The Educator Appreciation Act of 2003
Bill 222
- Explanation Sheet -

• After years of the government chronically under-funding public schools, educators have responded to the needs of their students by spending their own money on various supplies including books, pencils, crayons, paper, glue, scissors and erasers.

• Currently, the U.S. tax code allows a $250 deduction from adjusted gross income allowing teachers and other educators to deduct qualified expenses (even if the educator does not itemize the expenses as deductions).

• Given Guam’s inadequate funding of the school system, it is almost a certainty that educators will continue to attempt to meet the needs of their students by spending their own money. Bill 222 allows educators to claim a tax rebate to recover up to five hundred dollars ($500) of personal expenditures over and above the two hundred-fifty dollar ($250) deduction allowed by the Internal Revenue Code.

• While $250 tax deduction may be sufficient for teachers in some mainland states. It is woefully inadequate for many teachers in the Guam Public School System.

• For nearly 40 years, GEDA Qualifying Certificates have been issued to businesses allowing them tax rebates to encourage economic development. Bill XXX extends the functional equivalent of the Qualifying Certificate (The Educator’s Qualifying Certificate or EQC) and tax rebate, on a much smaller scale, to teachers. While this rebate is insufficient to make up for the economic hardship suffered by teachers, it is one way for this community to show its appreciation to its educators.

• Teachers traditionally spend there own money on various supplies e.g. bulletin board materials, books, pencils, crayons, paper, markers, glue, erasers, educational games, chairs, scissors, posters, math supplies, art supplies, i.e. paint, brushes, magnifying glasses, science materials, and biology supplies.

• Eligible educator means a kindergarten through grade 12: Teacher, Instructor, Counselor, Principal, or Aide.

• Qualified expenses means un-reimbursed expenses exceeding $250 an eligible educator paid or incurred for books, supplies, computer equipment (including related software and services), other equipment , and supplementary materials that the educator uses in his or her classroom. For courses in health or physical education, expenses for supplies are qualified expenses only if they are related to athletics.

• Tax Rebate for Educator Expenses. A rebate in an amount equal to the qualified expenses, but not to exceed $500, of personal income tax paid by resident individual taxpayers, who are eligible educators, to the government of Guam.

• Procedure to claim rebated taxes. When a tax return is accompanied by (an) EQC(s) the amount of tax due prior to the rebate shall be deposited with the government of Guam at the time of filing the income tax return. Alternatively, if no payment is due at the time the tax return is filed, the Tax Commissioner shall credit the amount of the EQC to the Rebate Fund from taxes paid by the taxpayer. Absent a finding by the Tax Commissioner of Guam that the rebate is not payable the rebate shall be withdrawn from the deposit and returned to the taxpayer(s) within one hundred and eighty (180) days of the deposit without interest.

• Implementation by Tax Commissioner. The Tax Commissioner of Guam shall no later than thirty (30) days after the effective date, develop necessary procedures to implement this chapter and to that end shall:

(a) issue such rules and regulations as he may deem necessary to implement the this chapter.
(b) promulgate such forms and publications as are necessary to assist eligible taxpayers to take advantage of this chapter.
(c) develop a procedure to allow the set off of an unpaid tax rebate from a prior year against a current year’s tax liability.

• Sunset Provision. This act shall be ineffective in the tax year following the receipt by the Director of Revenue and Taxation of the certificate of the Superintendent of Education that it is no longer necessary for eligible educators to spend there own money on qualified expenses, as those terms are defined in §3402, in order to provide an adequate public education.

• Effective dates. This act is effective upon adoption provided that the tax rebate created by section 3403 shall be effective for tax liability arising in 2004.