Request for Advance Decision Regarding Tax Liens

GAO was asked for an advance decision with respect to notices of three tax liens placed on the property of a Federal contractor and served on the Federal agency in favor of the Government of Guam. Two of the liens were imposed to collect the Guam territorial income tax, and the third was imposed to collect the Guam business privilege tax. Federal agencies must honor Guam's liens for income tax liability since these liens have the same force as a Federal tax lien. The categorization of the tax as a territorial income tax does not defeat the Federal nature of the law. The Governor of Guam has been delegated the lien and levy power associated with this tax. Thus, Federal agencies located on Guam are subject to liens imposed by the Governor of Guam for the collection of that tax on those doing business with those agencies. However, the Guam business privilege tax is not imposed by Federal statute but by the Government Code of Guam. Thus, this tax is not Federal in nature; it is a purely territorial tax, and liens for the enforcement of such taxes are generally not enforceable against Federal agencies.