P.R. Laws tit. 13, § 10435
(a) In addition to any other exemption from excise taxes or the sales and use tax granted under Subtitles B and BB, respectively, of the Internal Revenue Code of Puerto Rico, the following articles introduced or acquired directly or indirectly by a business holding a decree grated under this chapter shall be fully exempt from said taxes during the exemption period set forth in this chapter:
(1) Any raw material to be used in Puerto Rico in the production of green energy, for the purposes of this subsection and the applicable provisions of Subtitles B and BB, respectively, of the Internal Revenue Code of Puerto Rico, the term “raw material” shall include:
(A) Any product in its natural form derived from agriculture or extractive industries, and
(B) any byproduct, residual product or semi-manufactured or finished product.
(2) The machinery, equipment and accessories thereof used exclusively and permanently in the transport of raw material within the circuit of the exempt business, the machinery, equipment, and accessories used to produce green energy or that the exempt business is bound to acquire to comply with a federal or state law or regulation for the operations of the eligible activity.
Notwithstanding the foregoing, the exemption shall not cover machinery, devices, equipment or vehicles used, in whole or in part, in the administrative or commercial phase of the exempt business, except in cases where at least ninety percent (90%) thereof is also used in the production of green energy, in which case, the same shall be deemed to be used exclusively to carry out the eligible activity.
(3) Any machinery and equipment that must be used by an exempt business to comply with environmental safety and health requirements shall be fully exempt from the state excise taxes as well as from the sales and use tax.
(4) Chemical materials used by an exempt business for wastewater treatment.
(5) Energy efficient equipment duly certified by the Administration.
(6) Electric power substations.
(b) Exemptions. — The following use and consumption articles used by the exempt business that holds a decree granted under this chapter, regardless of their area or location or their use, shall not be deemed to be raw material, machinery, or equipment for purposes of subsection (a) of this section:
(1) Any construction materials or precast structure;
(2) any electrical material and water pipes attached to the structures;
(3) lubricants, grease, wax, and paint not related to the energy production process;
(4) street and parking area lighting, and
(5) treatment plants.
History —July 19, 2010, No. 83, § 2.14.