Ley 108 del 2008

(No. 108)

(Approved July 11, 2008)

AN ACT

To amend Section 2301, and to ad a new Section 2512A to Act No. 120 of October 31, 1994, as amended, for the purposes of exempting from the sales and use tax ("IVU") those articles and equipment for persons with disabilities to compensate physical and physiological deficiencies; and for other purposes.

STATEMENT OF MOTIVES

Act No. 117 of July 4, 2006, known as "Taxpayers Justice Act of 2006," amended the "Puerto Rico Internal Revenue Code of 1994," (hereinafter known as the "Code"), mainly to eliminate the general excise tax (known as the 6.6% excise tax) and to impose a broad based sales and use tax (hereinafter "IVU"). Since its effective date - November 15, 2006 - it has been necessary to introduce a series of technical and substantive amendments in order to guarantee the correct and fair implementation thereof.

It was precisely through Act No. 61 of 2007 that said Act No. 177 was amended, to exempt from IVU: 1) hypodermic needles and syringes, chemical compounds used for treating diseases, conditions or injuries in human beings, which are generally sold for internal or external use to heal, mitigate, treat or prevent diseases and conditions in human beings; 2) prosthesis; 3) insulin; 4) oxygen; 5) any equipment for medical treatment which qualifies for total or partial reimbursement by Medicare, Medicaid, Health Insurance Plan of the Government of the Commonwealth of Puerto

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Rico or under contract or health insurance policy issued by a person authorized to underwrite insurance or medical services contracts in the Commonwealth of Puerto Rico. This legislation failed to include assistive technology equipment.

Subsection

(a) (a) of Section 1023 of the Code, defines assistive technology equipment as any device, part of equipment or system purchased by the consumer or provided by any government agency or dependency, whether original, modified or adapted that is used to maintain, increase or improve the abilities of persons with disabilities. This includes, but it is not limited to: wheelchairs, motorized wheelchairs, motorized equipment used for mobility, adapted computers, electronic communication equipment, adapted computer software, mechanical equipment for reading and headphones, among others.

In Puerto Rico, there is a significant number of people who need to use assistive technology equipment in order to perform daily tasks, whether at home or in their workplace. At present, these equipments are subject to the payment of sales and use tax ("IVU") when acquiring said equipment by purchase or donation.

Act No. 117, supra, contains countless exclusions and exemptions from IVU. The inclusion of assistive technology equipment to this list of exemptions from IVU cannot be further postponed. The costs related to the acquisition of the equipment are in itself excessively high. Therefore, the increase that the IVU represents, in some cases, could be the difference between being able to acquire the equipment or not.

Justice must be done to those persons with disabilities and their families, who bear a great part of the budgetary burden, since the total cost of this equipment is not covered by health insurances. Furthermore, it is essential,

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that steps are taken to distribute the tax burden fairly and equally in order to continue to defend the rights of persons with disabilities and to grant this relief to said persons and their families.

BE IT ENACTED BY THE LEGISLATURE OF PUERTO RICO:

Section 1. - A new Section 2512A is hereby added to Act No. 120 of October 31, 1994, as amended, to read as follows: "Section 2512A. - Exemption for Articles and Equipment for Persons with Disabilities to Compensate Physical and Physiological Deficiencies.

(a) The articles and equipment specifically designed to compensate physical and physiological deficiencies in "persons with disabilities," as said term is defined in Act No. 264 of August 31, 2000, and in Act No. 238 of August 31, 2004, as amended, known as "Bill of Rights of Persons with Disabilities," shall be exempted from taxes set forth in this Subtitle.

(b) The exemption herein provided also contemplates assistive technology equipment, which includes any device, part of equipment or system, be it original, modified or adapted, used to maintain, increase or improve the abilities of a "person with disabilities." The aforementioned equipment includes the following: wheelchairs, motorized wheelchairs, motorized equipment used for mobility, adapted computers, electronic communication equipment, adapted computer software, mechanical equipment for reading and headphones, among others.

(c) Any person with the right to claim the exemption herein granted shall certify to the vendor his/her condition as exempted person through the procedures provided by the Secretary to such effects."

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Section 2. - Section 2301 of Act No. 120 of October 31, 1994, as amended, is hereby amended to read as follows: "Section 2301. - General Definitions For the purposes of this Subtitle the following terms, words and phrases shall have the general meaning expressed below, except when the context clearly indicates another meaning.

(a) ...

(ll) Prosthesis ... (1) ... (2) ... (3) ..."

Section 3 - Effectiveness - This Act shall take effect immediately after its approval and its provisions shall take effect thirty (30) days after the approval thereof.

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CERTIFICATION

I hereby certify to the Secretary of State that the following Act No. 108 (S.B. 2261) of the $7^{ ext {th }}$ Session of the $15^{ ext {th }}$ Legislature of Puerto Rico:

AN ACT to amend Section 2301, and to ad a new Section 2512A to Act No. 120 of October 31, 1994, as amended, for the purposes of exempting from the sales and use tax ("IVU") those articles and equipment for persons with disabilities to compensate physical and physiological deficiencies; and for other purposes, has been translated from Spanish to English and that the English version is correct.

In San Juan, Puerto Rico, today $28^{ ext {th }}$ of August of 2008.

Francisco J. Domenech Director