Allowing American Samoa to use $5 million in leftover federal stimulus money for a work credit program and repatriate to ASG coffers any federal taxes forgiven by the federal government for StarKist Co., are two issues that Gov. Lolo Matalasi Moliga plans to raise with U.S. Internal Revenue Service officials at meetings in Washington D.C. next month.

These two issues are among the matters on the agenda that the governor told Fono leaders early this month would be discussed with new Congresswoman Aumua Amata, who was on island on Jan. 12 for the Fono opening followed by her meeting with the governor and Fono leaders.

STIMULUS MONEY

As a result of the federal American Recovery and Reinvestment Act, or stimulus money, in 2009, funds were sent to the U.S. territories to pay for the federal Making Work Pay Credit (MWPC), which is based on the person's earned income.

In his agenda letter to the Fono leaders, the governor said all territories— except American Samoa— have fully exhausted their respective allocations, which are provided by the IRS.

“We have $5 million remaining,” he said, adding that he has written to the IRS requesting the use of the remaining money based on the fact that all other insular areas have used their allocations.

He further noted that the Tax Office manager was in Washington D.C. recently and Amata’s support is needed to urge the IRS to approve ASG’s request for use of the remaining $5 million. (The governor didn’t elaborate on the total amount received by ASG for the WMPC or how he plans to use the remaining $5 million.)

As previously reported by Samoa News, MWPC is paid out to those who were employed or working in 2009 and 2010— and the deadline to file with the local Tax Office to receive the credit was October 2011.

Based on a plan submitted by ASG and approved by the U.S. Treasury, the ASG received in 2010 the first lump sum of $8.6 million for the MWPC, which was held in a separate bank account. The following year, ASG received the second payment of $10 million.

MWPC is 6.2% of a taxpayer’s earned income with a maximum credit of $800 for a married couple filing a joint return and $400 for other taxpayers, according to the IRS.

STARKIST FEDERAL CREDIT

In his agenda letter to Fono leaders, the governor explained that under federal tax credit benefit IRC 30A, StarKist Co., received $56 million in tax credits to off-set any corporate income tax accrued from its American Samoa cannery operation.

At the same time, StarKist received tax exemption from ASG under its tax exemption certification, said Lolo, adding that he has written to the IRS requesting the federal agency to “repatriate to the American Samoa Government taxes forgiven due to its Tax Exemption Certificate, as it is clear that StarKist received double tax exemption on the same income earned by its plan in American Samoa.

He says this is an important issue because it could mean windfall money for ASG.

GOVERNOR’S OFFICE REPLY

Responding to Samoa News questions, the governor’s executive assistant, Iulogologo Joseph Pereira said, “We have not received any response [from the IRS] on these issues.”

He told Samoa News last Friday that these issues will be among the matters that the governor will address with the IRS when he attends the National Governors' Association Winter conference and the Interagency Group on Insular Affairs meeting. 

Both meetings are usually held in February of each year, but as of press time, there were no confirmed dates.