2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 17 - Internal Revenue Code of 2011 (§§ 30001 — 33423) › PART IV - Excise Taxes (§§ 31601 — 31771) › Chapter 1032 - Taxes on Goods (§§ 31621 — 31634) › § 31627 - Crude oil, partially finished and finished oil by-products and other hydrocarbon mixtures

(a) In addition to any other excise tax levied in this part, an excise tax shall be imposed, collected and paid for the use in Puerto Rico of crude oil, partially finished and finished oil by-products, and any other hydrocarbon mixture (excluding natural gas) of $9.25 per barrel or fraction thereof.
(b) In the case of refineries and petrochemical companies, if a gain in volume of end product is obtained as part of their oil refining process, such gain shall be subject to the tax imposed by this section.
(c) For purposes of this section, the term “use” shall include the introduction, use, consumption, sale, acquisition, and transfer in Puerto Rico of the crude oil or oil products taxed in this section.
(d) The tax on all transactions and transfers of fuel taxed by this section shall be computed on the basis of a corrected temperature of 60 degrees Fahrenheit (60° F).
(e) The volume of fuel subject to the payment of excise taxes shall be the total of barrels dispatched from the tanks of the supplier to the tanks of the local importer, distributor or manufacturer, as the case may be, and as evidenced by the measurements taken and certified by the inspector authorized by the U.S. Customs and the Department of Consumer Affairs before and after the transfer.
(f) The excise tax shall be subject to an inflation adjustment plus a one point five percent (1.5%) annual margin. This adjustment shall be effective every four years beginning on July 1, 2013, based on the annual average change of the Consumer Price Index plus a one point five percent (1.5%) annual margin; the first adjustment shall be effective on July 1, 2017. Every inflation adjustment to be made every four years shall take into account: (1) the annual effect of the inflation adjustment plus the one point five percent (1.5%) annual margin combined annually for the four-year period; and (2) the adjusted amount in the preceding four-year period.
(g) For the purposes of this section, “Consumer Price Index” shall mean the United States City Averages for all Urban Consumers, All Items” published by the Bureau of Labor Statistics of the United States Department of Labor; Provided, however, That if the Bureau of Labor Statistics of the United States Department of Labor ceases to publish such index, “Consumer Price Index” for the purposes of this section shall be the index substituting or replacing it.
(h) The provisions of Chapter 1033 of this part shall not apply to this section, except for the provisions of §§ 31651 and 31652 of this title.
(i) Exemptions.— The tax imposed by this section shall not apply to:
(1) Crude oil, partially finished and finished oil by-products, or any other hydrocarbon blend (including natural gas) used to generate electricity by:
(A) The Electric Power Authority;
(B) any power plant only with relation to that portion of the natural gas used to generate electricity sold to the Electric Power Authority or any successor entity, or
(C) the Maritime Transport Authority, any successor thereof or any entity operating the maritime transport system serving the island-municipalities of Vieques and Culebra.
(2) Crude oil, partially finished and finished oil by-products, or any other hydrocarbon mixture exported from Puerto Rico.
(3) Crude oil, partially finished and finished oil by-products, or any other hydrocarbon mixture imported or sold locally to the agencies and instrumentalities of the federal government.
(4) Crude oil, partially finished and finished oil by-products, or any other hydrocarbon mixture used by local refineries or petrochemical companies in the oil refining process, whether for a shrinkage in the raw material used in production (plant loss) or in refinery fuel expenses. In the case of refineries that use crude oil, this exemption shall never exceed, individually or jointly, six percent (6%) of the verified total of the oil products used in the refining process. In the case of petrochemical companies, the exemption may exceed six percent (6%), but for that, the petitioner must submit evidence to the Secretary that justifies a greater exemption, and the Secretary shall determine the amount of the exemption by evaluating the evidence submitted and any other pertinent information.
(5) Crude oil, partially finished and finished oil by-products, or any other hydrocarbon mixture used in the manufacture of goods which, after finishing, cannot be identified as oil products taxable under this part. All persons covered by this exemption must have a prior acknowledgement and authorization of the Secretary.
(6) Crude oil, partially finished and finished oil by-products, or any hydrocarbons mixture used as lubricant or fuel in the propulsion of air and maritime transportation vehicles in their air and maritime travels between Puerto Rico and other places.
(7) Crude oil, partially finished and finished oil by-products, or any hydrocarbon mixture used as lubricant or fuel for the generation of vapor for the cooking, canning, and sterilization of raw material proceeding from industrial fishing.
(8) Crude oil, partially finished and finished oil by-products, or any hydrocarbon mixture used by vessels that provide towing service and/or fueling service to freight ships, cruise ships and/or other vessel that requires these services, be it within or outside territorial waters.
(j) The goods, including crude oil, partially finished and finished oil by-products, or any hydrocarbon mixture subject to the provisions of this section shall be exempt from the sale and use taxes established in §§ 32001 et seq. of this title.
(k) Time to pay.— The tax shall be paid pursuant to § 31741 of this title, except in the case of local manufacturers, which shall be paid pursuant to the provisions of § 31742 of this title.
(l) Refund for exemptions.— In the cases of refineries and petrochemical companies, the Secretary shall grant a credit or shall refund the excise taxes paid to the treasury if the exempt person proves, to the satisfaction of the Secretary, that he/she is entitled to enjoy one or more of the exemptions established in this section. In such cases, the credit or refund shall be limited to:
(1) The exempt person when he/she has paid the tax directly.
(2) The exempt person, upon prior consent by the person who paid the tax.
(3) The person who, after paying the tax, has not transferred it, in whole or in part, in the sale price billed to the exempt person.
(m) Amount of the bond.— The bond or endorsement to an existing bond, if any, shall be equal to the average of the taxes paid during thirty (30) days in favor of the Secretary to ensure the faithful compliance of the provisions of this section.
(n) The Secretary shall require that a monthly inventory be carried out under the FIFO (First-In First-Out) method in accordance with generally accepted accounting principles for transactions related to the payment of taxes, acceptance of credits, and allowable refunds, in accordance with the provisions of this section.
History —Jan. 31, 2011, No. 1, § 3020.07, retroactive to Jan. 1, 2011; June 25, 2013, No. 31, § 2; Jan. 15, 2015, No. 1, § 2.05; Mar. 13, 2015, No. 29, § 3; Sept. 30, 2015, No. 159, § 13.