Final version of US tax bill excludes credit for American Samoa
The U.S. tax reform bill that’s expected to clear Congress on Wednesday, 20 December will not include an extension of an economic development credit for American Samoa. However, American Samoa’s delegate in Congress said she’s hopeful the program, which StarKist’s chief executive officer has called critical to the company’s operations in the South Pacific territory, will be taken up next year.
The bill still will help companies like StarKist, which employs about 2,300 workers at its processing and canning plant in American Samoa, by reducing their tax burdens, U.S. Delegate Aumua Amata said. She said she expects that to help the territory remain competitive for jobs in the tuna industry.
“We’re also encouraged with the prospects of further consideration in 2018 of the American Samoa Economic Development Credit specifically, along with a series of similar tax extender requests from other territories and around the country,” Amata said in a statement. “We look forward to continuing to work with Governor Lolo Matalasi Moliga on this ongoing effort to strengthen our economy.”
Originally, the House’s version of the tax bill included the credit. The Senate’s version, however, did not. When the conference committee reached an agreement on the final bill, it left off initiatives like the Samoan tax credit, which had expired at the beginning of this year.
In an interview last month with the Wall Street Journal, StarKist CEO Andrew Choe said the credit helps the Samoa plant be competitive with production facilities in Asia.
On Tuesday, the company did not indicate if any immediate changes would take place at the plant. However, it did release a statement supporting Amata’s efforts, both in the tax bill and the push to get it renewed next year.
“Without this credit, it would not be economically viable to manufacture in the American Samoan Territory,” the company said. “It is becoming increasingly difficult for American Samoa to compete with other manufacturing locations where labor costs and other expenses are substantially lower and subsidized. Our competition is doing a bulk of its production in countries like China and Thailand and reaps the financial benefits of cheap labor and subsidized costs. StarKist, on the other hand, is trying to sustain a business on U.S. soil and is being penalized with increased costs and short-term fixes.”
Amata thanked her Congressional colleagues who supported the tax credit program and added that she’ll keep working to make sure Congress understands the needs of her district, which has about 56,000 people and is located more than 7,000 miles from the capital.
“At every opportunity in Washington, D.C., we will continue to educate and inform people on the unique circumstances of American Samoa’s geographic and economic isolation, and make the case that our federal tax and economic policies should reflect those realities,” Amata said. “We’ll continue working to encourage investment and preserve jobs in American Samoa.”