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Company trying to keep GovGuam honest on cigarette tax collections, asks for weekly progress report

By Johnnie Rosario

WSTCO, the tax-paying cigarette distribution company that took GovGuam to court to force its competitors to pay their fair share of taxes, asked the court today to require a weekly progress report.

The progress report would indicate what work the Department of Revenue and Taxation has done to hire a company that will administer the cigarette stamp tax program mandated two legislatures ago. DRT, through its lawyer at the Office of the Attorney General of Guam, today provided the court proof that it started this process, and said further orders are now moot.

Public Law 34-55 by then-Sen. Michael San Nicolas was unanimously passed by senators following reports that then-Gov. Eddie Calvo's family's cigarette distribution company - MidPac - owed millions in taxes. The measure required tax stamps to be affixed on every pack of cigarettes before those packs could be removed from locked warehouses and sold on Guam. The stamps would be placed in lieu of the payment of the cigarette tax, which would be due 20 days later.

Calvo never implemented the program. Neither did Gov. Lou Leon Guerrero, whose DRT heads claimed the stamp tax program was an unfunded mandate. Then-Speaker Tina Muna Barnes introduced legislation in the 35th Guam Legislature mandating DRT to outsource the administration of the stamp program. Ms. Leon Guerrero signed the measure into law December 2019. The law required DRT to issue a request for proposals within 45 days of enactment.

The RFP has never been issued. WSTCO took GovGuam to court to force implementation of the San Nicolas and Muna Barnes laws. Judge Dana Gutierrez three weeks ago ordered DRT to do just that.

In a response to her order, assistant attorney general Jordan Pauluhn today said the judge's order should be quashed and the case dismissed, in part because DRT has begun the procurement process to hire the stamp tax company.

The written response included a Certification of Record for the procurement by DRT deputy director Frank Leon Guerrero, along with the DRT procurement record showing actions starting as early as January 11, 2021 to implement the law. The last two updates, on April 28 and May 7, 2021, indicate officials from DRT and OAG collaborated to arrive at the second draft of the pending RFP, and to come up with the scope of work within the RFP, and the evaluation points to choose the winning proposal.

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