2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 17 - Internal Revenue Code of 2011 (§§ 30001 — 33423) › PART VII - Administrative Provisions, Procedures, Interests, Penalties, and Additions to Taxes (§§ 33001 — 33423) › Chapter 1065 - Powers of the Secretary (§§ 33201 — 33244) › Subchapter C - Taxes on Alcoholic Beverages (§§ 33231 — 33234) › § 33231 - Powers of the Secretary

(a) Sections 32401 et seq. of this title shall be administered and enforced by the Secretary:
(1) The Secretary shall be in charge of inspecting distilleries, breweries, rectifying plants, factories, business establishments, and bonded warehouses subject to taxation and license fees, as provided under §§ 32401 et seq. of this title, as well as assessing, collecting, liquidating, and reporting such taxes and fees; and apprehending, arresting, and prosecuting persons who are unlawfully distilling, manufacturing, importing, introducing, shipping, exporting, selling, holding in possession, or transporting products subject to the provisions of §§ 32401 et seq. of this title.
(2) The Secretary shall delegate the enforcement of §§ 32401 et seq. of this title to the Alcoholic Beverage and Licensing Bureau of the Department of the Treasury.
(3) The Secretary is hereby empowered to appoint agents, officers, officials, and employees as he/she deems necessary for the enforcement thereof.
(b) Rules and regulations.— The Secretary is hereby authorized to approve such rules and regulations as necessary to render §§ 32401 et seq. of this title effective, and such regulations, once they have been promulgated, shall have force of law.
(c) Authorization of public and private bonded warehouses.— The Secretary shall allow, at his/her discretion, the establishment of public or private bonded warehouses.
(d) Administration of federal regulations.— The Secretary shall administer federal regulations concerning distillation, rectification, bottling or canning, and shipping of distilled spirits and alcoholic beverages bound for the United States. For such purpose, he/she shall enter into agreements with the United States Commissioner of Internal Revenue or with any other competent Federal official.
(e) Regulations on alcoholic beverage bottling.— The Secretary shall regulate the bottling of alcoholic beverages and their traffic. He/she shall also determine the size and kind of receptacles and containers for taxable products under §§ 32401 et seq. of this title, that are stored in rectifying plants, warehouses, and factories, to be subsequently removed, transported, transferred, or shipped. The Secretary shall also require such markings, labels, and numbers as he/she may provide to be affixed to such receptacles or containers, as well as the way in which such markings, labels, and numbers are to be effaced and destroyed.
(f) Alterations to industrial plant buildings and equipment.— The Secretary may require that any person engaged in the business of distilling, rectifying, bottling or canning, manufacturing, transporting, or selling any taxable product under the provisions of §§ 32401 et seq. of this title, make any such alterations in the buildings, stills, utensils, cauldrons, piping, containers, and devices in general as may be necessary to properly protect the Government of Puerto Rico against fraud. He/she may also require that such persons install devices to measure and weigh, tanks, and containers for the finished product subject to taxation, and any other devices and equipment as necessary.
(g) Regulation of production, import, and distribution of distilled spirits and alcoholic beverages.— The Secretary shall be empowered to regulate the production, manufacture, export, and shipping outside Puerto Rico, as well as the import, introduction, sale, transportation, and use of distilled spirits and alcoholic beverages intended for human consumption. He/she shall also regulate distilled spirits for industrial, scientific, medicinal, and chemical purposes, as well as the denaturation of spirits and the use thereof. He/she shall furthermore be empowered to require that any person who disposes of molasses or cane sugar or any other substance with the characteristics of those substances commonly used in manufacturing distilled spirits, render a report on the disposal of such substances, in such way and manner as said official shall establish.
(h) Power to enter distilleries, plants, factories, and business establishments.— The Secretary is hereby empowered to enter any distillery, factory, plant, business establishment, or warehouse to conduct any pertinent investigations, subject to the provisions of §§ 32401 et seq. of this title.
(i) Gauging of distilled spirits.— The Secretary may gauge distilled spirits and alcoholic beverages in order to assess taxes as established under §§ 32401 et seq. of this title, and to determine the productive capacity of any mixture, must, filtering, or ferment that has been used or is to be used to produce distilled spirits. He/she shall also establish the procedure to inspect, weigh, mark, and gauge such spirits and alcoholic beverages.
(j) Oversight by the Secretary.— The Secretary may oversee the distillation and rectification of distilled spirits and the manufacture, bottling or canning, import, introduction, export, and shipping of distilled spirits and alcoholic beverages.
(k) Methods for chemical analyses.— In order to determine whether a spirit or an alcoholic beverage meets the requirements established under §§ 32401 et seq. of this title or such regulations as the Secretary shall promulgate, the official analysis methods of the Association of Official Agricultural Chemists, or any other method that is appropriate for such purposes and acceptable to the Secretary, shall be used.
(l) Provision on federal taxes collected on Puerto Rican rum shipped to the United States.—
(1) The Secretary is hereby directed to set aside, in a Special Account, up to twenty-five percent (25%) of the amounts that the Government of the United States covers over to the Treasury of the Government of Puerto Rico on account of the tax on rum bottled in Puerto Rico or shipped in bulk from Puerto Rico to the United States and sold to consumers in the United States. The Governor of Puerto Rico, upon recommendation from the Secretary and the Government Development Bank for Puerto Rico, may increase such cap up to forty-six percent (46%) through Executive Order to such effect, after December 31, 2011, whenever such increase is necessary or convenient to enable rum producers in Puerto Rico to compete in the foreign market on equal terms with their competitors in other United States jurisdictions. Notwithstanding the foregoing, the Treasury of the Commonwealth of Puerto Rico may never withhold an amount that is less than fifty-four percent (54%) of the amounts covered over by the United States Government on account of the tax on rum bottled in Puerto Rico and sold in the United States or shipped in bulk from Puerto Rico to the United States and sold to consumers in the United States. It is further provided, that on an annual recurring basis, beginning Fiscal Year 2015-2016, inclusive, the Secretary shall transfer two point five percent (2.5%) of the total amount that the Government of the United States covers over to the Treasury of the Government of Puerto Rico on account of the excise tax on rum bottled in Puerto Rico or shipped in bulk from Puerto Rico to the United States and sold to consumers in the United States, to the Industrial Development Company up to a maximum of ten million dollars ($10,000,000) a year. Said appropriation shall be used to defray the operating expenses of the Rums of Puerto Rico Program, including among others, the promotion of local rum industries, in addition to the development of the sugarcane industry. In July of each year, the Executive Director of the Industrial Development Company shall certify to the Department the surplus of the transfers received in accordance with this subsection during previous fiscal years, if any. The annual appropriation provided herein for the Industrial Development Company need not be remitted to the Secretary during any fiscal year in which the Executive Director of the Industrial Development Company certifies to the Department that there is a surplus of these appropriations of at least fifty million dollars ($50,000,000). The appropriations provided for herein shall resume only for such fiscal years in which the Executive Director of the Industrial Development Company certifies to the Department that the surplus, once the appropriated funds hereunder are used, is below fifty million dollars ($50,000,000), but only in the amount that is necessary for the certified amount to reach fifty million dollars ($50,000,000), up to a maximum of ten million dollars ($10,000,000) annually. The amount herein appropriated to the Industrial Development Company shall not impair the provisions relating to the amount to be set aside in a Special Account pursuant to this subsection for rum producers.
(2) The amounts set aside from such rebates, as provided herein, shall be made available in the Commonwealth Treasury to incentivize the production and promotion of Puerto Rican rum, including, but not limited to the promotion and marketing of Puerto Rican rum in the market abroad, to invest in agricultural, industrial, or business infrastructure projects necessary for the development of the Puerto Rican rum industry, to support local rum industry participants by granting production incentives, marketing and promotion incentives, and incentives to build and improve their infrastructure, including incentives for the subsidiaries and/or affiliates of such participants to be used for the benefit of the local industry, in order to increase the amount of funds that the Commonwealth of Puerto Rico shall appropriate annually for such purposes. Provided, that the authorization to disburse such funds shall be approved by the Governor or the official onto whom he/she delegates by means of the corresponding order of payment and an executive budget. Provided, further, That quarterly advances may be made of the amounts that are to be set aside from estimate revenues on account of such rebates. At the close of the fiscal year, the Secretary shall make a final liquidation of the amount corresponding to such executive budget, taking as basis the actual revenues and the advances made during the fiscal year, and shall deposit the remainder, if any, into the special account, and any unencumbered surplus into the General Fund. When advances exceed actual revenues, the remainder shall be withheld from the amounts to be set aside in the following fiscal year.
(3) No levy, municipal license tax, excise tax, or any other charge established under the laws of the Commonwealth of Puerto Rico shall be applied to the incentives granted under clause (2) of this subsection.
(4) The Government Development Bank for Puerto Rico, the Department of the Treasury of Puerto Rico, the Department of Economic Development and Commerce, the Puerto Rico Industrial Development Company, and the Department of Agriculture are hereby empowered to conduct any such actions, appearances, transactions, and/or to execute any such instruments and documents, whether public or private, as convenient and necessary to implement the purposes described in this subsection.
(5) The Governor of Puerto Rico, through an Executive Order to such effect, may designate the agencies and instrumentalities of the Government of Puerto Rico, in addition to those already designated in clause (4) of this subsection, as he/she may deem necessary to implement the purposes, programs, and activities contemplated under this subsection.
(6) The Government Development Bank for Puerto Rico, and any of its subsidiaries and affiliates, are hereby empowered to incur obligations and/or issue bonds, in order to finance the implementation of the purposes, programs, and activities contemplated in this subsection and to pledge the funds set apart under this subsection to secure payment of the principal and interest concerning such obligations and/or bonds. Such funds set aside may be used to pay interest and to amortize the obligations and/or bonds authorized hereunder.
(m) Filing and paying taxes electronically.— The Secretary is hereby authorized to allow or require, through such rules as he/she shall establish by a circular letter or regulations, that any statements or forms required under §§ 32401 et seq. of this title, as well as the payment of taxes on alcoholic beverages and the license fees established under said sections, be filed or made electronically. In such cases, the taxpayer’s digital signature or electronic authentication mechanism shall be accepted as valid for all purposes as provided in this Code.
History —Jan. 31, 2011, No. 1, § 6053.01, retroactive to Jan. 1, 2011; Dec. 10, 2011, No. 232, § 177; Dec. 16, 2011, No. 248, § 2; July 23, 2014, No. 108, § 1.