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 5 
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 G 
5 

(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 7 
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 8 
5 

6 

7 

8 Act. 

9 

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 9 
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 10 
5 Commorwealth Governments, their departments, agencies and 

6 instrumentalities, are hereby specifically exempted frol'l any 

7 liability to pay any tax imposed by Chapter Three of this Act, 

8 Chapter II. Hane and Salary Tax, 

9 Section 201. Wage a11d Salary Tax. (a) There is imposed an 

10 annual tax on all 11ages and salaries from sources the 

11 Co:r.rnonwealth received by an individual. The tax be detemined 

12 

13 14 

)5 

16 17 18 

19 

20 

21 

22 23 24 

io accordance the schedule: 

If the gross annual and 

salaries of an or other 

individual are: 

(o) $0 to 1,000 (b) $1,001 to 5,000 

(o) $5,001 to 7,000 

(d I $7,001 to 15,000 (e) $15,001 to 22,000 

(f) $22,001 to 30,000 

(g) $30,001 to 40,000 (hI $40,001 to 50,000 

(i) $50,001 and over 

The tax on the gross annual 

wages and salaries 

No Tax 

2% of amount over $0 

3% 

4% 

5% 

6% 

7% 

B< 

9% 
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 
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 13 
a

 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 14 
5 (1) an amount of cigarettes not to exceed 

6 thirty {30) packages of (20) cigarettes per package; 

7 (2) an amount of distilled alcoholic beverages 

8 not to exceed three-fifths (3/5) of a gallon; 

9 (3) an amount of 1vine and sake not to exceed one 

10 gallon. 

11 

12 

(c) Rates. 

(1) Cigarettes, fifteen cents ($.15) per every 

13 b1enty (20); 14 (2) Tobacco, other than cigarettes, fifty percent 15 (50%) of the invoice price of the tobacco; 16 (3} Bee1· and malt beverages, ten cents ($.10) per 

17 can or bottle of tv1elve fluid ounces or fractional .pal't thereof; 

18 (4) Distilled alcoholic beverages, one dollat· and 

19 forty cents ($1.40) per fifth (1/5) of a gallon; 

20 {5) 1-/ine and sake, three dollars ($3.00) per 

21 gallon; Provided, that this tax shall not apply to any 22 religious organization which is importing, receiving, or 

23 purchasing in the Com:nomvealth sacramental 1·1ine for use in 24 the religious rites uf such organization. The Dil'ector 

25 shall provide by regulatior1 for thl? reimbursement of 11ine 

Page 15 
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 lG 
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 the 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 by regulation the aviation fuel tax upon an airline upon finding 

12 that the airline 11ill increase its flight schedule into and within the 

13 Commonh'ealth to a level resulting in benefits to the in 

14 excess of the loss of revenue under this section. 

15 Section 404. Beveraae Container Excise Tax, 

16 (a) Non-Alcoholic Containers. 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 seller, 

20 (b) Alcoholic 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 40?. Exemption, Any product subject to tax under this 25 chapter which is not received by or is certified by the person liable 

Page 17 
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 17 
5 

6 

Section 502. Hotel 0CCUQar.cy 

(a) An occupancy tax is 

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 19 
5 

5 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

(

) 

I 4 I 

(5) 

(5) 

(7) 

(8) (9) 

(10) 

Insurance compar<ies, three hundred dollars; Insurance brokers, one hundred dollars; Insurance agents, seventy-five dollars; 

Public utilities, three hundred dollars; 

Manufacturers, fifty dollars; Hholesalers, fifty dollars; 

Roadside vendors selling local agricultural 

and fishery prnducts, five dollars; and 

(11) General business license covering all other 

businesses unless provided otherwise by this 

Act, fifty dollars. 

(e) Rene\·1'!1. A licensee may renew his license upon the 

17 expiration thereof by the paymerlt of the ar<r<ual license fee. 18 (f) Conditior<s for Revocation or Suspension. (1) The 

19 Director of Commerce and Labor may revoke or suspend any license 

20 issued under this section, upon finding after b1o 1·1eeks public notice 21 and a hearing conducted pursuant to the provisions of Sections 8, 9, 22 10, and 11 of Title 17 of the Trust Territory Code that: 

23 

24 

25 

(A) The application of the licensee contains 

false or fraudulent information: 

(B) The licensee bribed or otherwise unla11fully 

Page 20 
4 

5 

6 

7 

8 

g 

10 

11 

12 

13 

14 

15 

16 

17 

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 21 
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 22 
5 

6 

7 

8 

9 

10 

11 

(f) boys, twenty-five dollars. 

(g) all other self-propelled vehicles, fifty dollars. (h) for duplicate or substitute registration cards 

and plates: subsections (b) and (c), two dollat·s and fifty cents; subsections (d), (e), and {f) five dollars; and 

subsection (g), ten dollars." 

(b) Section 151 of Title 83 of the Trust Territory Code is 

12 hereby amended to read as 

13 

14 15 

16 17 

18 

19 

20 

21 

22 

"§151. 0p€rator's license- Fees. No person except 

those expressly exempted in the Chapter shall drive any 

motor vehicle upon a highr1ay in the Commonwealth unless 

such person has been licensed as an ope1·ator under this 

Chapter. A fee of fifteen dollars shall be paid to the 

Director of the Department of Finance for each such 

license issued. A fee of five dollars shall be paid 

to the Director of the Department of Finance for each 

duplicate or substitute license issued." 

(c) Subsection {4) of Section 155 of Title 83 of the Trust 

23 Territory Code is hereby to read as follous: 

24 25 

"(4) A ft:!e of five dollars shall ba pi!.id to the 

Director of the Department of Finance for each 

Page ?3 
4 

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 24 
5 

6 

7 

(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 25 
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 25 
5 

6 

7 

8 

0 to 800 

801 to 2,000 

2,001 to 25,000 

25.001 and over 

.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 27 
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 28 
to t

e Co

o

wea

t

s

a

ot be 

equ

ed. 

5 6 

(b) Persons filing 1vitlr the United States: 

(1) Any perSOfl required to file a return with the 

7 United States for a taxable year who claims a rebate from the 

8 Commonwealth for such year shall file with the Director, on 

9 or before the date required to file such return 1·1ith the 

10 United States, the cmnputations specified in pa1·agraph (1) 

11 of subsection (a) of this Section and a copy of the return 

12 required to be filed with the United States for the taxable 13 yea1·. 

14 (c) The Director shall cause the claim for nobate to be 

15 reviewed and audited and, if the rebate is found in order, shall 

16 cause the rebate to be paid to such person 1'1ithin one hundred ei9hty 

17 (180) days of the payment by the United States into the Treasury of 18 the of such amount of the taxes paid by such person as 

19 relates to income derived from sources within the Commonwealth, 

20 (d) The determination of or not a person must fi1e 21 under this Section 1·1ith the Commo1111ea1th or \·lith the United States 22 shall be r,lade in accordance with the provisions of this Act and the 23 rules and regulations of the United States Internal Revenue Code of 

24 1954 as amended. 

25 Section 704. Adjustmentl:.· If any change or correction is made 

Page 29 
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 30 
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 31 
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 
(

) 

y 

p

y

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 33 
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 
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 35 
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 
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 37 
5 

6 

y

y

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 
4 Section 811. Tax liens

levy o

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 39 
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 110 
g

p

5 (g) Any violation of this Section shall be a misdemeanor 

6 and shall be punishable by a fine of not more than $500 or imprisonment 

7 far not more than six months, or both. 

8 Section 813. Civil Action of Enforcement. Any taxes imposed or 

9 authorized under this Act may also be collected by a civil suit brought 

10 by the Attorney General either in the name of the Commonwealth or in 

11 the name of the Director. In such civil suit a written statement by the 

12 Director or his delegate as to the amount of tax due, the fact that it 

13 is unpaid, and who is authorized to collect it, shall be sufficient 14 evidence of these matters unless it is expressly shown to the contrary, 

15 Section 814. Penalties for Violations. 

lfi (a) Willful failure to collect or pay over tax. Any 

17 person, required under this Act to collect, account for, and pay over 18 any tax imposed by this Act, who willfully fails to collect or 19 truthfully account for and pay over such tax shall, in addition to 

20 other penalties provided by law, be guilty of a felony and, upon 

21 conviction thereof, shall be fined not more than Ten Thousand Dollars 

22 ($10,000.00), or imprisoned not more than two (2) years, or both, 

23 together with the cost of prosecution. Evidence of personal use of 

24 any such tax so collected by the person charged with coJlection, 

25 either in his business or otherwise, shall constitute prima facie 

Page 41 
y 

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 42 
5 of the return and the date on which it is actually filed; PROVIDED, 

6 however, that the minimum penalty under this Section shall be five 

7 dollars. 

8 Section 817. Interest. In addition to the penalty imposed by 

9 Section 815 of this Act. interest of fifteen percent (15%) per annum 

10 shall be imposed on all unpaid taxes, penalties, fees and charges 

11 imposed by this Act, 

12 Section 818. Rules and Regulations, The Director upol'l approval 

13 of the Governor sha11 have broad authority to prescribe all necessary 14 rules and regulations not in conflict this Act for the assessment 15 and collection of taxes, penalties, fees and charges and for the proper 16 administration of this Act. 

17 Section 819. Severability. If any provision of this Act or any 

18 rule, regulation, or order hereunder, or the application 

19 of any such provision, rule, regulation or order to any person or 

20 circumstances shall be held invalid, by a court of competent 

21 'jurisdiction, the rer.1ainder of this Act or any rules, regu·lations 22 or order promulgated pursuant thereto or the application of such 

23 provisions, regulations, rules or orders to persons or circumstances 

24 other than those to it is held invalid, shall not be affected 25 thereby. 

Page 43 
5 

6 

shall 

(o) 

remain 

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 IIt \\""lV 'h_ }:),_,=-

Bemgno R. Fitia 

Speaker of the House 

Herbert S. Del Rosario 

Chief C1 erk 

'fJ;If!... ~-Pedro ;=,:qL~6/:~: P:ienor1o ~4~~~~-

Go11ernor 

Commom~ealth of the Northern ~lariana Islands 

Page 44 
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. 
5 specifically expressl'!d: 6 (a) "Amusement machines" mean any mechanical, electrical 

7 or other device, contrivance or 1:1achine upon insertion of a 

8 coin, tokGn or similar object ther;oin, or upon payment of any 

9 consideration 11hatsoever, is available to play or operate, the 

10 play or operation of which, whether by reason of the skill of the 

11 operator or application of the element of chance, or both, may 

12 deliver or entitle the person playing or operating the !'lachine to 13 receive cash, premiums, merchandise, tokens, extra ganes or use, 

14 or anything of value 1vhatsoever, 1·1hether the payoff is mde 

15 automatically frfln the machine or in any other manner vrhatsoever. 

1.6 (b) "Basic set'vice charge" means the costs, including 

17 personnel compensation and <::apital associated with the 

18 purchase of fuel, operation, installation, and delivery of 

19 electricity or water to a person. 

20 (c) "Business" includes all activities 1·1hether personal, 21 pi'Ofess·ional or incorporated, carried on within the Comr,lOnwealth 22 for either direct Ol' indirect economic benefit, as determined by 23 the Director; PROVIDED, however, one: 1'/ho qualifies as an employee 24 under this section shall not be considered a business. 25 (d) "CDim:lQm-realth'' means the Commoml'ealth of the 

Page 3 
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 2 
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; and 
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. 

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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 4 
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 3 
4 Section 103 Rcpealer-

( o) Sectwns I through 202 of T1tle 

77ofthe Trust Territory Ctxlc are repealed '" 

(b) Public La11 1-21 " repealed '" 

'I' I Publ1c Lm1 1-30 " repealed '" 

5 

6 

7 

8 

9 (d) Mananas District Lm1 pL. 5-51 

10 its entirety. 

33 and all of T1tle 

their entirety. 

its entirety 

its entirety 

,, repealed '" 

11 (e) Marianas DJstnct lm-\S P.L. 4-72 (Act l\o. 128-1974) 

12 and P_L. 4-206 are repealed 1n then entHety 

13 (f) SectiOn 8 of Mananas District LThv P.L 4-145 is 

14 repealed 1n its entirety. 15 (g) Title 5 111 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 J\-luniCJpal Code are repealed_ 18 ( h J Saipan Municipal Ordinance Nos. 25-6-1974, 

19 25-28-1974, 25-33-1974, 25-3-1975 and 25-10-1976 are repealed 

10 tn thelf entirety 

21 (i) Tinian lvlunicipal Ordinance Nos. 6. 7. 4-67, as 22 amended are repealed_ 23 (j) Chapters 3_20, 5.10. 5 12, 5 20, 610, 6_11 in 

24 their entirety and Section 1 !_20.03 of Chapter 11.20 of the Rota 

25 Mun1c1pal Code are repealed 

Page 2 
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 
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, 1982 
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 

Enclosure 
' 

regulated under federal law. Saipan Cable TV, for 

e:-:arr.ple, provides comrr.entary on the activities of 

the and that company's as a 

public utility may violate, that freedom 

of speech. We to prevent unnecessary court action against the govern:nent due to the ambiguity of the law. 

(5) The is extrerr.ely concerned regarding 

Sections 401 and 402 of Public Law 3-ll. These Sections, as we u11-derstand it, impose an e;-:cise tCIX 

on goods imporcced into the for personal 

use and consumption. feel that this is an unfair 

irr.posicion on the travelling public who, so o:ten, 

travel abroad to purchase Cor personal use items that 

are better priced and also item:;; thot cannot 

be found in the Cc[!IITlonwealth. In addition, these 

ta;{es will be difficult to asseslJ and collect and will 

\.:ndoubtedly delay and interfere with the processing 

of visitors and returning residents into the 

Commonwealth. For e:-:ample, no exerr.ption is made fo;:; 

the casual use of goods imported into the 

\•Je would that a One Hundred Dollars ($100.001 

exemption be given to return1ng residents and full exemption be given to transient visitors and toul"ists. 

(6) The Administration is doing everything within its 

power to improve the delivery of potable water in 1:he 

Commonwealth. The basic service charge imposed by 

Section 604 .of Public Law 3-11 should ;.ot: be imposed 

urrtil such time as the residents •)f the Commonwealth 

receive the benefits of a reliable -...'ater sennce. 

Hopefully, we will accorr.plish this soon. We recommend 

that the effective date for any 

implemented after necessary improvement '-S achieved. 

(7) The h6.T . that the excise tax 

imposed on certain cosmetics an2 toiletries b<= reduced 

to five percent ad instead of the fifteen 

perccent od valorem set forth in Section 402je) of Public 

Law 3-11. ln this day and age, certain cosmetics and 

toiletries cannot be considered luxuries and are, in 

fact, necessities of life. C..n Section (a) we 

reconunencl that fruit juic0s be e:{empted from the 

container tax as such items are necessary for the health 

and well-being of our citizens. 
g

~: . . ::.~·

::2 

business permit pursuant to the Forei gn Investors Business Permit Act , deposit with the Registrar of Corporations $100, 000 cash, negotiable 

securities or corporat e sur e ty bonds . The purpose 

of this provision i s to i nsure that the company has sufficient funds to satisfy judgments. Legislation should be introduced i~mediately to 

reinst~te t his provision of l aw 

which protects 

policy holders. 

(2) The definition of source income, as set forth in 

Section l04(u) of Public Law 3- 11 cove rs three 

categories of income , t wo of which r e l ate to wages 

and salaries. 

The thi rd invol ves wages r eceive6 

pursuant to a contract with the CommonHea l th 

Government. The definition does not deal with 

co

mpensation for ser vices paid as fees, gross 

i ncome derived from busi nesses , gains derived from invest ments, etc . It is the understanding of the Administration that the current definition is 

not intended to exclude other types of income f rom 

f alling within the definiti on of "source income" 

but l egislation should be enacted to c larify this ambiguity . 

(3) Sect:ion 304(6.) of Public Law 3- 11 pt:"ovides t hat of€- s nore banking cor porations shall e exempted 

f rom t he tax subjected on ban ks , banking institutions, building and loan associations and 

other fi nancial institutions . The Administrat i on 

is opposed t o this exe

mption a nd supports t he view tha t off-shore banking corporations s hould pay a fair tax and should not be given preferential 

t r eatment. One of the reasons for l i censing off-shore :Ca:IJ.:::.ng corporations was t o broacien the 

Commonwealth 's tax base . The above cit eo provision clearly cont ravenes t hat obje ctive. 

(4) Section 104(r) of Pub l ic Law 3-11 i ncludes tel egraph 

and televisi on servi ces und garbage services 

within 

the defition of a public uti lity . Telegraph, television and garbage services are p=ovide6 t o the 

r esidents of the Commonwealth by pri vate corpora t ions. 

I n addition, certain ac t i vit ies of the t wo media are 
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