P.R. Laws tit. 23, § 693b
(a) Types of exemptions. — Every eligible business shall be exempted from the payment of the taxes and levies mentioned in clauses (1), (2) and (3) of this subsection for a period of ten (10) years.
(1) Exemption regarding municipal and Commonwealth taxes on real and personal property. — Property utilized in the development, organization, construction, establishment or during the course of the operations described in subsection (a)(6) of § 693a of this title shall be exempted from all municipal and Commonwealth taxes on real and personal property in the following manner:
(A) During the first five (5) years, starting from the date fixed pursuant to subsection (b) of this section, it shall enjoy a ninety percent (90%) exemption.
(B) During the next five (5) years, including and comprised between the sixth and tenth year, starting from the date fixed pursuant to subsection (b) of this section, it shall enjoy a seventy-five percent (75%) exemption.
(C) In the case of hotels or condohotels that are eligible businesses and do not operate casinos, gaming rooms, or similar activities, the exempted percentage shall be ninety-five percent (95%) during the term fixed in paragraph (A) of this section and eighty percent (80%) during the term fixed in paragraph (B) of this section.
(D) In the case of guest houses that are eligible businesses, the exemption percentage shall be fifty percent (50%) for the periods established by paragraphs (A) and (B) above.
(2) Exemption regarding municipal business licenses, excise taxes and other municipal taxes. — Eligible business, except guest houses, will not be subject to municipal business licenses, excise taxes and other municipal taxes levied by any ordinance of any municipality, as of the date fixed pursuant to subsection (b) of this section. Guest houses will have an exemption of fifty percent (50%) of the payment of business licenses, excise taxes and other municipal taxes.
(3) Exemption regarding consumer goods. —
(A) In general. — As of the date fixed pursuant to subsection (b) of this section, every eligible business, except guest houses, shall be exempt from payment of taxes levied under the §§ 9001 et seq. of Title 13, known as “Excise Tax Act” with regard to those articles acquired in Puerto Rico that are used in the development, organization, construction, establishment or during the course of the operations described in subsection (a)(6) of § 693a of this title.
(B) Articles acquired outside of Puerto Rico. — The exemption granted by paragraph (A) of this clause in the case of articles acquired outside of Puerto Rico by eligible businesses will apply only if the eligible business demonstrates to the satisfaction of the Economic Development Administrator that it made a genuine effort to acquire said articles in Puerto Rico, but when the quality, quantity, price or availability in Puerto Rico were taken into consideration, their acquisition was not economically feasible. The Economic Development Administrator shall issue a certificate attesting that the eligible business made the required genuine effort. The Economic Development Administrator shall approve those regulations needed for these purposes.
(C) Exemptions. — The exemptions granted under this clause will not be applicable:
(i) To those goods on hand or other property of such nature that they would properly be included in the eligible business’ inventory pursuant to § 8422 of Title 13, and which represent property owned primarily for sale in the ordinary course of the business or industry, and
(ii) to the room occupancy tax levied upon hotel rooms by §§ 9001 et seq. of Title 13.
(D) Rebates. — The Secretary of the Treasury shall reimburse any tax paid on the sale or introduction of articles sold to eligible businesses in the manner, and with the limitations prescribed in §§ 9001 et seq. of Title 13, known as the “Excise Tax Act”.
(b) Beginning of the exemption. — The exemptions provided under subsection (a) of this section will begin:
(1) With regard to real estate and personal property taxes, from the 1st of January of the calendar year in which the intent to avail itself of the benefits of this chapter is notified to the Secretary of the Treasury;
(2) with regard to municipal business licenses, excise taxes and other municipal taxes, from the 1st of July, or the 1st of January (whichever comes first) following the date of the notice referred to in clause (1) of this subsection, and
(3) with respect to taxes levied under the §§ 9001 et seq. of Title 13 known as “Excise Tax Act”, from the date of notice referred to in clause (1) of this subsection.
The eligible business shall have the option of separately establishing the beginning of its exemption period with respect to the taxes referred to in the preceding clauses (1), (2) and (3) of this subsection, by submitting separate notices to the Secretary of the Treasury; Provided, That all exemptions must begin within the same twenty-four (24)-month period.
(c) Limitations. — None of the contents of subsection (b) of this section will authorize the rebate of those taxes that were properly assessed, or levied, and paid, prior to the dates mentioned in subsection (b) of this section.
History —June 2, 1983, No. 52, p. 94, § 3; May 31, 1988, No. 35, p. 132, § 2.