B-126996, MAY 4, 1956, 35 COMP. GEN. 620

B-126996, MAY 4, 1956, 35 COMP. GEN. 620

TAXES - GUAM - INCOME TAX WITHHOLDING THE INCOME TAX LAWS WHICH HAVE BEEN ADOPTED BY GUAM PURSUANT TO SECTION 31 OF THE GUAM ORGANIC ACT ARE FEDERAL INCOME TAX LAWS AND, THEREFORE, THE WITHHOLDING PROVISIONS AND THE DELINQUENT COLLECTION PROVISIONS OF THE INTERNAL REVENUE CODE ARE APPLICABLE TO COMPENSATION RECEIVED BY EMPLOYEES WHO ARE CITIZENS OF GUAM, BY VIRTUE OF THE ORGANIC ACT, AND BY EMPLOYEES WHO ARE RESIDENT ALIENS.

TO THE SECRETARY OF THE INTERIOR, MAY 4, 1956:

BY LETTER OF FEBRUARY 13, 1956, THE ADMINISTRATIVE ASSISTANT SECRETARY OF THE INTERIOR PRESENTED FOR OUR DETERMINATION TWO QUESTIONS WHICH HAVE ARISEN UNDER THE INCOME TAX LAWS IMPOSED IN THE TERRITORY OF GUAM, AS FOLLOWS: FIRST, WHETHER REMUNERATION PAID IN GUAM BY THE UNITED STATES OR ANY AGENCY THEREOF TO EMPLOYEES WHO ARE UNITED STATES CITIZENS ONLY BY VIRTUE OF THE COLLECTIVE NATURALIZATION PROVISIONS OF THE GUAM ORGANIC ACT, OR TO EMPLOYEES WHO ARE ALIENS TO BOTH GUAM AND THE UNITED STATES, IS SUBJECT TO WITHHOLDING FOR THE GOVERNMENT OF GUAM UNDER THE GUAM INCOME TAX LAWS AND, SECOND, WHETHER NOTICES OF LEVY ISSUED BY THE GOVERNMENT OF GUAM FOR COLLECTION OF INCOME TAX DUE THE GOVERNMENT OF GUAM FROM EMPLOYEES OF THE UNITED STATES SHOULD BE HONORED BY FEDERAL AGENCIES.

THE INCOME TAX LAWS IN EFFECT IN GUAM WERE ESTABLISHED BY SECTION 31 OF THE GUAM ORGANIC ACT, APPROVED AUGUST 1, 1950, 64 STAT. 392, 48 U.S.C. 1421I, WHICH PROVIDES AS FOLLOWS:

THE INCOME-TAX LAWS IN FORCE IN THE UNITED STATES OF AMERICA AND THOSE WHICH MAY HEREAFTER BE ENACTED SHALL BE HELD TO BE LIKEWISE IN FORCE IN GUAM.

THUS, THE INCOME TAX LAWS OF GUAM ARE NOT LAWS ENACTED BY THE GOVERNMENT OF GUAM BUT, ON THE CONTRARY, CONSIST OF THE FEDERAL INCOME TAX LAWS ENACTED BY THE CONGRESS OF THE UNITED STATES AND APPROVED BY THE PRESIDENT OF THE UNITED STATES AND ADOPTED AS THE INCOME TAX LAWS OF GUAM BY THE GUAM ORGANIC ACT, LIKEWISE A FEDERAL LAW ENACTED BY THE CONGRESS OF THE UNITED STATES AND APPROVED BY THE PRESIDENT OF THE UNITED STATES. HENCE, NEITHER THE WELL-ESTABLISHED CONSTITUTIONAL PRINCIPLE PRECLUDING STATES, TERRITORIES OR POLITICAL SUBDIVISIONS THEREOF FROM REGULATING, IMPEDING, CONTROLLING, OR BURDENING THE UNITED STATES IN THE EXERCISE OF ITS GOVERNMENTAL FUNCTIONS, NOR THE ACT OF JULY 17, 1952, 66 STAT. 765, 5 U.S.C. 84B, RELATIVE TO THE WITHHOLDING OF STATE AND TERRITORIAL INCOME TAXES BY FEDERAL AGENCIES WHERE THE LAWS OF THE STATE OR TERRITORY PROVIDE THEREFOR, IS APPLICABLE IN THIS INSTANCE.

IT SEEMS APPARENT THAT THE CONGRESS IN USING IN SECTION 31 THE WORDS "INCOME-TAX LAWS IN FORCE IN THE UNITED STATES OF AMERICA AND THOSE WHICH MAY HEREAFTER BE ENACTED" MUST HAVE INTENDED TO APPLY TO GUAM THE ENTIRE BODY OF LAWS GENERALLY REFERRED TO AS THE INTERNAL REVENUE CODE. SINCE THAT BODY OF LAWS INCLUDES THE PROVISIONS WITH RESPECT TO WITHHOLDING AND TO ENFORCEMENT OF COLLECTION BY LEVY, THOSE PROVISIONS MUST BE CONSIDERED IN FORCE IN GUAM EQUALLY WITH ANY OTHER PROVISION CONTAINED THEREIN. THIS VIEW IS IN ACCORD WITH THAT EXPRESSED BY THE DISTRICT COURT OF GUAM IN VARIOUS CASES INVOLVING THE INCOME TAX LAWS OF GUAM. SAID COURT HAS RULED THAT SECTION 31 OF THE GUAM ORGANIC ACT IMPOSED A TERRITORIAL INCOME TAX TO BE PAID TO AND COLLECTED BY PROPER OFFICIALS OF THE TERRITORIAL GOVERNMENT; THAT WHEN THE CONGRESS OF THE UNITED STATES CREATED THE TERRITORIAL INCOME TAX IT INTENDED THAT SUCH TAX SHOULD BE ASSESSED AND COLLECTED ON THE SAME BASIS AS FEDERAL INCOME TAXES; AND THAT THE PROVISIONS IN THE UNITED STATES INTERNAL REVENUE CODE TO ENFORCE THE COLLECTION OF INCOME TAXES ARE "INCOME TAX LAWS" WITHIN THE MEANING OF SECTION 31 AND ARE AVAILABLE TO PROPERLY AUTHORIZED OFFICIALS OF THE GOVERNMENT OF GUAM, SUBJECT TO THOSE NONSUBSTANTIVE CHANGES IN NOMENCLATURE AS ARE NECESSARY TO AVOID CONFUSION AS TO THE TAXING JURISDICTION INVOLVED. SEE LAGUANA V. ANSELL, 102 F.1SUPP. 919, AFFIRMED 212 F.2D 207, CERTIORARI DENIED, 384 U.S. 830; WILSON V. KENNEDY, 123 F.1SUPP. 156; GOVERNMENT OF GUAM V. KAANEHE, 124 F.1SUPP. 15; HOLBROCK V. TAITANO, 125 F.1SUPP. 14.

SINCE THERE APPEARS TO BE NO DOUBT THAT BOTH ORGANIC ACT CITIZEN EMPLOYEES AND RESIDENT ALIEN EMPLOYEES ARE SUBJECT TO THE GUAM INCOME TAX LAWS, IT MUST BE HELD THAT BOTH CATEGORIES OF EMPLOYEES ARE SUBJECT TO THE PROVISIONS OF THAT LAW WITH RESPECT TO WITHHOLDING AND TO COLLECTION BY LEVY AND, SINCE THAT LAW IS A FEDERAL LAW AS INDICATED HEREINABOVE, FEDERAL AGENCIES EMPLOYING SUCH PERSONS IN GUAM MUST COMPLY WITH SUCH PROVISIONS.