Recommendation 12: Developers Infrastructure Tax Credits

FROM: Tourism and Infrastructure Committee, Governor’s Council of Economic Advisers


TO: Governor Ralph DLG Torres and Chairman Jerry Tan


SUBJECT: Allowance of Developers Infrastructure Tax Credits for Culturally Appropriate Designs


The CNMI is a destination with a rich and cherished historical and cultural background. The Chamorro and Carolinian indigenous cultures are unique in the world and offer the international tourism marketplace an opportunity to expand their cultural experiences while in the Commonwealth. The cultural resources present in the CNMI are, however, underutilized in the marketing of the CNMI to prospective tourists, and their presence here provides limited opportunity to experience the islands’ culture. Existing facilities do not represent the cultural art or images inherent within the islands’ heritage and culture and designs of privately operated tourist attractions are without signifying characteristics that distinguish them from any other location in the world.


The Council recognizes these factors and recommends providing developers in the CNMI an incentive to incorporate cultural characteristics specific to the CNMI into the development of new structures and tourism amenities through the allowance for developers to offset the costs incurred by incorporating culturally and historically significant features to projects against their Developers Tax. Presently, the Developers Tax Credit provides 4 criteria of acceptable costs that can be credited against the 2% tax on the development cost. The Council recommends that a 5th criterion through an amendment to 4 CMC § 1943 be added to deduct from the total tax liability the costs incurred in including culturally and historically relevant features to the development. These features can be guided by the Department of Public Works, the Historic Preservation Office, and the Commonwealth Arts Council to ensure consistency and accuracy in design.


Incorporating the CNMI’s culture into the built tourism infrastructure enhances the uniqueness of the CNMI’s tourism product, and through incentivizing its development, increases the presence of the culture in the environment where the community lives. Creating a market for the culture of these islands serves both an economic objective, as well as preserves the culture in the structures and visual environment for generations.


Concurred by the Members of the Tourism and Infrastructure Committee

Governor’s Council of Economic Advisers