HOTELS OF the MARIANAS, INC., D/B/A Hilton International Guam, Plaintiff-Appellee, v. GOVERNMENT OF GUAM, Defendant-Appellant

Opinion by Judge THOMPSON.

The Government of Guam (Guam) appeals the district court’s grant of summary judgment in favor of Hotels of the Marianas (Guam Hilton). The dispute is over the amount of rebate due the Guam Hilton on taxes payable to Guam on corporate income for tax years 1986 through 1990.

Pursuant to a statutory scheme designed to promote investment in Guam, the Governor of Guam (Governor) issued Qualifying Certificate 169 (QC 169) to the Guam Hilton. QC 169 provides for a 75% rebate “of corporate income tax” for fifteen years from the effective date of the QC.

The Guam Hilton argues QC 169 entitles it to a rebate on all corporate income tax. Guam’s Department of Revenue and Taxation (Department) argues the rebate is limited to “active” income and is not permitted for “passive” income. The Department defines active income as income from the rental of hotel rooms. It defines passive income as income from any activity at the hotel that produces revenue, other than the rental of hotel rooms.

We reject the Department’s distinction between active and passive income and hold the plain language of the governing statutes and QC 169 entitle the Guam Hilton to a 75% rebate of…