Opinion ID: 214076
Heading Depth: 3
Heading Rank: 2

Heading: Application of FICA to Hyunjin

Text: We turn finally to Hyunjin, the employer. Appellants' brief does not explain in detail why the FICA tax on employers' wages under I.R.C. § 3111 does not apply to Hyunjin, other than to allege that, because Hyunjin's employees do not owe FICA taxes on their hourly wages, neither does Hyunjin owe FICA taxes on wages paid to its employees. This argument fails because, as we explained above, the Zhang plaintiffs and similarly situated nonimmigrant alien contract workers in the CNMI owe FICA taxes under the Covenant. The parties do not dispute that, as drafted, § 606(b) imposes FICA taxes on employers in the CNMI. Op. at 287. Section 606(b) of the Covenant applies to the CNMI [t]hose laws of the United States which impose excise . . . taxes to support. . . the United States Social Security System. Covenant § 606(b). The FICA employer wage tax unquestionably fits this definition; § 3111 explicitly characterizes the FICA employer tax as an excise tax (consistent with this term's broad definition), and FICA taxes are imposed to support the Social Security system. We concluded above that the CNMI is within the United States for purposes of FICA taxation, and that subsequent legislation by Congress did not alter the scope of FICA taxation under the Covenant. Thus, § 606(b) of the Covenant applies the employer FICA tax to Hyunjin, as a CNMI employer. Accordingly, Hyunjin is not entitled to a refund of its FICA taxes, all of which were paid after § 606(b) came into effect. Op. at 287. The Court of Federal Claims correctly granted the government's motion for judgment on the pleadings as to Hyunjin.