Ley 113 del 2001
Resumen
Esta ley enmienda la Ley de Incentivos Contributivos de 1998 para extender los beneficios de doble deducción por gastos de capacitación y desarrollo e investigación a todas las empresas exentas bajo cualquier ley de incentivos contributivos en Puerto Rico, no solo a las cubiertas por la Ley de 1998. El objetivo es fomentar la retención de empleos existentes.
Contenido
(No. 113)
(Approved August 17, 2001)
AN ACT
To amend subsections
(b) and
(c) of Section 4 of Act No. 135 of December 2, 1997, as amended, known as the "Tax Incentives Act of 1998," in order to extend the additional tax deduction benefits for training expenses and for research and development expenses to every exempted business covered by any tax incentives laws of Puerto Rico.
STATEMENT OF MOTIVES
One of the many favorable features of the Tax Incentives Act of 1998 is that it provides as a stimulus for the establishment and retention of jobs in Puerto Rico, a double-deduction tax benefit on the excess of the average of the expenses incurred during the three taxable years prior to January 1, 1998, in training programs to improve productivity and quality control, promote total quality management, and improve communication skills of employees. It also provides a double deduction for expenses incurred by the exempted businesses in Puerto Rico for research and development or improvement of new industrial processes or products.
These provisions are applicable only to exempted businesses covered under Act No. 135 of December 2, 1997, as part of the tax incentives package this Legislature approved to stimulate a strong industrial and economic development on our Island by creating new jobs through the promotion and establishment of new industries and by retaining existing jobs
through the renegotiation and extension of decrees in effect under preceding incentive laws.
Close to 624 tax exemption applications of various kinds had been filed as of December 31, 2000, before the Industrial Tax Exemption Office. Of these, 501 applications concern cases that involve manufacturing, services, renegotiations, and research and development, of which 44% (219) were cases originating under preceding incentive laws, whether by extensions, renegotiations, conversions, or some type of legal dispensation that would allow them to avail themselves of the provisions of Act No. 135 of December 2, 1997.
However, since the purpose of the public policy of the Commonwealth of Puerto Rico is to foster the retention of existing jobs by providing the aforementioned tax benefits granted by Act No. 135 of December 2, 1997, said policy should also be extended to cover the retention of existing jobs which may still be covered under preceding decrees. It is a fact that at the end of their original tax exemption periods, said decrees could eventually be covered under the tax benefits granted by Act No. 135 of December 2, 1997. These benefits provided in the decrees in effect granted under preceding tax incentive laws are as effective at present as those provided under Act No. 135 of December 2, 1997, for bolstering and retaining jobs. Besides, the greatest economic impact of these benefits that might have been experienced by the Treasury of Puerto Rico has already taken place, since 44% of the applications filed under Act No. 135 of December 2, 1997, arise from tax exemption decrees granted under preceding tax incentive laws; thus, the number of concessionaires that still remain under preceding incentive laws is minimal, compared to that which existed when Act No. 135 became effective in January 1998.
In consideration of the fact that it is convenient and reasonable to extend the benefits of the double deduction for training expenses and for the expenses incurred in research and development activities available under Act No. 135 of December 2, 1997, this Legislature recommends the approval of this measure in order to provide similar incentives to other exempted businesses operating under preceding incentive laws.
BE IT ENACTED BY THE LEGISLATURE OF PUERTO RICO:
Section 1.-Subsections
(b) and
(c) of Section 4 of Act No. 135 of December 2, 1997, as amended, are hereby amended to read as follows: "Section 4.—Special Deductions.—
(a) . . .
(b) Deduction for Expenses for Training and Improvement of Human Resources.-
Every exempted business that holds a decree granted under this Act or under preceding tax incentive laws shall be granted, in addition to any other deduction provided by law, a special deduction equal to the amount of the expenses for training to improve productivity and quality control, promote total quality management, and improve the communication skills of the employees, incurred in excess of the annual average of said expenses incurred during the three (3) taxable years that ended before the effective date of this Act. Said special deduction shall not exceed the industrial development income of the taxable year of the exempted business, computed without the benefit of the special deduction provided by this subsection, but with the benefit of the other special deductions provided in this Section. The
special deduction in excess of the maximum allowed under this subsection may not be carried over to subsequent taxable years.
(c) Deduction for Research and Development Expenses.Every exempted business that holds a decree granted under this Act shall be granted, in addition to any other deduction provided by law, a special deduction equal to the amount of the expenses incurred in experiments with and research and development of new industrial processes or products, or the improvement thereof, that are deductible in the taxable year under Subtitle A of the 'Puerto Rico Internal Revenue Code,' excluding any amount received as a donation, subsidy, or incentive from the Government of Puerto Rico for these purposes, and also excluding any investment in property, plant facilities and equipment covered under the deduction provided in subsection
(e) of this Section. Said special deduction may not exceed the industrial development income for the taxable year of the exempted business that holds a decree granted under this Act, computed without the benefit of the special deduction provided in this subsection, but with the benefit of the other special deductions provided in this Section. However, any special deduction not allowed because of the above limitation may be carried over indefinitely to be used as a deduction against the industrial development income of the exempted business that holds a decree granted under this Act or under preceding laws, until such excess is exhausted. Provided, that any special deduction not allowed because of the above limitation that is available on the expiration date of the income tax exemption period of the decree of the exempted business that holds a decree
granted under this Act or under preceding tax incentive laws, may not be used against the income of taxable operations.
(d) ... ${ }^{\prime \prime}$
Section 2.-This Act shall take effect immediately after its approval.
6
August 5, 2002
Elba Rosa Rodríguez-Fuentes, Esq., Director of the Office of Legislative Services of the Legislature of Puerto Rico, hereby certifies to the Secretary of State that she has duly compared the English and Spanish texts of $\underline{ ext { Act No. } 113}$ (H.B. 778) of the $1^{ ext {st }}$ Session of the $14^{ ext {th }}$ Legislature of Puerto Rico, entitled:
AN ACT to amend subsections
(b) and
(c) of Section 4 of Act No. 135 of December 2, 1997, as amended, known as the "Tax Incentives Act of 1998," in order to extend the additional tax deduction benefits for training expenses and for research and development expenses to every exempted business covered by any tax incentives laws of Puerto Rico, and finds the same are complete, true and correct versions of each other.
Elba Rosa Rodríguez-Fuentes