StarKist Asks For Only 3-Month Extension Of Tax Exemption ff

Source: Samoa News

StarKist Company requested and ASG Tax Exemption Board approved a three-month extension for StarKist Samoa in 2010 while the company awaits the outcome of the American Samoa Protection of Industry and Resources (ASPIRE) legislation now pending in the U.S. Congress.

The tax exemption is renewed on “a year-to-year basis”, said Mary Sestric, the StarKist spokesperson based at the company’s headquarters in Pittsburgh, PA.

Samoa News understands that the previous exemption expired Dec. 31, 2009.

Sestric also said that StarKist appreciates Gov. Togiola Tulafono’s “cooperation in extending the tax exemption for an additional three months into 2010.”

“We requested a three-month extension rather than a one-year extension because we are waiting to learn the outcome of efforts to adopt the ASPIRE proposal,” Sestric explained, responding to Samoa News inquiries. “We cannot make any long-term decisions regarding our American Samoan operations until we have that information.”

The ASPIRE bill, which provides federal subsidies to the canneries and fishing boats that direct deliver whole fish for processing in American Samoa, is pending with the U.S. House Natural Resources’ Subcommittee on Insular Affairs, Oceans and Wildlife.

With the start of the new year, as well as the short-term tax exemption, there are concerns among the business community about the possibility of StarKist implementing another reduction in either workforce or hours and benefits— which was done last year.

“Although we are not announcing reductions at this time, we continue to evaluate the cost-effectiveness and competitiveness of our operations in American Samoa,” said Sestric. “We support the work of American Samoa’s leaders to find a compromise regarding ASPIRE that will take into account the needs of all stakeholders.”

“We must also stress the importance of reaching a resolution quickly so that American Samoa can once again become a globally competitive location for StarKist and the industry in general,” she added.

Sestric told Samoa News last month that “minimum wage increase is one of several factors that are combining to make American Samoa no longer globally competitive for the tuna industry,” but the company is hoping for a positive outcome of the ASPIRE bill.

The next wage hike of 50 cents per hour goes into effect on Sept. 30, 2010, instead of the original provision, which would have had the wage hike in May this year.

The U.S. Government Accountability Office (GAO) is currently conducting a study on the wage impact on American Samoa and the Commonwealth of the Northern Mariana Islands with the first report due in April this year.

Meanwhile, Starkist Samoa resumed production on Jan. 4, after the annual two-week holiday shutdown for maintenance upgrade and other services.