on the KVZK-TV Evening News Tuesday that all semi-autonomous agencies of ASG, like the hospital, ASTCA, and ASPA, are paying the excise tax on imports.
The Ronald Reagan Marine railway is a semi-autonomous agency of the government.
According to CEO Carlos Sanchez, the shipyard has not had to pay excise tax for the past many years. But the current administration has changed that, and the shipyard has been told that it must pay the 8% excise tax.
Sanchez told KHJ News that two weeks ago, after Customs withheld a shipment for the shipyard, the board chairman, Senator Togiola Tulafono, spoke to the treasurer and the shipment was released without payment of the excise tax.
Sanchez argues that the shipyard can not be compared to ASPA and ASTCA, which are utility companies receiving steady revenues for essential services that they provide.
He said shipyard services are not mandatory for vessels, and the shipyard depends on the needs of the maritime industry and/or government vessels for income. Usually, vessels are drydocked very 3 to 4 years. He said for 2025, the shipyard has serviced only one vessel so far. Sanchez said the shipyard, with the support of the board, has been actively competing for other sources of revenue to sustain its operations.
Sanchez also pointed out that the shipyard did not budget for excise taxes, as it has been tax-exempt all these years. A shipment of equipment for the shipyard that arrived last week is being held by Customs until $30,000 in excise taxes is paid. Sanchez said the equipment is needed to repair ASPA’s water tanks.
The Treasurer told KVZK-TV that the Tax Exemption Board is meeting on Friday to discuss applications for tax exemptions.
