PUBLIC

I lli1 NO. 3-11 H.B. No. 144, H.D.1, S.D.2 1

(l) "Fimdol in;titotioo" moon; omy miog; ooct loom 2 association,

or any **incorpor<~ted** savings and loan company, trust 3 company, mortgage banking company, consumer finance company
or 4 other financial corporation. 5 6 **kno~rn, ~rl1ich**  is designed
or may be converted

to expel or hurl

a 7 projectile

or projectiles

by the action of an explosion,

or 8 release,

or an expansion

of gas, includin!J but not limited
to 9 guns, except

a device designed

or redesigned
for use solely
as a 10 **signalin~J,** limethro\·ling, spearfishing,

or industrial device,
or 11

a device which hurls

a projectile

by means of the release
or 12 expansion

of carbon dioxide
or air. 13

(k) "Gross revenue" means the total amount of money Ol" 14 the value of other consideration received from selling real or 15 persona

1 property

in the Commom1ea

1 th, from leas

1 ng prupe rty 16 employed

in the Cormnom1ealth,

or from perfonning se1·vices

in the 17 Commom·malth. Gross revenue inc1udes the gross receipt:;, cash or 18 accrued,

of a person received

as COI:!pensation

for personal services 19 not in the **fan~** of salaries

or wages as defined
in this section, 20 and the gross receipts

of a business derived f1·oo trade, business, Zl commerce

or sales and tlie value proceeding

or accruing from the 22 sale of tangible personal property,

or service,
or both, and all 23 receipts, actual or accrued
by reason
of the capital
of the business 24 en!]aged in, including interest, discount, rentals, royalties, fees, 25 or other emoluments huwevel' designated
and 11ithout any deductions

on Page

5PUBLIC **~NO.** 3-ll H.B. No. 144, H.O.l, S.D.2 1 account
of t11e cost of property sold, the cost of materials used, 2 labor cost, taxes, royalties, interest
or discount paid or any 3 other expenses vJhatsoever. Gross revenue shall not include the 4 following: 5 6 7

(1) Refunds and cash discounts allo\"Jed and taken; (2) r,loney received und held in a fiduciary 8 **ca~acity;**

or 9

(3) Hages and salaries which are taxed under 10 Chapter Two of this Act. 11

(1) "Lease or rental" means any contract, oral, written
or 12 implied,

by which

a person gives the use and possession

of personal 13 or real property

to another person and includes the use of any of 14 the goods, merchandise

or commodities specified

in Section 402 of 15 this Act. 16

{m) "Local territorial income tax" means the income tax 17 lai"JS in force in the United States Hhich car:1e into force in the 18 Commonwealth pursuant

to Section 601 of the Covenant

as a local 19 income tax of the Commom1ealth. 20

(n) "Manufacturer" means any business engaged
in 21 combining

or processing components

or materials

to incr·ease their 22 value for sale in the ordinary course of business. 23

(o) "l·!onth" means cale11dar month. 24

(p) "Off-shore banking corporation" means
an entity 25 incorporated

in the Comrnom1ealth

of the Northern **r~ariana** Islands, Page
GPUBLIC IA'N NO. 3-11 H.B. No. 144, H.D.l, S.D.2 1 **~1hose** principal purpose is: ' 3 4 5

(1) negotiating, making and exte11ding loans
to borrowers
who are not residents

or citizens

of the Commonwealth

of the Northern Mariana Islands ;or (2) borr01-1ing from lenders who are not reside11ts 6

or citizens

of the Commonwealth

of the Northerr1 l·lariana 7 Islands, 8

An off-shore banking corporation shall not transact business

as 9

a retail bank within the Commom1ealth

of the rlorthern f1ariana 10 Islands. 11 12 13 14 15 16 17 18 19 10 21 22 23 24 25

(q) "Person" means: (1) any individual, estate, finn, corporation, company, joint venture, association, partnership, trust, receiver, club, syndicate, cooperative association

o1· any other entity;
or (2)

a foreign gover11ment,
the United States, th<: Trust Territory

of the Pacific Islands, the Commonv1eulth, or any agency or instrumentality

of these entities, (r) "Public utility" mea11s

a person engaged

in the sale of: (1} electric energy, gas, water, garbage,

or seHerage disposal services; (2) public transportation services

as a common carrier;

or {3) telepho11e, telegraph,

or television services.

Puye

7PUBLIC lA\11' NO. 3-11 H.ll. No. 144, H.D.l, S.D.2 1

(s) "Rebate" r.1eans
an adjustment, reduction, return, 2 credit, nontaxable refund,
or other nontaxable payment
of all or part 3 of any tax, as provided

by the Commonwealth

of such amount
of the 4 taxes paid by
a person. The tenn "rebate" shall apply only to any 5 tax imposed

on income **fror~** sources within the Commonwealth.

The tern 6 "rebate" shall not apply to any tax imposed

on income exempted

by 7 subsection (aa)(l)
of this section. B

(t) "Sale" means the transferring, giving or exchanging

of 9 personal
or real property
or services
of any kind for an agreed **sur.~** 10 of money or other valuable consideration

and includes the use of any 11 of the goods. merchandise

or commodities specified

in Section 402 of 12 this Act. 13

(u) "Sources within the Commonwealth"

as it relates
to 14 income means: 15 16 17 lB 19 20 21 22 23 24 25 26

{1) all **~;ages** and salaries paid by the Commomvealth Government

to any employee
or other individual rendet'ing services

to the Commonwealth Government, whether
or not such services are perfonned within the **Comr~onwealth;**

or {2) all wages and salaries paid to any employee

by the Government

of the Trust Territory

of the Pacific Islands, the Government

of the United States of America, or
a person incorporated, registered,

or other11ise doing business

in the Commonwealth; PROVIDED, that such emp
1 oyment
is physically perfomed

in the Com1.1onwea lth, except for any employment period less than 45 working days or 30 continuous **~10rking** days per year, Page

81 2 3 4 5 6 7 8 Act. 9

PUBLIC lll.l'l 1.\'0. 3-11 H.B. No. 144, H.D.l, S.D.2 (3) All funds received

by a person other than an employee
or other individual under any contract

to which the person and the Commomvealth

are parties; PROVIDED, that this subsection shall apply solely to contracts entered into on or after the effective date of this Act. (v) "Taxpayer" means any person subject
to tax under this (w} "Transient occupant

of a room or rooms in a hotel, 10 lodging house or similar facilities "means those persons who occupy 11 such facilities

in a specific location for less than thirty (30) 12 consecutive days. (x)

11 User fee" means the administrative costs associated 14 with the delivery

of a department's

or agency's ministerial services. 15

(y) "Utility rate" means the total costs, including 16 personnel compensation

and capital costs, associated 1•ith the 17 operation, installation,

and delivery
of public utilitv services

to 18

a person. (z) "Wages" and "Salaries" means any compensation

for 20 services, such as commissions, fees, compensation, educational 21 benefits, emoluments, bonuses, and every and all other kinds of 22 compensation paid for, credited,

or attributable

to personal 23 services performed

by an employee
or other individual; PROVIDED, 24 that vtages and salaries shall not include the following: {1) Wages and salaries received from the United 26 States
by members
of the active Armed Forces of the United States, Page

9PUliLIC LAW NO. 3-11 H.IL r!o. 144, ltD. 1, S.D.Z 1

(2) Reasonable
per diern and travel allOI·JJnces

to 2 the extent that they do not exceed any comparable Cor:unonwealth 3 Government rates. 4

(3) Rental value of a home furnished

to any 5 employee
or
a reasonable **r:~ntal** al1m·tance paid to any 6 employee

to the extent the illlowance

is used by the 7 employee

to rent or provide

a home. 8

{4) Any payment
of medical
or hospitalization 9 expenses made by an employer

or insurance company

to or on LO behalf of an er.1ployee
or insured. 11

{5) Payments made to or on behalf of an employee 12

or to his **b~;neficiary** frorn

n trust, annuity,
or retirement 13 program,

to the extent
of any contributions made by the 14 employee; Provided, that the legislature will appropriate 15 these taxes to the Retirement Fund ilS
a part of the 15 **Common~:eillth** Govermnent's contribution. 17

{6) Any paymC"nt
in the fom of
a scholarship, 18 fellm1ship,

or stipend made: to any employee 1vhile he is
a 19 full-time, bona fide student

at an educational institution. zo
(aa) "Hhulesaler" means any business engaged
in the sale 21

of tangible personal property

to another for resJ"Ie for direct 22

or indirect economic benefit. 23
{bb) "Year" 1:1eans calendar year. 24 Section 105. Other Definitions.

In thro event it is appropridte 25 to further define the tenns used in this Act, the Director may fu1·ther Page 10PUBLICIA'i'1NO.3-11H.B.No,144,H.D.l,5.0.21definethetermsbyregulation,takingintoaccountthedefinitions2anduseofthetemsintheUnitedStatesInternalRevenueCodeof319!i4,asamended,andtheapplicableregulations,thereto.4Section106.Exemption.TheUnitedStatesand5CommorwealthGovernments,theirdepartments,agenciesand6instrumentalities,areherebyspecificallyexemptedfrol'lany7liabilitytopayanytaximposedbyChapterThreeofthisAct,8ChapterII.HaneandSalaryTax,9Section201.Wagea11dSalaryTax.(a)Thereisimposedan10annualtaxonall11agesandsalariesfromsourcesthe11Co:r.rnonwealthreceivedbyanindividual.Thetaxbedetemined121314)5161718192021222324ioaccordancetheschedule:Ifthegrossannualandsalariesofanorotherindividualare:(o)$0to1,000(b)$1,001to5,000(o)$5,001to7,000(dI$7,001to15,000(e)$15,001to22,000(f)$22,001to30,000(g)$30,001to40,000(hI$40,001to50,000(i)$50,001andoverThetaxonthegrossannualwagesandsalariesNoTax2%ofamountover$03%4%5%6%7%B<9%PUBLIC Ll'M NO. 3-ll H.B. No. 144, H.D.I, 5.0.2 1 Chapter Ill. **Gro~s** Revenue Tax 2 Section 301. Tax on GI'OSS Rcver\Ues. There is imposed

an anrtual 3 tax upon the gross revenues earned
by every business, except

as 4 otherwise provided

in this Chapter. 5 The tax shall be detennined

in accordance with the **fo1l01~ing** schadule: 6 7 8 9 10 11 12 13 14

If the annual gross revenue ean1ed
i; bet11een: (') $0 to S,OOO (b) $5,001 to 50,000 (c) $50,001
to 100,000 (d) $1()0,001

to 250,000 (c) $250,001

to 500,000 (f) $500,001

to 750,000 (g) $750,001 and over
The tax on the total annual gross revenue earned is: no tax 1.5% of amount over S·D " 2.5% 3% 3. 5% 5% 15 Section 302. }ax on Agricultural Producers
and **Fisherie~.**
The 16 provisions

of Section 301 and the taxes imposed thereunder shall not 17 apply to businesses engaging

in agricultural production
and fisheries; 18 PROVIDED, **ho~<mver,** these businesses shall be taxed at the rate of one 19 percent (1%) of gross revenues

in excess of $20,000.
All businesses 20 claiming this exemption shall file the returns required

by Section 805 21 of this Act whether

a tax is due or not. 22 Section 303. Tax on Hanufacturers

and llholesalers

.• The provisions 23 of Section 301 and the taxes imposed thereunder shal1 apply to businesses 24 **~thich** tlerive gross revenue from manufacturing

and Hholesaling; PROVIDED, 25 howevet', the gross revenue derived from these activities shall be taxed Page 12

## PUBLIC LlM 

## NO. 3-ll 

# H.B. No. 144, H.D.l, S.D.Z 1 at
a maxilr.UI:l rate of 

## t1·10 percent (2%). All persons claiming this 2 

## exemption shall file the returns rf!CJUired

by Section 805 

## of this Act 

# 3 whether

a tax is due or not and shall maintain separate records and 4 

## accounts shOvling gross revenues derived from manufacturing, Hholesaling, 5 

## retailing and other busir1ess operations.

All persons claiming this 

# 6 exemption shall disclose such records and accounts upon request for 

# 7 verification

by the Director. 8 

## Section 

# 304. Tax on Sanks, **Bar~king** 

## Institutions, Buildinci and 

# 9 Loan .n.ssoaiations,

and other Financial Institutions. 10

(a) Section 301 shall not apply to any bank, banking 11 

## institution, building and loan association,

or other financial 12 institution; P!\OVID£0, ho11ever, these businesses shall t:.e taxed 

# 13 at the greater
of five percent 

# (5%) of the net incor:1e received 14 

## from such business

or t1·ro percent (2%) 

## of gross revenues. 

# 15

(b) For the purpose
of this Section, "net income" shall 16 

## tilean the gross income of such taxpayer received from all sources 17 

## less the **follo~Jing deductio:-~s**  

## therefrom: 18



## (1} 

## Salaries

or bonuses paid and other 19 

## compensation from personal services; 

# 20 

# 21 22

{2} 

## Interest
or discount paid; 

# (3) Rents paid; 

# (4) Ordinary operating expenses such as supplies, 23 

## utility services, insurance premiums other than for life 24 insurance; PROVIDED, tl1at any deductible insurance expense Page 13PUBLIC LAl-1 NO. 3-11 H.B. No. 144, H.D.1, S.D.2 1 shall be **allo~1able** only to the extent that such

a premium 2

is applicable

to the tax period against which it is claimed; 3

(5) loans or obligations charged off the books of 4 the bank as losses unless charged against reserves then in 5 existence; 6

{6) Losses other than loan losses, such as those 7 occasioned

by fire or other casualty, theft, embezzlement, 8 and the like, but only to the extent not covered
by insurance 9 proceeds collected; (7) Transfers from earnings

to reserve for bad 11 debts or other contingencies provided for; 12

(8) Niscellaneous direct expenses such as legal, 13 advertising, auditing,
and the like; and 14

(9) Loss on property sold and depreciation

on 15 property m;ned. 16

(c) All deductions allowed pursuant

to subsection

(b) 17 shall be
1 imited to the portion attributable

to the income earned 18 within the Northern Nariana Islands. 19

(d) Off-shore banking corporations shall be exempt from 20 any tax under this Section
or Chapter. 21 Chapter IV. Excise Taxes. 22 Section 401. Alcohol and Tobacco Excise Taxes, 23

(a) Commercial Use. For the privilege

of the first sale 24 or use of alcohol and tobacco imported into the Commonw-ealth, there 25 is imposed upon all such persons selling alcohol and tobacco, excise 26 taxes as specified

in Subsecticn
(c) of this Section. Page 14PUBLICLI!.J#NO.3-11H.!l.No.144,H.D.l,5.0.21(b)PersonalUseandConsumption.Anyinternational2passengerdisembarkingfror:tashiporanairplanemayimportfor3personaluseandconsumptionexemptfromtheexcisetaxesimposed4bythisSection:5(1)anamountofcigarettesnottoexceed6thirty{30)packagesof(20)cigarettesperpackage;7(2)anamountofdistilledalcoholicbeverages8nottoexceedthree-fifths(3/5)ofagallon;9(3)anamountof1vineandsakenottoexceedone10gallon.1112(c)Rates.(1)Cigarettes,fifteencents($.15)perevery13b1enty(20);14(2)Tobacco,otherthancigarettes,fiftypercent15(50%)oftheinvoicepriceofthetobacco;16(3}Bee1·andmaltbeverages,tencents($.10)per17canorbottleoftv1elvefluidouncesorfractional.pal'tthereof;18(4)Distilledalcoholicbeverages,onedollat·and19fortycents($1.40)perfifth(1/5)ofagallon;20{5)1-/ineandsake,threedollars($3.00)per21gallon;Provided,thatthistaxshallnotapplytoany22religiousorganizationwhichisimporting,receiving,or23purchasingintheCom:nomvealthsacramental1·1ineforusein24thereligiousritesufsuchorganization.TheDil'ector25shallprovidebyregulatior1forthl?reimbursementof11inePage15PUBLIC IJlJ•l NO. 3-11 H.B. No. 144, 1-I.D.I, S.D.Z 1 taxes paid by any business selling sacramental wine to such 2

an organization. 3 Section 402. General Excise Tax. For the privilege

of first 4 selling, using, manufacturing, leasing
or renting goods, merchandise, 5 or commodities imported into the Commonwealth, there
is imposed upon 6 all such persons

an excise tax as specified herein: 7

{a) Soft drinks and nonalcoholic beverages, five cents 8 ($.05)
on each tv1elve fluid ounces
or fractional part then:of; 9

{b) Foodstuffs
for human consumption,

one percent (1%) 10 ad valorem; 11

(c) Agricultural comr.;odities, such as fertilizers, **~eed,** 12 animal feeds, pesticides
and herbicides,
one percent {1%) ad valorem; 13

(d) Perfllloery, articles

of perfumery including cologne and 14 other fragrances l'lhether

in sachets
or otherwise, twenty percent (20%) 15 ad valorem; 16

(e) Cosmetics
and toiletries, including
all p:·eparations 17 used as applicatfons

to the hair or skin, lipsticks,
eye shadows and 18 mascara, pomades, powders, **~akeup** and other toilet preparations

not 19 having medicinal properties, fifteen percent (15%) ad valorem; 20

(f) Educational materials purchased

by a school or 21 library, one percent (1%) ad valoreM; 22

(g) Prescription drugs and medicines,
one percent (1%) 23 ad valorem; 24 25

(h) Construction materials, three percent (3%) ad valorem; (i) All other property not othet"'Wise provided for by law, 26 five percent (5%) ad valorem. Page lGPUBLICll\1'/NO.3-11H.B.No.144,H.D.1,S.D.21Section403.LiquidFuelTaxes,2(a)Gasoline,Oinsel,andOtherLiquidFuelTax,Forthe3privilegeoffirstselling,usingordistributinggasoline,oil,4dies<:l,orotherliquidfuel,otherthanaviationfuel,importedinto5theCommonwealth,thereisimposedanexcisetaxattherateoften6cents($.10)pergallon.7{b)AviationFuelTax.Fortheprivilegeoffirstselling,8usingordistributingaviationgasorotheraviationfuelimportedinto9thethereisherebyimposedanexcisetaxattherateof10threepercent(3%)advalorem.TheDirectorofFinancemayreduceor11byregulationtheaviationfueltaxuponanairlineuponfinding12thattheairline11illincreaseitsflightscheduleintoandwithinthe13Commonh'ealthtoalevelresultinginbenefitstothein14excessofthelossofrevenueunderthissection.15Section404.BeveraaeContainerExciseTax,16(a)Non-AlcoholicContainers.isimposedanexcise17taxupontheprivilegeoffirstsaleofsoftdrinkandothernondairy18beveragecontainersintheamountoffourcents($.04)percontainer19uponthefirstseller,20(b)AlcoholicContainers.Thereisimposedanexcisetax21upontheprivilegeoffirstsaleofeachcontainerofbeer,aleor22othermaltbeverageintheamountoffourcents($.04)percontainer23uponthefirstseller.24Section40?.Exemption,Anyproductsubjecttotaxunderthis25chapterwhichisnotreceivedbyoriscertifiedbythepersonliablePage17PUBLIC U\.11 NO. 3-11 H.B. No. lH, H.D.l, 5.0.2 1 Section 403. Liquid Fuel Taxes. 2

(a) Gasoline, Diesel, and Other Liquid Fuel Tax, For the 3 privilege

of first selling, using or distributing gasoline, oil, 4 diesel,
or other liquid fuel, other than aviation fuel, imported into 5 the Commonwealth, there is imposed

an excise tax at the rate of ten 6 cents ($.10) per gallon. 7

(b) Aviation Fuel Tax. For the privilege

of first selling, 8 using or distributing aviation gas or other aviation fuel imported into 9 tile CommomYealth, there is hereby imposed

an excise tax at the rate of 10 three percent (3%) ad valorem. The Director

of Finance may reduce or 11 waive by regulation
the aviation fuel tax upon an airline upon finding 12 that the airline 1·1ill increase its flight schedule into and within the 13 CommomYealth

to a level resulting

in benefits

to the **Commom~ealth**

in 14 excess of the loss of revenue under this section. 15 Section 404. Beveraae Container Excise Tax. 16

{a) **i'lon~Alcoholic** Containers. There is imposed

an excise 17 tax upon the privilege

of first sale of soft drink and other nondairy 18 beverage containers

in the amount
of four cents ($.04) per container 19 upon the first S(!ller. ZO

(b) A!..££_ho1ic Containers. There is imposed

an excise tax 21 upon the privilege

of first sale of each container

of beer, ale or 22 other malt beverage

in the amount
of four cents ($.04} per container 23 upon the first seller. 24 Section 405. Exemption.
Any product subject
to tax under this 25 chapter which is not received

by or is certified

by the person liable Page 171 2 3 4 5 6

I bl Every **persor~** subject section shall make

a monthly return received from the sale of beverages thereon prior to the twentieth day Section 502. Hotel 0CCUQar.cy (a) An occupancy tax is PUBLIC Ll\.\<1 NO. 3-11 H.B, No, 144, H.D.l, S.D.2 to tho tax imposed

by this to the Director
of all amounts and shall pay the taxes due of the succeeding month. Tax. imposed upon transient occupants 7 of a room or rooms in
a hotel, lodging house, or similar facility

of 8 ten percent (10%) of the amount charged
or paid for the accommodations. 9 This tax 'applies and is collectible when the payment

is made, 10

(b) Every person subject
to collect the tax imposed
by this 11 Section shall make

a monthly return
to the Director
of all amounts 12 received from such charges for lodging and shall pay the taxes due 13 thereon prior to the twentieth day of the succeeding month. 14 Section 503. Business License Fees, (a) Business License Required.
Any person engaging

in 16 business

as a condition precedent

to engaging

or continuing

in such 17 business, shall obtain from the Director
of Commerce and Labor

a 18 license
to engage
in or conduct such business. (b) In no event shall

a business

be required

to purchase 20 more than one general business license for the same lint! of business 21 for any location

or locations

in the Commonwealth. 22

(c) **1~·** Licenses issued under this Section shall not 23 be transferable

and shall be valid for one year. 24

(d) Fees. The following annual fees shall be paid to the 25 Director

of Commerce and Labor for the respective license
at the time 26 of issuance
or renewal: Page 1912345578910111213141516(1)(2)(3)I4I(5)(5)(7)(8)(9)(10)PUBLICIl\!•1NO.3-11H.B.No.141,H.D.l,S.D.2Banks,fivehundreddollars;Offshorebankingcorporations,onethousanddollars;Securitiesdealers,threehundreddollars;Insurancecompar<ies,threehundreddollars;Insurancebrokers,onehundreddollars;Insuranceagents,seventy-fivedollars;Publicutilities,threehundreddollars;Manufacturers,fiftydollars;Hholesalers,fiftydollars;Roadsidevendorssellinglocalagriculturalandfisheryprnducts,fivedollars;and(11)GeneralbusinesslicensecoveringallotherbusinessesunlessprovidedotherwisebythisAct,fiftydollars.(e)Rene\·1'!1.Alicenseemayrenewhislicenseuponthe17expirationthereofbythepaymerltofthear<r<uallicensefee.18(f)Conditior<sforRevocationorSuspension.(1)The19DirectorofCommerceandLabormayrevokeorsuspendanylicense20issuedunderthissection,uponfindingafterb1o1·1eekspublicnotice21andahearingconductedpursuanttotheprovisionsofSections8,9,2210,and11ofTitle17oftheTrustTerritoryCodethat:232425(A)Theapplicationofthelicenseecontainsfalseorfraudulentinformation:(B)Thelicenseebribedorotherwiseunla11fullyPage201 2 3 4 5 6 7 8 g 10 11 12 13 14 15 16 17

PUI3LIC Ll\.1'1 NO. 3-11 H.l3. tlo. 144, H.D.l, S.D.2 influenced
any person
to issue the pen11it other than on the **~erits** of the application; :c) The licensee presented false or fraudulent information

to any person
in support
of his application;

or (D) T11e licensee violates any of the provisions of the Commom1ealth

of the northern l!ariana Islands **lat~S** or any of the rules and regulations issued thereunder. (2) Any person aggrieved

by a license suspension

Ot" t•evocation shall be entitled

to a review of the same by the Commomtealth Trial Court upon \l'ritten appeal made 1dthin thirty days from the date the license suspension or revocation decision

is issued. Such **revie1~** shall be brought p11rsuant

to the provisions

of Sections

12 and 13 of Title
17 of the Trust Territory Code. (g) Upon request the Director

of Commerce and Labor Sha1l 18 transmit

a listing, and monthly update,
of all business licenses 19 issued
to the Department

of Finance. 20

(h) Unless the Director

of Commerce and Labor provides 21 otherwise, this sectior. shall not affect public health or alcoholic 22 beverage control licensin-;J. 23 Section 50<1. Ad'Tiiralty and 1•1aritime Fees, Section

5 of Title
19 24 of the Tt·ust Territory Code is amended
to read as folltJ1·1s: "§5. Fees. There shall be paid to the Director for Pilge 211 2 3 4

PUBLIC I11W NO. 3-11 H.B. No. 144, H.D.l, S.D.2 original registration

of a vessel the sum of twenty dollars and for each re-registration

the sum of ten dollars.
All such fees collected shall be remitted to the Director." 5 Section 505. Motor Vehicles and Operator

1 s Fees. 6

(a) Section
54 of Title 83 of the Trust Territory Code is 7 amended
to read as follows: 8 9 !0 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 "§54. Registration Fees. There shall be paid to the Director

of Finance for the registration

of vehicles the following fees: (a) bicycles, one dollar and fifty cents; (b) mopeds and motorcycles

up to lOOcc, five dollars; (c) motorcycle over lOOcc, ten dollars; (d) jeeps, sedans, automobiles,

and other· motor vehicles not exceeding

6 passengers

or **~** ton capacity and weigl1ing less than 2,000 pounds, twenty-five dollars; (e) pickups, trucks, buses and self-propelled equipment
and machinery

by gross vehicle **~!eight.** Gross vehicle \·Ieight
in pounds
as specified

by the manufacturer at the time of the original sale or entry into the Commonwealth; **~;hichever**

is greater: (i) under two thousand nine-hundred ninety-nine pounds
or fraction thereof, twenty-five dollars; (ii) three thousand

to four thousand nine-hundred ninety-nine pounds or fraction thereof, fifty dollars; Page 221234567891011PUBLICIJ\I'iNO.3-11H.B.No.144,H.D.l,5.0.2(iii)fivethousandtoseventhousandfour-hundredninety-ninepoundsorfractionthereof,one-hundreddollars;(iv)seventhousandfive-hundredpoundsandover,two-hundreddollars.(f)boys,twenty-fivedollars.(g)allotherself-propelledvehicles,fiftydollars.(h)forduplicateorsubstituteregistrationcardsandplates:subsections(b)and(c),twodollat·sandfiftycents;subsections(d),(e),and{f)fivedollars;andsubsection(g),tendollars."(b)Section151ofTitle83oftheTrustTerritoryCodeis12herebyamendedtoreadas13141516171819202122"§151.0p€rator'slicense-Fees.NopersonexceptthoseexpresslyexemptedintheChaptershalldriveanymotorvehicleuponahighr1ayintheCommonwealthunlesssuchpersonhasbeenlicensedasanope1·atorunderthisChapter.AfeeoffifteendollarsshallbepaidtotheDirectoroftheDepartmentofFinanceforeachsuchlicenseissued.AfeeoffivedollarsshallbepaidtotheDirectoroftheDepartmentofFinanceforeachduplicateorsubstitutelicenseissued."(c)Subsection{4)ofSection155ofTitle83oftheTrust23TerritoryCodeisherebytoreadasfollous:2425"(4)Aft:!eoffivedollarsshallbapi!.idtotheDirectoroftheDepartmentofFinanceforeachPage?31 2 3 4

PUBLIC LAW NO. 3-ll H.B. No, 144, H.O.l, S.D.2 learner's permit issued.

A fee of five dollars shall be paid to the Oirl!ctor

of the Department of Finance for each duplicate

or substitute permit issued." 5 Section 506. Corporation Fees. Section

3 of Title 37 of the 6 Trust Territory Code is hereby amended
by adding

a **ne1~** subsection
(3) 7 as follows: 8 9 10 11 12 13 14 15 16 17 18
"(3). Fees. There is hereby levied and imposed the folloll'ing filing fees. which shall be paid to the Director

of the Department

of Finance prior to issuance

of a Charter and deposited

in the General Fund: {a) Domestic Corporation,

one hundred ($100.00) dollars. (b) Registration

of a Foreign Corporation, one hundred ($100.00) dollars, (c) Non-Profit Corpo1·ation,

ten ($10.00) dollars. 19 Section 507, **~~eapons** Fees. Section 580 of Title 63 of the Trust 20 Territory Code is amended
to read as follows: 21 22 23 24 25 26 "§580. Fees for licenses and identification car·ds. The fees for issuance and **rene1~al**
of annual licenses and identification cards as required

by this Chapter shall be as follows: (1) For an identification card, twenty-five ($25.00) dollars. Page 241 2 3 4 5 6 7

PUBLIC Lm'l NO. 3-11 H.B. No. 144, H.D.l, 5.0.2 (2) For

a dealer's license, three hundred ($300.00) dollars. (3) For

a manufacturer's license, one thousand ($1 ,000.00) dollars. (4) For

a **~1holesaler's** license, one thousand ($1,000,00} dollars. (5} For replacement

of lost, destroyed

or defaced 8 identification card, te11 {$10.00) dollars. g

Fees collected pursua11t

to this section shall be paid 10

to the Director

of the Department

of Finance and 11 deposited

in the General Fund." 12 Section 508. Amusement 11achines.

(a) There is imposed the 13 **follo~ting** annual license fees for the commercial operation

of 14 amusement machines

as follows: 15

(1) For amusement machines (other than poker or 16 similar amuse1nent machines) **~/hose** major element

is skill and 17 Hhose only reward or prize is limited
to additional games or 18 other use of the machine (e.g., Space Invaders, pinball lg machines, pool tables, etc.), one hundred fifty dollars 20 ($150.00) per machine. 21

(2) For amusement machines whose major element 22

is chance which provides

a reward or prize of value or for 23 poker or similar amusement machines,
two thousand five 24 hundred {$2,500.00) Dollars per machine. 25

(3) For all coin-activuted phonographs

or other Page 25PUBLIC LAW NO. 3-11 H.B. No. 144, H.0.1, 5,0.2 1 coin-activated music producing rrachines,
one hundred fifty 2 ($150.00) dollars per machine. 3

(4) For all coin-activated kiddie ride machines, 4 designed for children under the age of sixteen, t1-1enty-five 5 6 ($25.00) (b) dollars per machine. The tax imposed
by this Section shall be the liability 7 of any m·mer or lessee,
or any officer, manager,

or representative

of 8 any owner or lessee,
of the amusement device,
or any person operating 9 or managing any business
at rthich such amusement machine
is offered 10 for patronage. 11 Chapter VI. User Fees 12 Section 601. **~U'"''"-''"'"'''---''-"'""-"-G,enera**

1 , The directors

of the 13 principal executive branch departments
and independent agencies may by 14 regulatiorl adopted pursuant

to Sections

1 th1·ough

6 of Title
17 of the 15 Trust Territory Code impose user fees upon

a person
to recover the 16 administrathre costs associatt:d with the delivery
of the departrilent's 17 or agency's ministerial services

to that person, unless such regulation 18 is disapproved rlithin sixty days from the date of its submission

to the 19 legislature

by affirmative vote of either house of the Legislature, 20 Section 602. Utility Rate Fees

In General.
The Commonwealth 21 Utility Rate Com'mission

or its successor may by regulation adopted 22 pursuant

to Sections

1 through

6 of Title
17 of the Trust Territory 23 Code impose and change the utility rate charges established

by Sections 24 503 and 604 of this Act. Such charges may be established

at levels 25 sufficient

to recover the costs associated ltith the operation
and 26 delivery

of public utility services

to that person. Page 25PUBLIC U\l'l NO. 3-ll H,B. No. 144, H.D.l, S.0.2 1 Section 603, Electrical P01'1er Charges. There is hereby imposed

a 2 basic service charge
on consumers

of electricity

at the following rates: 3 4 5 6 7 8

If the Honthl,y Kilowatt Consumption

·j s: 0 to 800 801 to 2,000 2,001 to 25,000 25.001 and over Hour The Cost of the Total KilOI'Iatt Hours Consumed is: .05 pee kwh .05 .07 .08 9 The Commonwealth Utility Rate Commission

or its successor may increase 10 the charges

in this schedule

by regulation. 11 Section 604, \<later Charges. There
is hereby imposed

a basic 12 service charge of $.50 per one thousand gallons
or any fraction thereof 13 on consumers

of water. 14 Section 605, Collection.

The Director

of Finance shall administer 15 the collection

of all utility rate fees. 16 Section 606. Energy Assistance. This Chapter shall not affect 17 the financial assistance
for utility services provided under Public 18 Law 1-22. 19 Chapter VII. United States Net Income Tax 20 Section 701. Tax Relief. Every person subject

to the local 21 territorial income tax shall be entitled

to
a rebate of one hund1·ed 22 percent (100%)
of such tax for each taxable year beginning befom the 23 effective date of Sections 601 through 603 of the Covenant, except that 24 only the aoounts
of such tax imposed

on income derived from sources 25 IYithin the Cor:1monwealth shall be rebated. Page 27PUBLIC LAW hU. 3-11 H.B. No. 144, ILD.1, S.D.2 1 Section 702. Jax on Overpayments, There
is imposed
on every 2 person who is subject
to the local territorial income tax for any 3 taxable year beginning before the effective date of Sections 601 4 through 603 of the Covenant and **1~ho** has an overpayment arising from any 5 excessive credit, otf1er than the credit relating

to taxes **1~ithheld**

on 6 wages,

a separate, additional
tax for such taxable year equal to the 7 amount of such overpayment. 8 Section 703. Local Territorial Income Tax Returns. 9 10

(a) Persons filing 1tith the Commonwealth: (1) Any person required

to file

a !'eturn **1~ith** the 11 **Commom~ealth**

for
a tilxable year who claims

a rebate from the 12 **Connnom~ealth**

for such year shall attach

to the return
in respect 13

of which such rebate
is claimed, its computations relating

to 14 the detennination

of the amount
to be rebated. 15

(2) No person otherwise required

to file

a return 16 with the Commonwealth

for

a taxable year need file such return 17

if such requirement aris!!S solely
by virtue
of sucf, person's 18 status
as a citizen
or resident

of the Commom1ealth

fo1· such 19 taxable year and if such person derives

no income fro:n sources 20 without the CommomYeillth

for such taxable year; PROVIDED, 21 hO\·Iever, that such person shall be required

to file an 22 info!;national return
in the form and manner
to be prescribed 23

by the Director. 24

(3) If the return filed **1~ith** the Commom·1ealth

is 25 accompanied

by thG computations rt=quired

by parag!'aph
(1) of ?age 28PUBLICLANNO.3-11H.B.No.144,H.D.1,S.D.21thissubsection,orif,pursuanttoparagraph(2)ofthis2subsection,noreturnisrequiredtobefiled;liththe3Commomtealth,thentheactualpaymentoftirerebatedtax4totheCommonwealthshallnotberequired.56(b)Personsfiling1vitlrtheUnitedStates:(1)AnyperSOflrequiredtofileareturnwiththe7UnitedStatesforataxableyearwhoclaimsarebatefromthe8CommonwealthforsuchyearshallfilewiththeDirector,on9orbeforethedaterequiredtofilesuchreturn1·1iththe10UnitedStates,thecmnputationsspecifiedinpa1·agraph(1)11ofsubsection(a)ofthisSectionandacopyofthereturn12requiredtobefiledwiththeUnitedStatesforthetaxable13yea1·.14(c)TheDirectorshallcausetheclaimfornobatetobe15reviewedandauditedand,iftherebateisfoundinorder,shall16causetherebatetobepaidtosuchperson1'1ithinonehundredei9hty17(180)daysofthepaymentbytheUnitedStatesintotheTreasuryof18theofsuchamountofthetaxespaidbysuchpersonas19relatestoincomederivedfromsourceswithintheCommonwealth,20(d)Thedeterminationofornotapersonmustfi1e21underthisSection1·1iththeCommo1111ea1thor\·liththeUnitedStates22shallber,ladeinaccordancewiththeprovisionsofthisActandthe23rulesandregulationsoftheUnitedStatesInternalRevenueCodeof241954asamended.25Section704.Adjustmentl:.·IfanychangeorcorrectionismadePage29PUBLIC **ll\1~** NO, 3-ll H.B. No. 144, H.D.1, S.D.2 1 in a person's taxable income
by Commomvealth

or United States tax 2 authorities, appropriate adjustments

to the corresponding rebate 3 pursuant
to Sect ton 702 or the corresponding

tax pursuant

to Section II 703 l'lill be made under

a procedure

to be specified

in regulations 5 prescribed under Section 818 of this Act. 6 Chapter VIII. Administrative Provisions 7 Section 801. Legal Tender. The legal tender
of the Commonwealth 8 shall be **~hat** of the United States. 9 Section 802. General Fund. There is created

a General Fund into 10 which all revenues raised pursuant

to the tax laws and other revenue 11 la11s, and all monies received

by the **Commom~ealth,**

its departments, 12 agencies and instrumentalities
shall be deposited, unless otherwise 13 provided

by law. The Director may make such disbursements
from the 14 General Fund as may be authorized

by appropriation.

flo money shall be 15 paid out of the General Fund except
on appropriation enacted

by **la~1,** or 16 by the operation

of subsection
(a} of Section

9 of Article III of the 17 Constitution

of the Northern **r~ariana** Islands. 18 Section 803. Distribution

of Revenues. !9

(a) Except
as provided

by this Section, all revenues 20 raised pursuant

to this Act shall be deposited into the General Fund. 21

(b) The **r~arianas** Visitors Bureau shall receive 22 twenty-five percent
of the taxes collected under Section 404(b) 23 and seventy percent
of the taxes collected under Section 502. 24 Section 804. Wage and Salary Taxes. (a} **\~ithholding**

by the employer.
The tax imposed
by Page 30PUBLIC LAW NO, 3-ll H.B. No. **1~4.** H.D.l, 5.0.2 Chapter Two of this Act shall be collected

by the employer
of the 2 employee, based on
a Schedule

of **~Jithholdings** adopted

by the Director, 3 as and **~1hen** paid or credited

to the employee. Every employer required 4 to deduct and withhold the tax hereby imposed shall be liable for the 5 payr;K'nt and shall pay such tax to the Director.
Any employer **~1ho** 5 violates any of the provisions

of this Section shall be subject

to the 7 penalties prescribed

in this Chapter. 8

(b) Employer

to file return covering tax on compensation. 9

(1} The employer shall,
on or before the last day of 10 the month following the close of each quarter,

to wit: on or before 11 April 30, July 31, October 31, and January 31, pay the tax withheld, 12 and Make

a full, true and correct return **sho~ling** all 111ages and 13 salaries paid by him during the preceding quarter, and sh01ving the 14 tax due and withheld thereon, 1·1hich return shall be filed for payment 15 of the tax and shall include such other infonnation

as shall be 16 required
or prescribed

by the Director. Withholding returns filed by 17 employers without remitting

to the Director the required amount
to be 18 deducted and 1·tithheld shall be accepted

by the Director; PROVIDED, 19 that such returns submitted shall not be considered filed until the 20 actual remittance

of the amount due is paid to the Director. With 21 respect
to salaries aru:! **\~ages** paid out of public monies, the Director 22 at his discretion
may prescribe special fonns for, and different 23 procedures
and times for, the filing of such returns

by employers 24 paying such compensation,

or may, upon such conditions
and subject 25 to such rules
as he may prescribe from time to time, Haive the filing Page 31PUBLIC **11\1~** NO. 3-11 H.B. No, 144, H.D.l, 5.0.2 1 of any such returns. The Director may require more frequent returns 2 and payments

as he in his discretion feels an:! advisable,
but in no 3 case shall an employer

be required

to make returns and payments more 4 frequently than monthly, The Director, for good cause, may extend the 5 time for making returns and payments but not beyond the last day of 6 the first month next succeeding
the regular due date thereof. 7

(2) Every employer required

to deduct and lYithhold 8 any tax on the salaries and wages of any employee shall furnish
to 9 **eac~** such employee

on or before January

31 of the succeeding year 10 (or, if his employment

is terminated before the close of such calendar 11 year, on the day on which the last payment
of compensation

is made)

a 12 1vritten statement, **sho~ilng** the wages or salaries paid by the employer 13 to such employee during the year, and the amount
of the tax deducted 14 and withheld

or paid with respect
to such compensation.
Such employer 15 shall include with his final return for the calendar year, or shall 16 file on or before January 31,

a duplicate copy of each SPCh statement 17 r1ith the Director,
Any employer required

to furnish S'Jch statement 18 who failed
to file on the date prescribed thereof, except **~lith** regard 19 to any extension

of time for filing, shall be subject
to
a five dollar 20 penalty for each such statement not so filed,
in addition

to other 21 penalties prescribed

in this Chapter. The Director may grant to any 22 employer

a reasonable extension

of time, not in excess of sixty days, 23 with 1·espect
to any statement required

by this subsection

to be 24 furnished

to any employee

or to be filed, and may by re-gulation provide 25 for the furnishing

or filing of statements

at such other times and Page 32

# PUBLIC **~** 

# NO. 3-11 H.B. 

# No. 144, H.D.1, S.D.2 1 

# containing such other information

as may be required for the 2 administration

of this Act. The Director shall prescribe the fonn 3 

# of statement required

by this subsection. 

# 4

(3) 

# Any employer who violates any of the provisions

of 5 

# this Section shall be subject
to penalties prescribed

in this Chapter. 6



# (c) Taxes withheld

by employer held in 

# trust-Employer's 7 liability.

All taxes withheld

by any employer under Chapter
II shall 8 

# be held in 

# trust by such employer for the **Commom~ealth**



# and for payment 9 

# to the Director

in the manner and at the time required

by this Act. 10 If 

# any employer shall fail, neglect,

or refuse to deduct and withhold 

# 11 from the compensation paid to an employee,

or to pay over, the amount 12 of 

# the tax imposed, such employer shall be liable to pay to the 13 

# Commonwealth
the amount of the tax, which amount shall **(1~hether**



# or 14 

# not tax withholdings constitllting tnrst funds have been comingled 15 

# with said employer's assets) form



# a lien on the **er.~ployer's** 

# entire 16 

# assets, having priority over all other claims and

1 

# iens. Any employer 17 

# may recover from an employee any amount which he should have **~lithheld** 

# 18 but did not **~1ithhold** 

# from such employee's wages and salaries,

if he 19 

# has been required

to pay and has paid the amount to the Commonwealth 

# 20 out of his own 

# funds pursuant

to this Section. 

# 21

(d) No cause of action against employer for withholding. 

# 22 No employee shall have any right of action against his employer with 

# 23 respect
to any monies deducted from such employee's salaries and wages 

# 24 in compliance

or intended compliance with this Act and paid to the 25 

# Director.

Page 33PUBLIC I.M'I NO. 3-11 H.B. No. 144, H.D.l. 5.0.2 1

(e) Individual

to file return of earned income. Any 2 individual
who is paid or credited wages or salaries from an employer 3 who does not have

a place of business

in the Commonwealth

and does 4 not have an agent within the Comlilonwealth responsible
for making the 5 returns, withholdings,

and payments

of taxes on compensation required 6 by this Act, shall f1le

a return with and pay the tax due under this 7 Act to the Director.
Any individual
who is paid or credited wages 8 fr001 the United States or an instrumentality thereof shall be under 9 the .same duty as an individual
who is paid or credited 1·1ages or 10 salaries from an employer who does not have

a place of business

in 11 the Commomiea

1 th. 12

(f) The Commonwealth Retirement Board and all other 13 persons administering trust, annuity,
or retirement programs shall 14 be treated

as employers for the purposes
of this Section. 15 Section 805. Returns, withholdings,

and payment
of tax on gross 16 revenue from business. 17

(a) Every business,

on or before the last day of the 18 month following the close of each quarter,

to **1~lt:** on or before 19 April 30, July 31, October 31, January 31, shall pay, based on its 20 gross revenue
of the preceding quarter, the amount of tax imposed
by 21 Chapter III of this Act to the Director. Each business shall,
on or 22 before the date provided for payment
of tax under this subsection, 23 make

a full, true, and correct return sho1ting al1 such gross revenue 24 received, accrued,
or earned, and the amounts deducted and set aside 25 on account thereqf during the preceding quarter, **~jhich** return shall Page 34

# PUBLJ.C lJ.>,W 

# l\'0. 3-11 

# H.B. No. 

# 144, H.D.1, S.D.2 

# 1 be filed with the Director and shall include such other infonnation 

# 2 as shall be required
or prescribed

by the Director.
The Director, 

# 3 for good cause, may extend the time for making payments and returns, 

# 4 but not beyond the last day of the first month succeeding
the regular 

# 5 due date thereof. 

# 6

{b) 

# Every business shall be liable for the payment
of the i 

# tax required

to be deducted and paid by it to the C01rmonwea1th. 8



# (c) Fa11ure
to comply with the provisions

of this Section 9 

# shall be punishable under the penalties prescribed

by this Chapter. 

# 10

(d} If any business earns or derives its gross revenue 

# 11 from business act1vities

or undertakings both within and **~tithout** 

# the 12 common1•ealth during the taxable year, then the whole of its gross 

# 13 revenue shall be presumed

to have been derived from sources **1~ithin** 

# 14 the **Commom~ealth;** 

# PROVIDED, however, that the business may file for 15 

# an apportionment

of the tax

on a form prescribed

by the Director and 16 the tax shall be levied only on that portion v1hich is earned in, or 

# 17 derived from sources
or transactions

or parts of transactions within 18 

# the Commonwealth. 

# 19 Section 

# 806. Tax fonns. The Director shall prescribe the forms 20 

# of all returns required

to be furnished under the provisions

of this 21 Act or provide for other methods
of filing returns and may provide
in 

# 22 such forms for the giving
of such information

as he may deern necessilry 23 

# or advisable.
All 

# information required

by the form of any return must 

# 24 be included

in the return
by the person, elilployer, company,

or business 

# 25 responsible
for making the return.



# tlo return shall be--complete unless rage 35PUBLIC Il\W NO. 3-11 H.B. No. 144, H.D.l, S.D.2 1 and until it is signed
by or for the employer, business
or other 2 person liable to make the return,
or by sor,1eone authorized

to do so 3 on behalf of such employer, business
or other person. Every return 4 shall be signed by
a natural person. The Of rector may require that, 5 if any person
or persons actually prepare
or sign

a return for another 5 employer, business

or other person,

a form stating such facts and 7 authorizing such person
to sign such return
be signed
by the person
so 8 preparing

or signing the return, and the employer, bLtsiness
or other 9 person
in **~those** name the return
is filed. The Director may by 10 regulations define the classes
of persons
to whom this provision shall 11 apply

.. 12 Section 807. Transaction

to be Recorded

**~** PP.nalties for Violations. 13 Every person, engaging

in any transaction subject
to a tax, fee or 14 charge imposed under this Act shall keep

a complete and accurate record 15 of each transaction
and such record shall be available for inspection, 16 examination
and audit by the Director
or his delegate

at any time for 17 at ]east three (3) years after the date of such transaction.

Any 18 person willfully failing
to keep or make available for examination such 19 records,

in addition

to the sanctions provided

in this Chapter, shall be 20 subject
to revocation

of any relevant existing license
to do business 21 l'iithin the Commonwealth. 22 Section BOll. Assessment

by Director, Upon **t~e** failure
of any 23 person, business,

or employer

to make and file

a return required

by 24 this Act within the time and in the manner and fonn ppescribed,

or upon 25 failure
to pay any amount due, the Director may notify such person, Page 35

## PUBLIC lM'I NO. 3-11 

# H.B. No. 11\4, H.D.l. 5.0.2 

# 1 business
or employer

of such failure and demand that

a return
be 

# made 2 

# and filed and the tax paid as required

by this Act. If 

# such person, 

# 3 business

or employer upon notice and demand
by the Director, fai1s or 

# 4 refuses within thirty days after receipt
of the notice and demand
to 5 

# make and file

a return and pay the tax required

by this Act, the 6 

# Director may make

a return for such person, business

or employer from 

# 7 any information
and records obtainable,
and may levy and assess the 8 

# appropriate amount of tax. Such assessment shall be 

# presumed

to be 

# 9 correct unless and until it is proved incorrect

by the person, business 

# 10 or employer disputing the amount of the assessment. 

# 11 Section 

# 809. Refunds. 12

{a) If 

# it shall
be shown, upon application

of an employee, 13 that there has been withheld from his **~/ages** 

# or salaries any tax not 

# 14 due thereon,
or more than the amount
of tax due thereon,

or that 

# he 15 has paid from his wages and salaries any tax not due thereon
or more 16 

# than the amount of tax thereon,

or if it 

# is shown upon application

of 

# 17 the business that it has paid an amount not due as tax uflder this Act 18 

# or greater than the tax levied under this Act, then the Director shall 19 

# refund the amount found to have been overpaid
or otherwise not due and 20 shall pay such refund out of current collections

of the tax. Prior to 21 

# granting any refund, the Director shall detennine within ninety days 22 after
an application
for refund
is submitted that: 

# 23

{l) 

# the amount
so overpaid

ol' othetwise not due has 24 

# been paid 

# to the Commonwealth; 

# 25

{2) 

# the amount of refund claimed has not been used Paqe 371 2 3 4 5 6

PUBLIC LNN **~;o.** 3-ll H.B. No. 144, H.D.l, S.D.2 as a credit
or deduction against any tax or taxes due aod payable
to the Commonwealth from such employee;
and (3) application
for such refund \'IdS filed wfthin one year after the end of the calendar year io l'lhich the amount
to be refunded was withheld

or paid. (b) The Director may withhold any refund owing to

' 7 taxpayer under this Act in order to secure the collection

of any tax 8 imposed
by this Act or any other monetary obligation **01~ing** to the 9 Government

of the Commonwealth

or its agencies and instrumentalities. 10 Section 810. Judicial Review. !I

(a) Jf a decision

of the Director

is adverse
to the 12 taxpayer,

in whole or in part, the taxpayer shall have the right 13 within one year from the date of such decision

to institute

an action 14 for review, irrespective

of the amount,

in the Conunonwealth Trial 15 Court. Such action shall
be commenced

by filing

a complaint setting 16 forth assignments

of all errors alleged
to have been committed

by the 17 Director

in his determination

of the assessment,
the facts relied upon 18 to sustain such assignments

of errors, and

a prayer for appropriate 19 relief. The Director
or his successor

in office shall **b~** the defendant 20 in such proceedings. 21

(b) t/hen the decision

of the Court or an appeal therefrom 22 becomes final, the Director shall, upon presentation

of a certified 23 copy of the decree, make such adjustments

as are necessary

to correct, 24 amend or abate the assessment,
and to determine whethll-l' any additional 25 amount should
be ussessed. Page 3S

## PUBLIC IAN NO. 3-11 

# H.B. No. 144, H.D.l, S.D.2 1



# {c) When the assessment

is paid,
in whole or in part, after 

# 2 the filing of the complaint,
the Court shall not thereby
be deprived 3 of jurisdiction. 4 

# Section 811. 

# Tax liens-levy

of Executive Authorized.

All taxes 5 

# imposed
or authorized under this Act shall be a lien upon any property 6 

# of the person
or business obligated

to pay said taxes and may be 

# 7 collected

by levy upon such property

in 

# the manner
to be prescribed

by 

# 8 

# the Director pursuant

to Section 818 

# of this Act. 9 

# Section 812. 

# Privileged infonr.ation. 10



## (a) Secrecy 

# Required: 

# 11

(1) All reports and returns required

by this Act 12 shall be 

# preserved for three years and thereafter until the 13 Director orders them to be destroyed. 14

(2) The Director and every employee
of thG Division 15

of Revenue and Ta:.:ation

of the Department

of Finance shall 16 

# maintain the secrecy
of all matters relating

to this Act which 17 

# come to their knowledge
and shall not communicate such matters 18



# to any person except for the purpose
of carrying into effect 19 

# this Act or any other enactment imposing taxes or duties 20 

# payable
to the Commom;ealth. 21

(h) 

# The Chief and every employee
of the Division
of 

# 22 Revenue and Taxation, while in such employment, shall not engage
in 

# 23 the business
or profession

of tax accounting

or accept employment 24 with cor.:tpensation,
from any person, firm, or corporation
for the 25 purpose, directly
or indirectly,

of preparing the tax returns 

# 26 required

by the Commonwealth. Page 39PUBLIC lAW NO. 3-11 H.B. No. 144, H.D.l, S.D.2 1 Nor shall such person accept any employment
for the purpose
of 2 advising
or preparing materials

or data, or the auditing

of books or 3 records
to be used as an effort
to defeat
or cancel any tax or part 4 thereof that has been assessed

by the Commonwealth. 5

(c) No employee
of the Division
of Revenue and Taxation 6 shall be required

to produce
in any court any matter
or thing relating 7 to the taxes imposed
by this Act coming under his notice
in the 8 perfonnance

of his duties
as an employee
of the Division

of Revenue 9 and Taxation except when it is necessary

to do so for the purpose
of 10 carrying into effect any provision

of this Act or any other enactment 11 imposing duties
or taxes payable
to the Commom1ealth. 12

{d) Statistical

or other general infonnation

as to the 13 amounts
of income or particulars
set forth or disclosed

fn reports
or 14 returns required under this Act may, upon request
of a committee 15 appointed

by the Legislature,

be furnished

to the committee. 16

(e) The Attorney General
or his delegate may inspect the 17 report or return and all relevant records
of any taxpayer wno brings 18 an action
to set aside or review the tax based thereon,

or against 19 whom an action or proceeding
has been instituted

to recover any tax 20 or any penalty imposed
by this Act. 21

(f) Nothing herein shall prohibit the Director

or his 22 delegate from compiling
and publishing statistics

or information 23 generally

on the returns filed so long as there is no reference

to
a 24 particular return and the statistics
and the infonnation

do not in 25 effect divulge the contents
of any one return. The Director shall Page 110PUBLICIl\WNO.3-11H.B.No.144,H.D.l,S.D.21annuallydisclosetothepublicthenumbersofallpersonswhopay2taxesattheratessetforthinSections20l(f),(g},and(h},301,3302,303,and304,502,andotherSectionsastheDirectormayby4regulationprescribe.5(g)AnyviolationofthisSectionshallbeamisdemeanor6andshallbepunishablebyafineofnotmorethan$500orimprisonment7farnotmorethansixmonths,orboth.8Section813.CivilActionofEnforcement.Anytaxesimposedor9authorizedunderthisActmayalsobecollectedbyacivilsuitbrought10bytheAttorneyGeneraleitherinthenameoftheCommonwealthorin11thenameoftheDirector.Insuchcivilsuitawrittenstatementbythe12Directororhisdelegateastotheamountoftaxdue,thefactthatit13isunpaid,andwhoisauthorizedtocollectit,shallbesufficient14evidenceofthesemattersunlessitisexpresslyshowntothecontrary,15Section814.PenaltiesforViolations.lfi(a)Willfulfailuretocollectorpayovertax.Any17person,requiredunderthisActtocollect,accountfor,andpayover18anytaximposedbythisAct,whowillfullyfailstocollector19truthfullyaccountforandpayoversuchtaxshall,inadditionto20otherpenaltiesprovidedbylaw,beguiltyofafelonyand,upon21convictionthereof,shallbefinednotmorethanTenThousandDollars22($10,000.00),orimprisonednotmorethantwo(2)years,orboth,23togetherwiththecostofprosecution.Evidenceofpersonaluseof24anysuchtaxsocollectedbythepersonchargedwithcoJlection,25eitherinhisbusinessorotherwise,shallconstituteprimafaciePage41PUBLIC IJ.:\'1 NO. 3-11 H.B. No. 144, H.D.l, S.D.2 1 evidence for willful failure
to truthfully account for and pay over 2 such tax in violation

of this !,ct. 3

(b) AnY person who shall willfully fail or refuse
to make 4 or retain any record or return required

by this Act or shall make any 5 false or fraudulent return with intent to evade any tax, or shall 6 refuse to pennit the Director
to examine any books, paper, record or 7 memorandum bearing, directly

or indirectly,

on the transactions subject 8 to tax hereunder, shall be guilty of a misdemeanor punishable

by a fine 9 of not more than One Thousand Dollars ($1,000)
or imprisonment
for not 10 more than one (1) year, or both. 11

(c) In addition

to the foregoing penalties,
any person 11ho 12 knowingly shall swear to or verify under oath any false or fraudulent 13 statement with intent
to evade any tax imposed
by this Chapter, shall 14 be guilty
of perjury and, on conviction thereof, shall be guilty of a 15 felony, punishable

by a fine of not more than Ten Thousand Dollars 16 ($10,000)

or imprisonment
for not more than two (2) year<>, or both. 17 Section 815. Monthly Penalty Upon Taxes.

In case of failure
to 18 pay any tax levied or imposed under this Act when due, there shall be 19 added to the amount due, ten percent {10%) of the amount of such tax if 20 the period
of nonpayment

is not more than one month, with an additional 21 ten percent {10%) for each additional month or fraction thereof during 22 which nonpayment continues,
not exceeding one hundred percent {100%)
in 23 the aggregate. 24 Section 816. Failure
to File Return
on Time. Except
as may be 25 permitted

by the Director

if any employer

or taxpayer fails to make and Page 42PUBLICNO.3-11H.B.No.144,H.D.1,5.0.21fileareturnrequiredunderthisActonorbeforethedateset,unless2priortothatdatesuchtaxpayerappliedforandreceivedanextension3forreasonablecause,onepercent(1%)ofthetaxshallbeaddedfor4eachthirty(30)daysorfractionthereofelapsingbetweentheduedate5ofthereturnandthedateonwhichitisactuallyfiled;PROVIDED,6however,thattheminimumpenaltyunderthisSectionshallbefive7dollars.8Section817.Interest.Inadditiontothepenaltyimposedby9Section815ofthisAct.interestoffifteenpercent(15%)perannum10shallbeimposedonallunpaidtaxes,penalties,feesandcharges11imposedbythisAct,12Section818.RulesandRegulations,TheDirectorupol'lapproval13oftheGovernorsha11havebroadauthoritytoprescribeallnecessary14rulesandregulationsnotinconflictthisActfortheassessment15andcollectionoftaxes,penalties,feesandchargesandfortheproper16administrationofthisAct.17Section819.Severability.IfanyprovisionofthisActorany18rule,regulation,ororderhereunder,ortheapplication19ofanysuchprovision,rule,regulationorordertoanypersonor20circumstancesshallbeheldinvalid,byacourtofcompetent21'jurisdiction,therer.1ainderofthisActoranyrules,regu·lations22ororderpromulgatedpursuanttheretoortheapplicationofsuch23provisions,regulations,rulesororderstopersonsorcircumstances24otherthanthosetoitisheldinvalid,shallnotbeaffected25thereby.Page43PUBLIC LAW NO. 3-ll H.B, No. 144, H.D.l, S.D.2 1 Section 820. Effecti11e Date. This Act shall take effect
on 2 3 4 5 6 June shall

1 • 1982; (a) (b) (o) remain PROVIDED, Section 303 shall be effecti11e

on October

1, 1982; Section 501 shall be effecti11e

on July 1,19B2;and The ten percent (10%} occupancy tax of Sectfon 502(a) at seven percent (7%) until October

1, 1982. 7 Section 821. Termination Date. Chapters Two and Three of this 8 Act shall terminate upon **~idnight,** December 31, 1982; PROVIDED, that 9 the Commonwealth

has adopted

a local income tax and sales tax system 10 for individuals
and businesses

by that date. ATIEST: **/A.~**

I I It \\""lV
'h_ }:),_,=- Bemgno

R. Fitia Speaker
of the House Herbert

S. Del Rosario Chief
C1 erk **~- ;=,:qL~6/:~:**  **~4~~~~-** 'fJ;If!... Pedro P:ienor1o Go11ernor **Commom~ealth**

of the Northern **~lariana** Islands Page 44PUBLIC **U\l~** NO. 3-lJ. H.B. No. 144, H.D.!, 5.0.2 1 Northern 1•1ariana Islands, including the government thereof, which 2 lies rlithin the area north of 14 degrees north latitude, south of 3 21 degrees north latitude, 1·1est of 150 degtees east long'itude and 4 cast of 144 degrees east longitude,

as extended

by the Narine 5 Sovereignty
Act of 1980, Ptlblic Law 2-7. 6

(e) "Covenant" means the Covenant

to Establish

a 7 Commomtealth

of the Northct·n t•1ariana Islands

in Political Union a with the United States of Ametica. 9

(f) "Director" means tl1e Director
of Finance
of the 10 tlorthern 1·1arianas Commom•ealth Government. 11

(g) "Employee" means any individual

i11 the service
of 12 one or more employers for compe,lsation. 13

(h) "Employer" means any person 1'1ho pays wages and 14 salaries

to another
or to himself. Employer incl11dcs any 15 individual, corporation, association, joint stock company, bank, 16 insurance company, credit union, cooperative,

or othe1· equity or 17 group er:Jploying any person, and also includes the Director,

or 18 any other officer
or agent of the Commomtealth, charged with the 19 disbursement

of public monies
as salaries
or wages to employees 20 of the Commonwealth Government,
and any department, agency, and 21 instrumentality thereof,

as the case may be insofar

as such 22 disbursements

are concerned. "Employer" also ·includes the 23 Government

of the Trust Territory

of the Pacific Islands, the 24 United States Government
and its instrumentalities,

and the 25 governments

of foreign nations and their instrumentalities.PUBLICUMNO.3-llH.B.No.144,H.D.l,5.0.21(k)AllMunicipalOrdinances,CodeProvisions,or2DistrictPublicLa1·1Simuosinggeneralbusinesslicense3feeswhicharenotspecificallylistedinthissectionarerepealed.4Section104.Definitions.InthisAct,unlessotherwise5specificallyexpressl'!d:6(a)"Amusementmachines"meananymechanical,electrical7orotherdevice,contrivanceor1:1achineuponinsertionofa8coin,tokGnorsimilarobjectther;oin,oruponpaymentofany9consideration11hatsoever,isavailabletoplayoroperate,the10playoroperationofwhich,whetherbyreasonoftheskillofthe11operatororapplicationoftheelementofchance,orboth,may12deliverorentitlethepersonplayingoroperatingthe!'lachineto13receivecash,premiums,merchandise,tokens,extraganesoruse,14oranythingofvalue1vhatsoever,1·1hetherthepayoffismde15automaticallyfrflnthemachineorinanyothermannervrhatsoever.1.6(b)"Basicset'vicecharge"meansthecosts,including17personnelcompensationand<::apitalassociatedwiththe18purchaseoffuel,operation,installation,anddeliveryof19electricityorwatertoaperson.20(c)"Business"includesallactivities1·1hetherpersonal,21pi'Ofess·ionalorincorporated,carriedonwithintheComr,lOnwealth22foreitherdirectOl'indirecteconomicbenefit,asdeterminedby23theDirector;PROVIDED,however,one:1'/hoqualifiesasanemployee24underthissectionshallnotbeconsideredabusiness.25(d)"CDim:lQm-realth''meanstheCommoml'ealthofthePage3PUBLIC Ll'lW 00. 3-11 H.B. No. 144, H.D.1, S.D.2 1

(c) to provide necessary revenue

to provide adequate 2 funding for the ever-increasing needs for government services, 3 programs and operations. 4 Section 103. Repealer: 5

(a) Sections

1 through 202 of Title 33 and all of Title 6 77 of the Trust Territory Code are repealed

in their entirety, 7

(b) Public law 1-21 is repealed

in its entirety. 8 9

(c) Public Law 1-30 is repealed

in its entirety. (d) !4arianas District Law P.l. 5-51 is repealed

in 10 its entirety. 11

(e) Marianas District Laws P.L. 4-72 (Act No. 128-1974) 12 and P.l. 4-206 are repealed

in tlleir entirety. 13

(f) Section

8 of Marianas District Law P.l. 4-145 is 14 repealed

in its entirety. !5

(g) Title

5 in its entirety and Title
6, Chapter

1 16 Section 1(1), Chapter

2 Section 13(2), Chapter

6, and Chapter

8 17 of the Saipan **~1unicipal** Code are repealed. 18

(h) Saipan Municipal Ot'dinance Nos. 25-5-1974, 19 25-28-1974, 25-33-1974. 25-3-1975
and 25-10-1976
are repealed 20 in their entirety. 21

(i) Tinian rotunicipal Ordinance Nos. 6, 7, 4-67,
as 22 a1nended are repealed. 23

(j) Chapters 3.20, 5,10, 5.12, 5.20, 6.10, 6.11 in 24 their entirety and Section 11.20,03

of Chapter 11.20 or the Rota 25 **Mt~nicipal** Code are repealed. Page

2THIIW NOHTII[Ril 1·1ARIANI\S COIIIION\iEI\L

Tfl LEGISLATURE FIRST SPECIAL SESSIOI1, 1982

AN ACT PUBLIC Ll\W NO. 3-ll HOUSE BILL 

### rm. 144, H,D.l, S.D.2 To establish

a **geru~ral** system of revenue and taxation for the Government of the Nort:1ern Hariane Islands;

to repeal Secti-ons

1 thl'ough 202 of Title 33 and all of Title 77 ot the Trust Territory Code, Public **La\~** 1-21, Public La1·1 1-30, 11:1riM1as District **La\~** P.L. 5-51, **Ne~1'ianas** Oistr·ict **Lm~** P.L. 4-72 (Act No. 128-1974), Section

8 of l•larianas District Law P.l.. 4-145, flarianas Distr-ict La\·/ P.L. 4-206, Title

5 in its entirety and Section 1(1) of C!1aptel' 1 of Title
6., Section



### 1.3 (2) of Chapter

2 of Title
6, Chapter

6 and Chapter 3 of Title

6 of the Saipan l>lunidpa'l Code, Saipan **l·~unicipa1** 0\'dinance
rlo. 25-6-1974, Saipan lf.UIIicip<ll Ordinnnce
No. 25-28-1974, S;lipan ll,unici;,al Ordinance
ilD. 25-33-1974, Saipan 1'·iunicipal Ordinance
No. 25-3-1975, Saipan lt,unicipal Ordinance
llo. 2'5-10-1976, Tinian llunicipal Ordinance Nos. 6, 7, 4-57, as amended, ilnd Chapters 3.20, 5.10, 5.12, 5.20, 6.10, 6.11 and Sectir.n 11.20.03

of Chapter 11.20 of the Rota 1-!unicipal Code; to repeal all other i·I•.Jnicipal Ordinance

or Code Provisions

or Harianas District Public **La~IS** impo5ing general business license fees;,to amend paragri!ph

1 of Section 5 of Title **33:~** Section

3 of Title 37, Section 580 of Title 53, and S.;•ctions 54, 151 and 155(4) of T1t.le 83 of the Trust Territory Code; to **?JW~nd** Section 5 of Titlr>
19 of the Trust Territory Code; and for other **p~H-poses.** BE IT **EI~ACTED**
BY THE tlORTHERrl NARII\tiAS CONHONHEALTH LEGISLATURE: 1 .!:hapter

I. Short Title, Purpose, Repeuler, Definitions
and 2 Governr.1ent Exemption. 3 Section 101. Short Title. This Act sha11 be **kno1~11** and may te 4 cited as the "Revenue and Taxation Act of 1982". 5 Section 102. Purpose.

It is the purpose
of this Act: 6

(a) to cor.1pile, revise, amend, or repeal all general 7 revenue and taxation laws in effect
in the **Commom~eal**

th of the 8 Northern Nariana Islands; 9

(b) **pur~uant**

to the authority

of the Governrrmnt

of the 10 northern **f~arianil** Islands

as recognized

by Sections 103, 203(c), 601. 11 602, 603, 604 and 605 of the Covenant

To Establish

A **Commom~ealth**

of 12 tlw tlorthe1·n 1-lariana Islands

In Political Union With the United 13 States of America,

to establish

a general system of revenue and 14 taxation; andPllCI\.TC 111\1 NO. 11.1' •• :.o. **_L!.'i_~~',!_,_IJ.,.J_. s.n.~,;__**  THIP.D NORTIILRN tMHfANAS **Cl.l~l,'·tONI-!t::ALHI** LE.G!SLATUIIE Fli\Sl SPC:CIAL SFSS!Ot-1, lqsz AH ACT To establish

a general systc.11 of revenue and taxation for the Government of the ilortlwrn l•lariarw lslands;(Eo repei'l Sections

1 through 202 of Title 3j **ar~d** all of Title 77 of the Trust Territory Code, Public Law 1-21, Public **La\~** 1-30, Hi!rianas District L;j1·1 P.L. 5-51, Marianas District **La\~** ?.L. 4-72 {Act Uo. l2il-1974). Section

8 of ltlric:n<:s District La1·1 P.L. 4-145, f•iarianas Distr·ict 1..1,; 1-'.L. 4-ZOG, Tit'ic

5 in 'Its entirety and SE:cti.on 1(1} of Chapter 1 of Title
6, Section

13 (2) of Chapter

2 of Title
6, Chapter

6 and Chapter S of Title

6 of the Saipan riunicipal Code, SJ.ipan **~~Jnicipal** Ordinance
No. 25-6-1974, Saipan il,Jnicipal O•·Jinance
No. 25-28-1974, Saipan t1unicipa1 Ordinance
No. 25-33-1974, Saipan **~iunicipal** Ordinance
i1o. 25-3-1975, Saipan **t1unicip~l** Ordinaflce
t!o. 25-10-1976, Tinian fA:;nicipal Ordinance Nos. 6, 7, 4-67, a;; amenJed, **~nd** Ch,1pters 3.20, 5.10, 5.12, 5.20, 6.10, 6.11 and Section 11.20.03
of Ch-1pter 11.20 of the Rota /·1Lmicipal Code; to repeal all other i·1unicipal Ordinance

or Code Provisions

or narianus District Public l.aws i:'lposing general business license fees; [fiJ amend parag1·aph

1 of Section

6 of Title 33';7Section

3 o Title 37, Section 580 of Title 63, and Sections 5<1, 151 an<f-!155(4)

of Title 83 of the Trust Territory Code; to amend Section

5 of Title
19 of the Trust Territory Code; auo for other purposes. Offered
by Representative **-~"~'"""i"""'-''"·-'-F~it,_,,·,,1** ______________

_ Date: **~lay** 5, 1982 House Action Referred to: Committee

on Appropriations. **St~nding Conu~ittee**  11eport No. 3-38 Fi>'St Reading: **Fin~l** Reading: S:.>nilti! Action Fi1 ·;l **:~eadir~q:**

**r~ay** 5, 1982 f·1ay 6, 19.S2 **Com~1it.tec**

**or~ ~iscc1l**  Affairs **;r:;~·:.~:):** --;:;:-·i\d·--i:-;J·:.;;:·c;;-------- r:hi ··'

r 1 ··•·1. ",,I

';.-PUBLIC U.J.1 NO. 3-11 

### H.B. :-io. 1-1-1. 

### 1!.0.1. S.D.2 1 

### Northern t·tariana 

### Islands. including
the 

### government thereof, which 

### 2 lies Within the area n0rth of 14 

### degrees north 

### latitude. south 

### of 3 21 

### degrees north 'latitude, west of 150 

### degrees cast longitude
and 

### 4 east of 

### 1-1-4 degrees east longitude,

as extended

**~·** 

### the 

### Harine 5 

### Sovereignty
Act of 1980. 

### Public Law 2-7. 6



### I')

"Covenant" means tl1e Covenant

to Establish

a 

### 7 Commonwealth

of the Northern **1·\.;~ricr.a** 

### Islands



### in Political 

### Union 8 with the United States of America. 9

(f) 

### "Director" means the 

### Director

of Finance
of the Ill 

### Northern Marianas Commonwealtl1 Government. 

### ll

(g) 

### "Employee" means any individual

in the serv1ce
of 12 

### one or more employers for compensation. 

### {h) ''Employer" means any person \\lLl pays wages 

### and 14 salaries

to another


### or to himself. Employer includes 

### any 15 

### individual. corporation, association, joint stock company, 

### bank. 16 

### insurance company. credit union, cooperaliYe,

or 

### other equity or 

### 17 group 

### employing any person. and also mcludes the Director.

or 18 

### any other officer
or agent of the Commonwealth, charged with the 19 

### disbursement



### of public ·monies


### as salaries


### or wages 

### to employees 20 

### of the Commonwealth Government
and any department. agency. 3nd 21 **instru~entality** 

### thereof.

as

I he case may 

### te insofar
'as 

### such 

### 22 disbursements

are concerned. **"~mployer"** 

### also includes the 

### 23 

### 24 Government

of the 

### Trust Territory

of 

### the Pacific Islands, 

### the United States GoYcmment
and its instrumentalities,

and the 

### governments

of foreign nntions and 

### their instnnnentalities Page

4PLBLIC :_.r.:·: :n 3-11 H.B. flo. 144, H.D.l, 8.0.2 1

(k) l1ll Municipal Ordinances, Code ProYisions,

or 2 Marianas District ?.Jblic Ll\\S imposing general business license 3 fees which are not specifically listed
in this section are repealed. 4 Section 104. Definitions.

In this Act, unless otherwise 5 specifically expressed: 6

(a) "Amusement machines" nleJli any mechanicaL electrical 7 or other device. contrinmcc

or maclJine which, upon insertion

of a 8 coin, token or similar object therein,

or upon payment
of uny 9 consideration whatsoeYer.

is a\"ailable

to play or operate. the 10 play nr operation

of which, whether

ty reason of the skill of the 11 operator
or application

of the element
of chance,
or both, nay 12 deli\·er
or entitle the person playing
or operating
the machine

to 13 recerYe cash. premiums, merchandise. tokens, extra games or use, 14 or anything
of value whatsoe\'er. wnether the payoff
is made 15 automatically froo the machine
or in any other mam1cr whatsoever. (b
l "Basic service charge'' mcuns the costs, including 17 personnel compensation

and capital costs. associated with the 18 purchase

of fuel, operation, insta!latinn,

and delivery

of 19 clcctricit:;.:

or water to a person_ 20

(c) "Business" includes
al! acti\'itics whether personal, 21 professional

or incorpcrated, carried

on within the Comonwea!th 22 for either direct or indirect economic benefit,

us determined

**~-** 23 the Director; PROVIDED. hmvevcr, one 11!-.o qualifies

as an employee 24 under this section shall not l:c considered

a business. (J; "Commonwealth'' means the Commonwcaltl1

of tl1e Page

3HJBLIClAWNO.3-11ILB_No.144,H.D.l,S.D.21(c)toprovidenecessaryrevenuetoprovideadequate2fundingfortheever-mcreasingneedsforgovernmentserv1ces,3programsandoperations4Section103Rcpealer-(o)SectwnsIthrough202ofT1tle77oftheTrustTerritoryCtxlcarerepealed'"(b)PublicLa111-21"repealed'"'I'IPubl1cLm11-30"repealed'"56789(d)MananasDistrictLm1pL.5-5110itsentirety.33andallofT1tletheirentirety.itsentiretyitsentirety,,repealed'"11(e)MarianasDJstnctlm-\SP.L.4-72(Actl\o.128-1974)12andP_L.4-206arerepealed1nthenentHety13(f)SectiOn8ofMananasDistrictLThvP.L4-145is14repealed1nitsentirety.15(g)Title5111itsentiretyandTitle6.Chapter116SectiOn1(1),Chapter2Section13(2).Chapter6.andChapter817oftheSaipanJ\-luniCJpalCodearerepealed_18(hJSaipanMunicipalOrdinanceNos.25-6-1974,1925-28-1974,25-33-1974,25-3-1975and25-10-1976arerepealed10tnthelfentirety21(i)TinianlvlunicipalOrdinanceNos.6.7.4-67,as22amendedarerepealed_23(j)Chapters3_20,5.10.512,520,610,6_11in24theirentiretyandSection1!_20.03ofChapter11.20oftheRota25Mun1c1palCodearerepealedPage2PUBLIC L"'V.'I lJO. 3-11 THIRD ;.\QRTHER\ lv!A.RlAXAS CQ\ili\0\'\\'EALTI-l LEGISLATURE FIRST SPECIAL **SESSJO~.** 1982

I'N ACT
HO...BE H.D.I. BILL \0. S.D.2

I H. To establ1sh

a general system of revenue and taxation for the Gorernment of the Northen1 J·:ariana Islands;

to repeal Sections

I through 202 of Title 33 and all of Title
77 of the Trust Territorv Code, Publlc L1\\ 1-21. Public Lmv l-30. Marianas District Law P.L 5-51. 1\!ananas District Lm\· P.L 4-72 (Act llo. 126-1974). Section

8 of i·larianas District Law P.L. 4-145, l!arianas District Law P.L. 4-206, Title

5 111 its **entiret~·** and Section 1(1) of Chapter I of T1tle

6. Sect1on

13 (2) of Chapter

2 of Title
6, Chapter

6 and Chapter 8 of Title

6 of the Saipan Nunicipal Code, Saipan **l·~;micipal** Ordmance
No. 25-6-1974

.. Sa1pan Municipal Ord1nance

No. 25-28-!974. Saipan **llunicip~l** Ordinance
flo. 25-33-1974. Saipan Municipal Ordinance

No. 25-3-1975, Saipan **~·lunicipnl** Ordwnnce

No. 25-10-!976. Tinian t'.unicipal Ordinance Nos.
6. 7. 4-67, as amended, and Chapters

3 20.

5 10,

5 12. 5.20. 6.10, 6.11 and Section !1.20.03
of Chapter 11.20 of the Rota 1·1unicipa1 Code; to repeal all other Munic1pal Ordinance

or Code Pro1isions

or i-larianas District Public La11S 11nposing general business license fees: to amend paragraph

I of Section 6 of Title 33, Section

3 of Title 37. Section 580 of Title 63. and Sections 54, 151 and 155(4)
of Title 83 of the Trust Terntory Code; to amend Section 5 of Title
19 of the Trust Territory Code: and for other purposes BE IT E'.\ACTED

BY THE **XORTIIER~** Jvl.l,RIANA.S CO!·lMON\IEALTH LEGISLATURE: 1 Chapter

l. Short Title. Purpose. Repealer, Definitions
and 2 Go\ernmenl E.\emption. 3 Section
101 Short Title. This Act shall be known and rmy be 4 cited as the "Revenue and Taxation Act of 1982" 5 Section 102. Purpose

J t is the purpose

of this Act 6

(a) to compile, revise, amend,
or repeal all general 7 revenue and taxation laws !n effect
in the Comon\\'ealth

of the 8 Northern !·lariana Islands: 9

(b) pursuant

to the authority

of the Go1ernment

of the 10 liorthern **l~ariana** Islands
as recognized

by Sections 103. 203(c), 601, 11 602, 603. 604 and 605 of the CoYenant

To Estnblish

A Comonwealth

of 12 the !!orthern 1·\ariana Islands

In Political Union 1\ith the United 13 States of 1\"T.erica,

to establtsh

a general system of revenue and 14 taxation,
and**I'\.'~::....:c** 1.-,·,; t;u. 3-ll H.ll. t:Q • 

## .....Jii• H.fl.l, S.O.?. THIRD i\ORTHER\J **~l.~RI:\:\AS** CD!{H0:MEI1LTH 

### LEGlSU\Tl!RE FIRST SPECIAL SESSIO>J. 1982 AN ACT 

### To establish

a general system
of revenue and taxation for the **Govcrm~ent** of the **r;~rthern** rtarian.a Islands;

to repeal Sections

1 through l:G2 of Title 33 and a71 of Title
77 of the Trust Territory Code, Public La\·; I-2L Public 

### La11 t-30, **l·~arianas** District L'l.v 

### P.L 5-51, 11ananas District **L~l'l** 

### F.L. 4-72 (Act tJo. 128-1974), Section

3 of Marianas District L:m P.L 4-1·15, **r~arian~s Olstr~ct**  

### I.n.v P.L. 4-205, T1tle

5 1n its entirety and Section l(l) 

### of Chapter l of Title

6. Section

13 (2) of Chapter

2 of Title 6, Chapter

G ur.d Chapter 

### 8 of Title

6 of the Saipan i·iunicipal Code, **S;dp~n** Mumc1pal Ordinance


### l:o. 25-6-1974, Saipan l·iunicipal Onlii1ance
**l~o.** 25-28-1974. Saipan **t:~nicip31** Ordinance
No. 25-31-1974, Saipan 11unicipal Ordinance
llo. 25-3-1975,



### Sa pan l·:unicipal Ordinance
No. 25-10-1976. Tinian 11unicipal Ordinance t:os.
6, 7, 4-67,
as amended, and Chapters 3.20. 5.10, 5.12,

5 20, E.10, 6.11 Jnd Section 11.20.03
of Chapter 11.20 of the Rota tlounicipal Code;
to repea all other l·:unicioc.l Ordinance

or Code Provisions

or 1•\arianas District Public Lcv1s imposing general b_usiness license fees;
to amend paragraph

1 

### of Section

6 of Title 33. Sect10n

3 

### o Title 37, SectiOn 580 of Title 63, and Sections 54, 151 and 155(4) of Title 83 of the Trust Territory Code; to **a::~end** Section

5 of T1tle
19 of the Trust Territory Code; and for other purposes. Offered

b:- Representative
__ Bill'"·'CiL!illOQO_RLoFoi•tlicll- _____________

_ Date. **~1ay** 5, !982 House Action Referred
to: Cmumittee



### on Appropriations Standing Co':1:.1ittee Report !lo. 3-38 F nst Reading.

t•:ay 5, 1932 r ina
1 Readmg.

:·\ay 6, 19ll2 Senat'· Actirn Referred
to: Co;:1r.tittee

on Fiscal Affairs Cenference Co;·::'littec f:0port !1o. 3-14 First ReM!ing:



### t·:ay 6, 1982The Honorable Benigno

R. Fi tial The Honorable Olyrr.pio

T. Borja l?age !'"our i&) The Administrar.ion

has been advised
by the Social Security Administration
tha;: Public Law 3-11 would impose

a ta}: on social security payments. This would impose an ad::Jitional burden on persons ·who are truly ne>:!dy and we havF> been advised that neither the Federal Government
nor state governmenr.s tax these ber.efits. We **wi~h** to emphasize that we favor enactment

of legislation

to increase government revenues because
o:[ ar,ticipateC shortfalls

l.n revenue and because our Administration

has inherited serious deficits fro:n the previous Administration.

We further feel that our citizens should tegin to bear the burden of running our government

as pa!:t of our role to gradually develop fiscal **inde~endence,** self-relianc8,

and self-government. However painful and controversial taxation **ma~** be, we are asking our people to understand
our action and to sacrifice with us. We therefore owe it to our c1ti::ens

to revise our tax laws to reflect their serious concerns.

In this connection,

1,·e would, therefore, urgently request that representatives

of the Administration and the Legislature meet at the earliest possible date to consider the series of amendrr.ents

to Public Ldll' 3-11 as enumerated above. Sincerely, **~--=--** I'EDRO
.'\.. ':'E:NOElO Acting Governor EnclosureTheHonorableR.Fitial'fheHonorableOlympia'r.Borja?a9eThree'regulatedunderfederallaw.SaipanCableTV,fore:-:arr.ple,providescomrr.entaryontheactivitiesoftheandthatcompany'sasapublicutilitymayviolate,thatfreedomofspeech.Wetopreventunnecessarycourtactionagainstthegovern:nentduetotheambiguityofthelaw.(5)Theisextrerr.elyconcernedregardingSections401and402ofPublicLaw3-ll.TheseSections,asweu11-derstandit,imposeane;-:cisetCIXongoodsimporccedintotheforpersonaluseandconsumption.feelthatthisisanunfairirr.posiciononthetravellingpublicwho,soo:ten,travelabroadtopurchaseCorpersonaluseitemsthatarebetterpricedandalsoitem:;;thotcannotbefoundintheCc[!IITlonwealth.Inaddition,theseta;{eswillbedifficulttoasseslJandcollectandwill\.:ndoubtedlydelayandinterferewiththeprocessingofvisitorsandreturningresidentsintotheCommonwealth.Fore:-:ample,noexerr.ptionismadefo;:;thecasualuseofgoodsimportedintothe\•JewouldthataOneHundredDollars($100.001exemptionbegiventoreturn1ngresidentsandfullexemptionbegiventotransientvisitorsandtoul"ists.(6)TheAdministrationisdoingeverythingwithinitspowertoimprovethedeliveryofpotablewaterin1:heCommonwealth.ThebasicservicechargeimposedbySection604.ofPublicLaw3-11should;.ot:beimposedurrtilsuchtimeastheresidents•)ftheCommonwealthreceivethebenefitsofareliable-...'atersennce.Hopefully,wewillaccorr.plishthissoon.Werecommendthattheeffectivedateforanyimplementedafternecessaryimprovement'-Sachieved.(7)Theh6.T.thattheexcisetaximposedoncertaincosmeticsan2toiletriesb<=reducedtofivepercentadinsteadofthefifteenperccentodvaloremsetforthinSection402je)ofPublicLaw3-11.lnthisdayandage,certaincosmeticsandtoiletriescannotbeconsideredluxuriesandare,infact,necessitiesoflife.C..nSection(a)wereconunenclthatfruitjuic0sbee:{emptedfromthecontainertaxassuchitemsarenecessaryforthehealthandwell-beingofourcitizens.The Ho n orable Benig

n o R . Fiti

a l T h e H on orab le Olympic
T. Bor ja Pa g e Two **~:**

. . **::.~· ::2**  bus iness pe rmi

t pursu

a nt to th e Fore

i gn Investo

r s Business Permit Act

, deposit with the Registrar of Corporations $100

, 000 cash

, negoti

a ble se cu rities

o r cor p o ra
t e su r e ty bo n ds

. T h e pur pos
e o f thi

s pro vi sion

i s to

i n su re th at th e company has sufficient funds to satisfy judgments. Legislation should be introduced **i~mediately**

to **reinst~te**

t h is provi

s ion of

l aw w h ich
p rotects po li cy holders. (2) The definition

of source income,
as set forth in S ec tion l04( u) of Pu b lic Law

3 - 11 cov
e rs thre

e categories

of incom

e , t w o of wh ic h r e l at e to wag es a n d salari es.
T h e th
i rd invo

l ves wage s r ecei
v e6 pursuant

to a contract with the CommonHea

l th Government

. The definition does not
d e al with co m pensatio

n for se r vices paid as fees

, gross i n com
e de rived from

b u s i n esse

s , gains de rived from inves

t ments, etc

. It is the und
e rstanding

of the Administration
that the current definition

is not inte

n d e d to exclude other types of income

f r om f a lli n g with in the
d ef init

i o n of

" sou rce in co me" but

l egislation
sho u ld be enacted
to
c la rify this ambiguity

. ( 3)
S ec t:io n 30 4 ( 6.) of Pu b lic La w 3 - 11 p t:" ovides

t hat of€

- s n ore
b ank ing co r p orati

o n s shal

l **e** e xe mpted f r o m
t h e ta x subjected

on ban k s , banking in
s titution

s, buildi

n g and loan associations
and ot he r fi n an ci al inst it utio

n s
. The Adm in istra

t i on is opp osed

t o this

e xe m ptio n a n d supp ort s t h e v ie w th a t off-s

h o re banking corpo ra tions

s ho uld pay

a fair tax and should not be given preferential t r eatment

. O n e of the reaso ns for

l i ce nsing off-sh ore
:C a:IJ. :::.ng

c orp oration s w as

t o b roacien
th e C omm onwealth

' s tax
b ase . T he
a b ove ci
t e o provi

s ion cl e arly con

t ravenes

t hat obj
e ctive. (4) Se ct ion 10 4 (r ) of Pu b l ic La w 3- 11

i n clu d es te
l e g rap h a nd televi

s i o n serv

i ces und ga rb age se rv ices
w it hi n the defition
of
a public
ut
i lity

. Tel
e graph

, television
and garbage services are p=ovide6

t o the r e sidents
of the Commonwea

lt h by pr

i v at e cor por
a t ions

. I n ad ditio

n , certai

n ac
t i vi
t ie s of th e
t w o medi

a are0 /) ifommonl:llealtb

of tbc .flortbern :ffi.ariana 3fslanbs ®!tier of the @obernor

FOR OFFKI.\1

t **~E** <".>.HI EADilHESS Grl\- NMI S.\!1',\

'< RU'L\ 10: 0

DLn
or .\CTI\Tl'\ 0

"lAY
2 7 iQSt Ths Honorable Benigno

R. Fitial Speaker, House of Representatives Third northern Harianas Co:m.onwealth Legislature Saipan,
CN 96950 The Honol·able Olyrr.pio

T. Borja **Pre~ident**

of the Senate Third Northern Marian"s **Com:rr.om~ealth** Le"?"islature Saipan,
**C~l** 96950 Lear **~-ir.** Speaker and Hr. President: RE: HCl'JSE BILL IJO, 144, P.Dl, S02 (RLVEtlUE AI-:D TAX

I Ol! ACT oe 1982) Gn **~:ay** 27, 1982,

I signed into law the above referenced bill, y;hicn becomes Public Law 3-11. The Ad.minHtration conunends the Legislative Branch for passing legislation which increases taxes and raises revcmu1's.

l<Je realize that nobody likes to have their taxes increased but this action
is necessary

as seen fit by the Legislature

if the government

is to continue

to provide necessary services and to begin to reduce finarrcial deficits accumulated from previous years. \'lhile this Administration dBmon,trated

its aqreement

on the substance

of the nev1 law, we would like to bring some matters
of concerrr
to your attention for possible action by the Legislati•Je Branch, hopefully as soon as possible
in order to prevent undue problems

in the administration

and enforcement

of the law. The concerns
of the r.C.:r.inistratJ.on

and the public are carefully roviev:ed. <O.!."e as follows:

These

concerns (11 Section 103 repeals tne Foreign Investors Business Fenoit Act. This ;,ct, although archaic, does provide a ccn:ain deg:::ee of protection

to local businesses. The Administration favors some type of legislation regulating foreign businesses
and the **Adminis~ration** would like to cilscuss possible means of regulating foreign investors

in
a rrs,-.n;zr which would not impede our economic: growth Ol" discourage needed foreign investment.

Tn addition, Public Law **3~11** repeals Section

1l Of Title
33 of the Trust Territory Code which .requires that insurance companies, grar,teCi

a