The Northern Mariana Islands' Commonwealth Economic Development Authority (CEDA) has granted MACS - Micronesian Air Connection Services a qualifying certificate, giving the start-up a 100% tax break on gross revenue, corporate income, and individual income taxes.
The newspaper Marianas Variety reported that CEDA's board of directors unanimously approved the tax waiver during a December 19 meeting. ch-aviation recently reported on an application by J&P Holdings, MACS's ultimate controlling entity, for the qualifying certificate. The company intends to invest the money that would have otherwise been remitted as taxes into the business.
A US Department of Transportation filing indicates that another J&P Holdings subsidiary, Szabo Aerospace, plans to use its Cessna (single turboprop) C208Bs to operate on the Saipan-Rota International, Saipan-Tinian, and Saipan-Guam International city pairs three times per day, seven days a week, under the MACS - Micronesian Air Connection Services brand.
MACS would provide local residents with an alternative to Star Marianas Air (S2, Tinian), which enjoys a monopoly on two of these three routes and continually threatens to axe flights because of disputes with local government agencies.
J&P Holdings told CEDA it would invest USD8.2 million in MACS in the first three years of operations. The qualify certificate is valid for 22 years, contingent on MACS maintaining flights and reporting financial and traffic data to CEDA. Previously, a spokesperson for J&P Holdings had said the MACS business case was not viable without the qualifying certificate.
“This is a good public benefit," said David Guerrero, economic development manager at CEDA.
J&P Holdings is an entity controlled by John J Stewart and his wife, Paula Stewart. He told the newspaper he was happy with the outcome and that once up and running, MACS intends to use a nine-seat C208B on the Saipan-Rota and Rota-Guam routes and an eight-seat C208B between Saipan and Tinian.
