Esta ley enmienda secciones del Código de Rentas Internas de Puerto Rico de 1994 para reclasificar los vehículos de uso múltiple como automóviles a efectos de la aplicación del impuesto de arbitrios. Establece nuevas definiciones para "precio tributable en Puerto Rico" y "precio de venta sugerido al consumidor" para vehículos nuevos y usados, incluyendo vehículos de uso múltiple. Modifica la tabla de impuestos de arbitrios aplicable a los automóviles según su precio tributable y establece disposiciones transitorias para los vehículos en inventario al momento de la aprobación de la ley.
(H. B. 2245) (Conference) (No. 70) (Approved May 30, 2002)
To amend the second paragraph of paragraph (14) and paragraph (15) of subsection
(a) of Section 2001; amend paragraph (1), repeal paragraph (5), amend the last sentence of subsection
(a) amend paragraphs (1) and (4) and repeal paragraph (5) of subsection
(b) and amend paragraphs (1), (3) and (7) of subsection
(c) of Section 2014 of Act No. 120 of October 31, 1994, as amended, known as the "Puerto Rico Internal Revenue Code of 1994," in order to classify multiple-use vehicles as automobiles.
The main function of the Department of the Treasury is to ensure that the fiscal policy of the Commonwealth of Puerto Rico is equitable and fair, and to ascertain that moneys covered into the General Fund through the imposition and collection of taxes are sufficient to meet the obligations and the budget of expenses of the government agencies and entities that render their services to the citizenry.
It is generally known that last year there was a serious problem regarding insufficiency of over five hundred million $(500,000,000)$ dollars to meet the budget of the last fiscal year due to the high level of the public debt of the Commonwealth of Puerto Rico inherited from the past Administration. This situation required the present Administration to establish alternate sources of financing and develop fiscal control measures,
that helped to comply with the Constitutional mandate of closing with a balanced budget.
In turn, the economic situation the Island has endured has not been the most favorable one. During the 2002 fiscal year, the Island has faced an economic decline that had been foreseen from the beginning of the 2000 fiscal year, and which could have been foreseen by the past administration. The situation was further affected by fear and the changes in consumer trends evinced by many of our residents, and throughout the world, after the events of September 11, 2001, in New York City. Unfortunately, these circumstances significantly affected the structural deficit gap between the revenues and recurrent expenses legislated and approved by the past administration. All of these circumstances, which were beyond our control, had an adverse effect on the estimated collections for the General Fund. As a result, the present administration has had to reduce the recommended budgeted expenses by $4.17 %$ and identify resources from recurring sources.
In spite of the fact that the Government of the Commonwealth of Puerto Rico took extraordinary measures to promote and strengthen the local economy, in addition to fostering the use and consumption of goods produced on our Island, these measures were not sufficiently effective. The measures that we need to approve should not only balance the budget of the coming fiscal year, but should also guarantee the financial solidity and the good credit of the Commonwealth of Puerto Rico. Therefore, we find ourselves once again needing to assess the measures taken, as well as to seek other options to collect funds for the treasury, taking into account and providing that the good quality of life that our People deserve is affected in the least possible way. After studying different options, this measure is hereby proposed.
This measure, together with the public policy of controlling expenses effectively and achieving an increment in the budget of our Island, while promoting the economic development of the local economy in general, and along with an efficient monitoring of the compliance of the tax laws of Puerto Rico, will contribute to collect the funds needed to strengthen the economic resources of the Commonwealth of Puerto Rico.
Section 1.- The second paragraph of paragraph (14), and paragraph (15) of subsection
(a) of Section 2001 of Act No. 120 of October 31, 1994, as amended, are hereby amended to read as follows: "Section 2001.- General Definitions
(a) For the purposes of this Subtitle, the following terms shall have the meaning stated below: (1) ... (14) "Taxable price in Puerto Rico" shall mean the "cost in Puerto Rico" plus twenty (20) percent over said cost.
Notwithstanding the above provided, in the case of automobiles, the "taxable price in Puerto Rico" shall be the "suggested consumer sales price", as indicated below. (15)"Suggested consumer sales price," shall mean: (A) New vehicles for sale.- In the case of new automobiles introduced into the country by distributors and authorized dealers, the suggested sales price to the consumer shall include the basic cost of the new automobile model including the optional factory installed equipment, plus insurance and shipping freight, the profit margin of the sales, and the costs associated to the preparation and delivery of
the vehicle. (B) New vehicles for private use.- In the case of new automobiles introduced into the country by persons who shall use them for private use, the "suggested consumer sales price" shall be the suggested manufacturer's retail price as published in the "Black Book New Car Market Guide," or in any authorized and independent sources duly-recognized by the industry, as determined by the Secretary, multiplied by one point thirty (1.30). (C) Used vehicles for sale.- In the case of used automobiles including vehicles known as "vans", "minivans" and customized vehicles, introduced to Puerto Rico by authorized dealers, the "taxable price in Puerto Rico" shall be the suggested sales price multiplied by one point forty (1.40).
For the purposes of this paragraph, the term "suggested sales price" shall mean the suggested sales price as published in the "Black Book Used Car Market Guide" or in any other authorized and independent sources duly recognized by the used automobile industry, as determined by the Secretary for similar models under the classification of "Wholesale Clean" or its equivalent.
Notwithstanding the above, in the case of used automobiles with regard to available models of the calendar year in which the taxable event takes place and of models of that calendar year or the immediately preceding calendar year, the "taxable price in Puerto Rico" shall be determined in the same manner as in the case of new automobiles. (D) Used vehicles for private use.- In the case of used automobiles introduced to Puerto Rico by persons for their
private use, the taxable price shall be that appearing in the column "Retail Clean" of the "Black Book Used Car Market Guide", or the suggested retail sale price established in any authorized and independent source recognized by the industry, as determined by the Secretary, multiplied by one point thirty (1.30).
For the purpose of this paragraph, "private use" shall mean, own use, specific, personal, private, or any other use that is not for resale or sale to third persons. (16) ...'
Section 2.- Paragraph (1) is hereby amended, paragraph (5) is hereby repealed and the last sentence of subsection
(a) is amended; paragraphs (1) and (4) are amended and paragraph (5) of subsection
(b) is repealed, and paragraphs (1), (3) and (7) of subsection
(c) of Section 2014 of Act No. 120 of October 31, 1994, as amended, are hereby amended to read as follows: "Section 2014.—Vehicles
(a) An excise tax shall be levied, collected and paid on every vehicle that is introduced from abroad or manufactured in Puerto Rico, as established subsequently following the description of said vehicle: (1) Automobiles: the percent corresponding to the taxable price in Puerto Rico provided in the following table:
If the taxable price in Puerto Rico is:
The tax will be:
Up to $5,929 $750 (minimum tax)
| Over $5,929 and up to | $750 plus 13% of the excess |
|---|---|
| $10,280 | of $5,929 |
| Over $10,280 and up to | $1,316 plus $25 %$ of the excess |
| $20,560 | of $10,280 |
| Over $20,560 and up to | $3,886 plus $30 %$ of the excess |
| $30,560 | of $20,560 |
| Over $30,561 and up to | $6,886 plus $35 %$ of the excess |
| $43,170 | of $30,561 |
| Over $43,170 | $40 %$ |
This table shall apply to all new and used automobiles, introduced to Puerto Rico, except in the case of new automobiles to be exported. The Secretary shall adjust the price brackets of the above table with the purpose of protecting consumers from the adverse taxable effect that inflation and the consequent increase the consumer sales price could have on the excise taxes in effect, specified in such table. Such adjustment shall be made by means of administrative determination, in a period not greater than three years counted from the effective date of this Subtitle and subsequently, in successive periods of not more than three years. The basis for making said adjustment shall be the Durable Goods Consumption Expenditures Implicit Deflator, as published by the Planning Board. The Secretary shall publish these adjustments in a newspaper of general circulation and shall remit a copy of the adjustments to the Legislature.
In any case, the adjustments made by the Secretary to the price brackets shall have the effect of lowering the taxes that would otherwise apply if the inflationary adjustment had not been made. (2) Truck tractors
17% of the taxable price in Puerto Rico
| (3) | Buses | 20% of the taxable price in Puerto Rico |
|---|---|---|
| (4) | Trucks | 10% of the taxable price in Puerto Rico |
In no case shall automobiles, truck tractors, buses and trucks pay a tax lower than seven hundred fifty dollars ($750).
(b) Definitions.- For the purposes of this Section and of any other applicable provisions of this subtitle, the following terms shall have the meaning stated below: (1) "Automobile" shall mean any vehicle provided with any self-propelled means designed to transport persons, including hearses and wreath coaches, but excluding buses, ambulances and motorcycles. It shall also mean those multipurpose vehicles that due to their design, internal structure, mechanical features and physical configuration may be used to transport freight as well as passengers. It also includes vehicles known by the generic name of "vans," "minivans" and "customized vehicles." (2) ... (4) "Trucks" shall mean and include: (A) Trucks, light trucks, tow trucks and similar selfpropelled vehicles by whatever name they are known, designed for the basic purpose of transporting freight. This term excludes those motor vehicles that due to their design and
internal structure are used for the transportation of passengers, and whose basic although not exclusive purpose, is for the transportation of passengers, which shall be taxable as automobiles.
(c) The following provisions shall complement the application and compliance of this Section: (1) Determination of the suggested sales price.- The suggested consumer sales price of the new and used automobiles shall be determined by the importer or distributor pursuant to the provisions of this subtitle prior to the introduction of the vehicle into Puerto Rico. Provided, that the suggested consumer sales price for each vehicle does not necessarily have to be the same for all dealers, but the excise tax to be paid shall be determined and paid pursuant to the suggested consumer sales price shown on the price tag affixed to the vehicle and determined by the distributor. (2) ... (3) Affixing of suggested consumer sales price tag.- The importer or distributor shall affix a tag, or sign to each automobile, supplied by the Department of the Treasury, with the information that the Secretary may determine is needed so that each vehicle is visibly identified with its suggested consumer sales price. In the case of used automobiles, the Secretary shall determine the manner that the labeling requirement shall be complied with.
(7) Provisions applicable to models of automobiles not comprised among those covered herein.- The Secretary shall establish, for models of automobiles or vehicles not covered or contemplated under the provisions of this subtitle, the listing of information he/she deems pertinent to clearly determine the "suggested consumer sales price" that shall be used to fix the tax to be applied pursuant to this subtitle. In every case this reference price shall not be less than that corresponding to the "Black Book New Car Market Guide," or to what is established in any authorized and independent sources recognized by the industry, as determined by the Secretary, in effect on the date it is used as reference, multiplied by a factor 1.32 . (8) ...
Section 3.- Transitory Provisions: As of the date of approval of this Act, all dealers of vehicles that have new automobiles and multipurpose vehicles in stock shall be subject to the payment of the excise tax corresponding to automobiles as said term is defined in this Act. The excise tax shall be determined pursuant to Section 2014
(a) (1) of Act No. 120 of October 31, 1994, as amended. In the event that the excise tax on new automobiles and multipurpose vehicles has been paid prior to the approval of this Act, the difference between the excise tax levied by this Act and the previously paid excise tax, shall be paid.
The Secretary of the Treasury shall establish through regulations, circular letter or other administrative determination of a general nature, the
norms needed for the application of these transitory provisions. Section 4.- Severability If any Section, subsection, clause, paragraph, subparagraph, or any other part of this Act is declared unconstitutional by a court of competent jurisdiction, the judgment issued to such effect shall not affect, impair or invalidate the remaining provisions of this Act, and its effects shall be limited to the Section, subsection, clause, paragraph, subparagraph, or part of this Act that was found unconstitutional.
Section 5.- This Act shall take effect immediately after its approval.
I hereby certify to the Secretary of State that the following Act No. 70 (H.B. 2245) (Conference) of the $3^{ ext {rd }}$ Session of the $14^{ ext {th }}$ Legislature of Puerto Rico:
AN ACT to amend the second paragraph of paragraph (14) and paragraph (15) of subsection
(a) of Section 2001; amend paragraph (1), repeal paragraph (5), amend the last sentence of subsection
(a) amend paragraphs (1) and (4) and repeal paragraph (5) of subsection
(b) and amend paragraphs (1), (3) and (7) of subsection
(c) of Section 2014 of Act No. 120 of October 31, 1994, as amended, known as the "Puerto Rico Internal Revenue Code of 1994," in order to classify multiple-use vehicles as automobiles, has been translated from Spanish to English and that the English version is correct.
In San Juan, Puerto Rico, today $8^{ ext {th }}$ of October of 2004.
Elba Rosa Rodríguez-Fuentes Director