P.R. Laws tit. 13, § 10437
(a) General rule. — A successor business may avail itself of the provisions of this chapter, provided that:
(1) The exempt predecessor business has not ceased operations for more than six (6) consecutive months before the filing of the exemption application of the successor business, or during the exemption period of the successor business, unless this is due to a force majeure.
(2) The exempt predecessor business maintains its annual average number of jobs for the three (3) taxable years that end with the closing of its taxable year prior to the filing of the exemption application of the successor business, or the applicable part of said period while the decree of the successor business granted is in effect, unless, due to force majeure, said average cannot be maintained.
(3) The number of jobs of the successor business after its first year of operations is greater than twenty-five percent (25%) of the average annual number of jobs of the predecessor business referred to in clause (2) above.
(4) The successor business does not use the physical facilities, including land, buildings, machinery, equipment, inventory, supplies, trademarks, patents, and marketing outlets, having a value of fifty thousand dollars ($50,000) or more and which have been previously used by the exempt predecessor business. The foregoing shall not apply to additions to property devoted to the production of green energy, even when said additions constitute physical facilities with a value of fifty thousand dollars ($50,000) or more and which are being or have been used by the main unit or exempt predecessor business. The above notwithstanding, the Secretary of Development may determine, after recommendation of the agencies issuing tax exemption reports, that the use of the physical facilities or the acquisition of any facility of an exempt predecessor business that is or was in operation shall be for the best economic and social interests of Puerto Rico, in view of the nature of said facilities, the number of jobs, the amount of the payroll, the investment, the location of the project, or other factors that in his/her judgment merit said determination.
(b) Exceptions. — Notwithstanding the provisions of subsection (a) of this section, the conditions of the same shall be deemed to be complied with, when:
(1) The successor business assigns to the exempt predecessor business such a portion of its annual number of jobs as may be necessary so that the annual number of jobs of the exempt predecessor business is maintained at or is equal to the annual number of jobs that said exempt predecessor business must maintain. The assignment provided herein shall not be covered by the decree of the successor business, but it shall enjoy the benefits provided under this chapter, if any, with respect to the portion so assigned which the exempt predecessor business would have enjoyed thereon, as if such a portion had been its own annual production. If the exemption period of the exempt predecessor business has expired, the successor business shall pay the corresponding taxes on such a portion of its annual production assigned to the exempt predecessor business.
(2) The successor business declares as not covered by its decree, for property tax purposes, such a portion of its facilities as may be necessary so that the investment in physical facilities of the exempt predecessor business is maintained at or is equal to the total investment in physical facilities at the closing of the taxable year of such an exempt predecessor business prior to the filing of the exemption application of the successor business, minus depreciation thereon and minus any decrease in the investment in physical facilities that may have occurred as of the date the provisions of this clause are applied as a result of an authorization to use the same under subsection (a)(4) of this section. In those cases in which the tax exemption period of the exempt predecessor business has not expired, the successor business shall enjoy the benefits provided by this chapter which the exempt predecessor business would have enjoyed with respect to the portion of its investment in said physical facilities that for the purposes of this clause it declares as not covered by its decree, if the said facilities had been used in producing its GEI.
(3) The Secretary of Development determines, after recommendation of the agencies issuing tax exemption reports, that the operation of the successor business is for the best economic and social interests of Puerto Rico, in view of the nature of the physical facilities, the number of jobs, the amount of the payroll, the investment, the location of the project or any other factors that in his/her judgment merit said determination, including the economic situation undergone by a particular exempt business, and waives its full or partial compliance with the provisions of subsection (a) of this section, with authority to condition the operations as may be convenient and necessary for the benefit of the best interests of Puerto Rico.
History —July 19, 2010, No. 83, § 2.16.