Bank of America, National Trust & Savings Association v. Joaquin G. Blaz, Director of Revenue and Taxation, Government of Guam

Appellant Bank of America contends that since it is compelled to pay the Guam territorial income tax as imposed by § 31 of the Organic Act of Guam, 64 Stat. 392 (1950), 48 U.S.C. § 1421i, the additional burden of the 4% net profits tax imposed by the Government of Guam as a business privilege tax (Guam Government Code § 19541.-06) violates 12 U.S.C. § 548 , which allows the local government to tax the net income of a bank but once. Bank of America seeks a refund of approximately $185,000 paid to the Government of Guam in 1969, 1970, and 1971. The trial court and the District Court of Guam (Appellate Division) both ruled in favor of the Government of Guam. We affirm.

Although there is no dispute that the Guam territorial income tax was enacted by Congress, the issue is whether or not it is nevertheless to be considered an imposition by the Government of Guam for the purposes of 12 U.S.C. § 548 .

A review of some of the pertinent cases may be helpful in resolving this issue. The tax has been held not to be a federal tax collected by the United States but rather a territorial tax collected by the Government of Guam. Laguana v. Ansell, 102 F.Supp. 919 (D.Guam 1952), aff’d…