The Samoan Fono is calling on the U.S. Congress to maintain and keep in full force a federal tax incentive due to expire in two years, that benefits the local canneries.
The Concurrent Resolution expresses American Samoa's full support of the Federal Internal Revenue Code (IRS) section 936 tax incentives and benefits for the tuna canneries in the territory and request the US congress to keep in effect these tax incentives for the benefit of the local tuna industry.
This federal code, known as Footnote 936, gives a favorable tax treatment to the two U.S. owned tuna canneries, which they have been enjoying for a while. However, the tax credit is due to expire in 2005.
Congressman Faleomavaega introduced federal legislation to either extend or make permanent this tax incentive for American Samoa only. He describes the measure as a means "to save American Samoa's canned tuna industry and to encourage economic growth and development in the Territory."
Called the American Samoa Possession Tax Credit Act of 2003 or H.R. 1424 the federal measure is with the appropriate U.S. House committee for review.
Faleomavaega has also called on the Fono for support.
For the Concurrent Resolution it states that there have been continued operations in the territory by the two tuna canneries for more than 30 years contributing "significantly to the welfare and well-being of this territory's economy". "It is estimated that American Samoa's economy is more than 85 percent dependent, directly and indirectly on tuna canning operations," the Concurrent Resolution points out. However, it notes that the Fono has been "informed and believes" this federal tax benefit is due to expire in 2005 and will have a devastating impact on the territorial economy.
"The expiration of the said tax incentive benefits will have devastating, serious and negative consequences upon the territory, its economy including a decrease in production or departure of one or both of the existing canneries resulting in massive unemployment and insurmountable financial problems," the Concurrent Resolution explained.
Therefore, the Concurrent Resolution said the Fono fully supports IRS section 936 "and respectfully requests the Congress of the United States of America to keep these incentives and benefits in full force and effect after the year 2005, so as to maintain economic order and stability in American Samoa".
Additionally, the Fono asked that both the Governor and Congressman Faleomavaega are requested to take appropriate action to support the extension and maintenance of this IRS code beyond 2005.
Copies of the Concurrent Resolution are to be forwarded it to appropriate and necessary individuals in Washington D.C. Contact has been made with the US Department of Commerce, officials of the Interior Department and other federal officials to assist in American Samoa's efforts.
Faleomavaega also said the chairman and the ranking member of the US House Ways and Means Committee are aware of American Samoa's need for an extension of IRS section 936 federal tax credits and benefits.