2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 2 - Taxation In General (§§ 161 — 393) › Chapter 45 - Hospital Facilities Tax Exemption (§§ 371 — 378) › § 375 - Definitions

(a) Hospital unit.— As used in this chapter, the term “hospital unit” includes only those natural and juridical persons, or a combination thereof, that begin operations, or whose facilities are built, after the effective date of this act and shall mean:
(1) General, tuberculosis and mental disease hospitals or any other kind of hospital engaged in the treatment of diseases of human beings, as well as the facilities directly related to its normal operation.
(2) Extensions or expansions to the existing institution built within the premises of the hospital. In order for the extension or expansion to qualify, it shall be necessary for said extension or expansion to entail a substantial investment leading to the improvement of the medical-hospital services, and the same shall be notified to the Secretary of Health, who shall issue a certificate attesting to the fact that such extensions or expansions shall extend or modernize the hospital facilities and the medical services offered to the general community. Said Certificate shall be filed with the Department of the Treasury as a requirement to grant benefits under this chapter. In no case shall any hospital unit be considered as such if it operates without a license issued by the Department of Health.
(3) Nurse, resident and intern physician homes, when said units are located within the lands appertaining to the hospital.
(4) Clinics and convalescent homes for the sick.
(b) Net income derived from the rendering of medical-hospital services in a hospital unit.— Means:
(1) The gross income derived from, or related with, the rendering of medical-hospital services to the public in general, in the different facilities constituting said hospital unit deducted from such expenses, losses and any other deductions specifically assignable to said gross income and a proportional part of any other expenses, losses or deductions which cannot be specifically allocated to an item or any class of gross income. The proportional part shall be based on the proportion between the gross income derived from the aforesaid source and the total gross income.
(2) In the event of extensions or expansions constituting a hospital unit, the net income derived from the rendering of medical-hospital services in a hospital unit, to the effects of its tax exemption under this chapter, shall be the proportion between the services offered at the expansion and the total of services offered in said hospital facilities, including said extension, with respect to the total net income of the operations at the hospital facilities subject to the extension or expansion.
(c) Modernization.— Modernization includes alterations or major repairs, remodelings, substitutions and renewal of existing structures (including initial equipment) and substitution of obsolete equipment, without taking into consideration the date on which said hospital unit was constituted.
(d) Eligible payroll.— Shall be those expenses accrued or incurred in the payment of the payroll of the personnel rendering direct medical-hospital services. Payroll expenses of subcontracted personnel shall not be deemed part of the eligible payroll.
History —June 30, 1968, No. 168, p. 606, § 5; June 23, 1971, No. 76, p. 227, § 1; Mar. 3, 1995, No. 27, §§ 3, 4; July 20, 2005, No. 29, § 3; Jan. 20, 2006, No. 16, § 5; Nov. 17, 2015, No. 187, § 26; Dec. 28, 2016, No. 208, § 8.