2023 Laws of Puerto Rico › TITLE TWENTY-THREE - Public Planning and Development (§§ 1 — 11273) › PART VI - Tourism (§§ 6001 — 6982i) › Chapter 151A - Puerto Rico Tourism Development Act of 2010 (§§ 6339 — 6355) › § 6342 - Exemptions

(a) Kinds of exemptions.— All exempt businesses are hereby exempted from the payment of taxes and levies mentioned in clauses (1) through (5) of this subsection:
(1) Income tax exemption.—
(A) Exemption and rates.— Tourism development income, as well as the dividends or profits distributed by the exempt business to its stockholders, partners, or members, and the distributions of such income made in liquidation, shall be exempt from income taxes pursuant to the following terms and conditions:
(i) For all tourist activities not established in Vieques or Culebra, the exemption percentage on said income shall be of up to ninety percent (90%).
(ii) For all tourist activities established in Vieques and Culebra, the exemption percentage on said income shall be of up to one hundred percent (100%).
(iii) The exemption shall be in effect for a period of ten (10) years and shall begin to govern on the date specified in subsection (b) of this section.
(B) Stockholder, partner, or member of an exempt business.— Distributions of tourist development income by an exempt business, including special partnerships, before the expiration of their grant, to its stockholders, partners, or members, regardless of whether these are corporations, partnerships, or limited liability companies that are or were, in turn, exempt businesses, shall be subject to the income taxes (if any are applicable) only once, which shall be at the time in which the exempt business that generated such tourist development income distributes such income to its stockholders, partners, or shareholders. For purposes of this subsection, the holding of shares in the income of a special partnership attributable to its partners shall not be deemed to be tourist development income. The treatment of tourist development income distributions carried out by an exempt business that is a special partnership shall be governed by the provisions of the Code.
(i) Such distributions shall retain their tourism development income status along with its respective characteristics. Subsequent distributions that have been subject to taxation, made by any corporation or partnership, shall be exempted from any additional taxes.
(ii) In the case of exempt businesses organized as partnerships, joint ventures, or similar entities, composed of various organizations, partnerships, or a combination thereof, the components of such exempt businesses shall be deemed to be businesses that are or were exempted, and therefore, the only tourist development income distributions subject to taxation shall be those made by said components of such exempt businesses.
(iii) The profits made from the sale, exchange, or other disposal of corporate stock, partnership or limited liability company shares, joint venture shares, or, substantially, all assets of such corporations, partnerships, or limited liability companies, or joint ventures that are or have been exempt businesses, and corporate stock or partnership, limited liability companies, or joint venture shares that are in any way the owners of the aforesaid entities, shall be subject to the provisions of subsection (a)(1)(C) of this section if such sale, exchange or other disposal is conducted, and any subsequent distribution of such profits, be it as dividends or a distribution in liquidation, shall be exempted from any additional taxes.
(C) Sale or exchange.— If the sale or exchange of stock or shares in partnerships or limited liability companies, shares in joint ventures, or substantially, all assets devoted to a tourist activity of an exempt business is carried out, and such property continues to be devoted to a tourist activity after such sale for a period of at least twenty-four (24) months:
(i) During the exemption period, the profit or loss resulting from such sale or exchange, which shall be recognized in the same proportion as tourist development income of the exempt business, shall be subject to the payment of income taxes; the basis of such stock, shares or assets involved in the sale or exchange shall be determined, for purposes of establishing profits or losses, pursuant to the applicable provisions of the Code in effect on the date of the sale or exchange.
(ii) After the expiration date of the exemption, only the profits or losses resulting from the sale or exchange of stock or shares shall be recognized in the manner provided in subparagraph (i) of this paragraph, but only up to the total value of the stock or shares on the books of the corporation, partnership, or limited liability company on the expiration date of the exemption (minus the sum of any exempt distribution received over such stock after said date), minus the basis of such stock. The remainder, if any, of the profits or losses shall be recognized pursuant to the provisions of Subtitle A of the Code. The profits or losses in the sale or exchange of assets shall be recognized pursuant to the provisions of Subtitle A of the Code.
The requirement of having the property continue to be devoted to a tourist activity for a period of at least twenty-four (24) months shall not apply in those cases in which the sale or exchange involves stock or shares of an investor other than a developer or anyone who exerts any kind of control over the exempt business.
(D) Flexible tax exemption.— Exempt businesses shall be entitled to choose that their tourist development income for a specific taxable year not be covered by the tax exemption provided in this clause, by attaching a notice to that effect to their tax income tax return for such taxable year filed on or before the date provided by the Code to file such return, including any time extension granted by the Secretary for the filing thereof. The exercise of this right by means of such notice shall be irrevocable and binding for the exempt business; Provided That the total number of years that an exempt business may enjoy the exemption shall not exceed ten (10) years.
(E) Additional exemptions.— Tourist development income shall not be subject to the following income taxes:
(i) Alternative minimum taxes under Section 1017 of the Code;
(ii) the additional tax on corporations and partnerships under Section 1102 of the Code, and
(iii) the alternate basic tax for individuals under Section 1011(b) of the Code or any similar succeeding law.
(F) Tax rate.—
(i) Applicable tax rate.— Except when provided otherwise in this chapter, the tax rate applicable to any exempt business shall be that which is in effect at the time of approval of this act.
(ii) Royalties or proprietary rights.—
(I) Taxes on and withholding of royalties paid by an exempt business to corporations, partnerships, or limited liability companies or other foreign persons not engaged in trade or business in Puerto Rico.—
a. There shall be imposed, charged, and paid for each taxable year, in lieu of the tax imposed under the Puerto Rico Internal Revenue Code or any similar or succeeding law, on the total amount received as royalties or proprietary rights for the use in Puerto Rico of any intangible property related to the activity exempt under this chapter, by all foreign corporations, foreign partnerships, or persons not engaged in trade or business in Puerto Rico, originating exclusively from sources within Puerto Rico, a tax of twelve percent (12%).
b. All exempt businesses required to pay royalty or proprietary rights to foreign corporations, foreign partnerships, or persons not engaged in trade or business in Puerto Rico for the use in Puerto Rico of intangible property related to the activity exempt under this chapter, shall deduct and withhold at the source a tax equal to that which is imposed in subitem a. of this item.
(II) Any person described below shall pay taxes of two point nine percent (2.9%) on payments received as royalties or proprietary rights for the use in Puerto Rico of any intangible property related to the activity exempt under this chapter and which originate from sources within Puerto Rico, in lieu of that which is provided in item (I) of this subparagraph.
a. Any corporation, partnership, limited liability company, or other foreign person not engaged in trade or business in Puerto Rico who directly holds fifty percent (50%) or more of the value of stock or shares in the exempt business.
b. Any corporation, partnership, limited liability company, or other foreign person not engaged in trade or business in Puerto Rico who directly or indirectly owns eighty percent (80%) or more of any corporation, partnership, or person described in subitem a. of this item.
c. Any foreign corporation, foreign partnership, or person not engaged in trade or business in Puerto Rico directly or indirectly held by eighty percent (80%) or more by a corporation, partnership, or person described in subitem (a) or (b) of this item.
(III) The corresponding tax shall be withheld at the source by an exempt business that makes royalty or proprietary right payments for the use in Puerto Rico of any intangible property related to the activity exempt under this chapter and which originate from sources within Puerto Rico to the persons described in subitems a., b., or c. of item (II) of this subparagraph.
(G) Exemption for individuals, estates, corporations, partnerships, limited liability companies, and trusts with respect to interest paid or credited on bonuses, notes, or other obligations of certain exempt businesses.—
(i) Exemption.— Any individual, estate, corporation, partnership, limited liability company, or trust shall be exempt from payment of any tax imposed under the Code and any license fees imposed under the Municipal License Fees Act of 1974, §§ 651-651y of Title 21, on income from interest, charges, and other credits received with respect to bonuses, notes, or other obligations of an exempt business for the development, construction, or rehabilitation of or improvements to an exempt business under this chapter, provided that the funds shall be entirely used in the development, construction, or rehabilitation of or improvements to a exempt business and/or the payment of existing debts of said exempt business, insofar as the funds from these existing debts have been originally used in the development, construction, or rehabilitation or improvements to said exempt business. The expenses incurred by any person who makes an investment as described above shall not be subject to the provisions of Section 1024(a)(5), 1024(a)(11), and 1024(f) of the Code in relation to such investment and the income derived therefrom.
(ii) The proceeds of the bonus, note, or other obligation must be granted directly to an exempt business covered under the Puerto Rico Tourist Development Act of 1993 or this chapter.
(H) Deduction and carry-over of net losses.—
(i) If an exempt business incurs a net loss not originating from the operation of a tourist activity, such loss shall be deductible and may be used only against income other than tourist development income and shall be governed by the provisions of the Code.
(ii) If an exempt business incurs a net loss in the conduct of a tourist activity, such loss may be deducted up to an amount equal to the percentage of its tourist development income that would have been taxable.
(iii) A deduction on carry-overs of losses incurred in previous years shall be granted as provided below:
(I) The excess of losses deductible under subparagraph (ii) of this paragraph may be carried over against the deductible portion of the tourist development income pursuant and subject to the limitations provided in said clause. The losses shall be carried over in the order they were incurred.
(II) Any net loss incurred in a year in which the election under paragraph (D) of this clause is in effect may be carried over only against tourist development income generated by the exempt business in a year in which the election under paragraph (D) of this clause was made. Losses shall be carried over in the order they were incurred.
(iv) None of the provisions herein shall limit in any way the right under the Code of partners of a special partnership to claim a deduction on their distributable share of the loss incurred by the special partnership against income from other sources subject to the limitations of the Code.
(I) Basis or adjusted basis.— For purposes of this chapter, except for § 6343(e) of this title any reference to the term “basis” or the phrase “adjusted basis” shall require the computation of the same as established in Section 1114 or 1347 of Subtitle A of the Code, prior to the adjustments directed under this chapter.
(2) Exemption with respect to municipal and state taxes on real and personal property.— Any property devoted to a tourist activity shall enjoy up to a ninety percent (90%) exemption on all municipal and state taxes on real and personal property for a period of ten (10) years, computed from the date prescribed under subsection (b) of this section.
In case of personal property consisting of equipment and furniture to be used in a lodging facility, except for any commercial unit, and in cases of special timeshare rights, vacation club property rights or lodging, as said terms are defined in §§ 1251 et seq. of Title 31, of a timeshare or vacation club duly licensed by the Company under the provisions of said sections, the personal and/or real property shall enjoy the exemption provided in this clause, regardless of who is the owner of the equipment, furniture and/or real property devoted to a tourist activity. Said exemption shall be effective as long as the exemption grant on the timeshare or vacation club plan is in effect. The Director shall determine by regulation the procedure to claim the aforesaid exemption.
The stock in a corporation or the shares in a partnership or a limited liability company that enjoys an exemption grant under this chapter shall not be subject to the payment of property taxes under the Property Tax Act of 1991, §§ 5001 et seq. of Title 21 as amended, or any analogous succeeding law.
Real and/or personal property taxes shall be assessed, imposed, notified, and administered pursuant to the provisions of the Property Tax Act in effect on the date such tax is assed and imposed.
(3) Exemption related to license fees, excise taxes, and other municipal taxes.— A new business that is an exempt business shall not be subject to the payment of license fees, excise taxes, and other municipal taxes on its tourist development income, transactions, events, or on use, imposed by any ordinance of any municipality, as of the date prescribed pursuant to subsection (b) of this section. An existing business that is an exempt business shall enjoy up to a ninety percent (90%) exemption on license fees, excise taxes, and other municipal taxes on its tourist development income, transactions, events, or on use, imposed by any ordinance of any municipality as of the date prescribed pursuant to subsection (b) of this Section. The exemption shall be effective for a period of ten (10) years and shall begin on the date specified in subsection (b) of this section.
Except for the provisions of the Municipal License Fees Act of 1974, §§ 651 et seq. of Title 21, no municipality may impose taxes, fees, licenses, excise taxes, or any other kind of charge based on or related to the stay of a person as a guest in an exempt business.
(4) Exemption related to taxes on use and consumption items.—
(A) In general.— Exempt businesses shall enjoy up to a one hundred percent (100%) exemption from the payment of the taxes imposed under Subtitles B and BB of the Code with respect to those items acquired and used by an exempt business in relation to a tourist activity. The exemption shall be in effect for a period of ten (10) years and shall begin on the date specified in subsection (b) of this section.
In cases of personal property consisting of equipment and furniture to be used in a lodging facility, except for any commercial unit as said terms are defined in §§ 1251 et seq. of Title 31, of a timeshare or vacation club duly licensed by the Company under the provisions of said sections. Personal property shall enjoy the exemption provided in this clause, regardless of who is the owner of the equipment or furniture. Said exemption shall be effective as long as the exemption grant on the timeshare or vacation club plan is in effect. The Director shall determine by regulation the procedure to claim the aforesaid exemption.
(B) The exemption provided in this clause includes items acquired by a contractor or subcontractor, to be used solely and exclusively by an exempt business in construction works related to a tourist activity of said exempt business.
(C) Exclusions.— The exemption granted under this clause shall not apply to items or other property of such a nature that they are part of the inventory proper of the exempt business under Section 1022(c) of Subtitle A of the Code, and which represent property mainly held for sale in the regular conduct of the trade or business; nor shall such exemption apply to the tax on hotel room occupancy imposed under §§ 2271 et seq. of Title 13, known as the “Room Occupancy Rate Tax Act”.
(D) Taxes paid on items sold for use in a tourist activity.— The Secretary shall grant a credit or refund on any tax paid on the sale or on the introduction of items sold to exempt businesses for use in connection with a tourist activity in the manner and with the limitations prescribed in the Code.
(5) Exemption related to municipal excise taxes on construction.—
(A) In general.— All exempt businesses and their contractors or subcontractors shall enjoy up to a one hundred percent (100%) exemption on any tax, levy, fee, license, excise tax, rate, or charge for the construction of works to be devoted to a tourist activity within a municipality, imposed by any ordinance of any municipality, as of the date prescribed pursuant to subsection (b) of this section. The exemption shall be effective for a period of ten (10) years and shall begin on the date specified in subsection (b) of this section.
Only for purposes of this exemption, any person in charge of carrying out administrative duties and the physical and intellectual work inherent to the construction of a work to be devoted by an exempt business to a tourist activity, and any middleman or chain of middlemen between such person and the exempt business shall be deemed to be a contractor or subcontractor of the exempt business.
(B) Condo hotels.— In cases of condo hotels, and only for purposes of this exemption, any person in charge of carrying out administrative duties and physical and intellectual work inherent to the construction of a condo hotel, and any middleman between such person and the owner of a condo hotel unit, including the developer of the condo hotel him/herself, when he/she has contracted another for the construction of the condo hotel, shall be deemed to be contractors of an exempt business in terms of each condo hotel unit that meets all the requirements to enjoy the benefits available by law, including, but not limited to, the requirement of devoting the same to an integrated leasing program for at least nine (9) months of the year.
(C) Amount to be taken as exemption in the case of condo hotels.— The amount to be taken as an exemption in the case of a condo hotel pursuant to this paragraph shall be divided and assigned regarding every unit of the condo hotel according to the proportion of the interest of each unit regarding the common elements of the regime, when all of the units of the condo hotel are devoted to a single horizontal property or another regime under the Puerto Rico Condo Hotel Act, §§ 1295 et seq. of Title 31, or by using any prorating method acceptable to the Director when the units are devoted to more than one horizontal property regime.
(D) Administration of the exemption.— Any dispute regarding the imposition of any tax, levy, fee, license, excise tax, or rate on the construction of works to be devoted to a tourist activity shall be heard by following such procedures as the municipality may establish for such purposes. Likewise, any dispute in terms of the applicability of the aforesaid exemption, including the mechanism to determine the applicable exemption in the case of condo hotels shall be heard before the Puerto Rico Tourism Company by following such procedures as the Director may establish for such purposes pursuant to this chapter and the Uniform Administrative Procedures Act of the Commonwealth of Puerto Rico, §§ 2101 et seq. of Title 3.
(E) Exception.— In the case of condo hotels, it is hereby established as an exception to the condition requiring that, in order to enjoy the exemption of municipal excise taxes on construction, each condo hotel unit must be devoted to an integrated leasing program for ten (10) consecutive years, and nine (9) months a year. In those cases in which the use of the condo hotel project changes and the condo hotel units changes, these are discharged from the integrated leasing program before the term required under this chapter, to such effect, insofar as the unit that is an exempt business under this chapter is immediately devoted to another tourist activity that is an exempt business under this chapter, for not less than the remaining time from the ten (10) year period under the integrated leasing program. If this condition is not met, the subsequent acquirer of the unit shall be liable for any amount that must be recovered subsequently on account of this tax collected in excess, it being understood that no recovery shall be in order for the years in which the unit belonged to an integrated leasing program and another tourist activity that is an exempt business under this chapter.
The exemption shall be taken in whole for the year in which it is required to meet the tax liability for the construction. However, it shall be understood that taxpayers shall be entitled to take as an exemption a one hundred- twentieth part of the amount available as assigned prorated exemption in relation to each unit during each consecutive month in which said units are devoted from the time of their construction to an integrated leasing program; provided, that the exemption taken at the time of the construction and development of the condo hotel shall be equal to the total amount of exemption, which would be finally obtained on that account in the event that all units of the condo hotel are devoted to an integrated leasing program for at least nine (9) months for each of the first ten (10) years, equal to one hundred twenty (120) months as of the construction of each unit.
Each year, there shall be a reduction of the amount taken by virtue of the exemption that applies in connection with such units:
(i) Acquired during said year from the entity that developed or built them and which have never been used prior to said acquisition for any purpose whatsoever and which are not devoted by the acquirer to an integrated leasing program, within the limit provided by the Director during which said units must be devoted to such a purpose so that they enjoy the benefits of this chapter; or
(ii) that during said particular year, they have not met, for the first time, the requirement of being devoted to an integrated leasing program for at least nine (9) months during said year.
The equivalent of that reduction in the amount taken on account of the exemption may be recovered annually by the municipality from the taxpayers. The amount to be recovered annually shall be computed as follows:
First.— There shall be taken for each unit that during said year and that, for the first time, did not meet the requirement of being devoted at least nine (9) months to an integrated leasing program, the total portion of the exemption assigned pursuant to this paragraph, and the same shall be multiplied by a fraction whose numerator shall be equal to the subtraction of one hundred twenty (120) minus the number of consecutive months during which said unit met the requirement of being devoted at least nine (9) months each year to an integrated leasing program, and whose denominator shall be one hundred twenty (120).
Second.— The results obtained from the corresponding equations for each unit described in the preceding sentence shall be added, and the final result thereof shall be the total amount of the exemption taken in excess and subject to recovery for said year. Under no circumstance shall any charges, surcharges, penalties, interest, or any other kind of additional fee be imposed or charged regarding any tax, levy, fee, license, excise tax, rate or duty, whose amount is required pursuant to the provisions of this paragraph for reasons arising before or at the time it was determined said exemption is not in order, in whole or in part.
When computing the number of months said unit was devoted for at least nine (9) months each year to an integrated leasing program, the fractions of the months shall be rounded up to the preceding month.
As a condition of the aforesaid exemption, any municipality, with the previous consent of the Director, may require from any taxpayer regarding the tax, levy, fee, license, excise tax, rate or duty on the construction of a condo hotel, or from those persons who have a proprietary interest on said taxpayers, be they entities of any type, a security or bond to ensure the payment of any amount indebted as a tax pursuant to this subparagraph.
The operator of the integrated leasing program of a condo hotel shall submit an annual report to the director of finances of the municipality or municipalities where the condo hotel is located, should said municipality or municipalities impose any tax, levy, fee, license, excise tax, rate or duty on the construction of said condo hotel. Said report shall indicate the dates on which participating units began to participate in the program, as well as the date or dates on which one or more units withdrew from the program.
For purposes of this paragraph, should an investor in a condo hotel fail to meet any requirement established in the grant conferred for such a purpose should the same be revoked for any reason, it shall be deemed that said investor failed to devote the condo hotel unit(s) covered under said grant to an integrated leasing program. The Director shall notify the director of finances of the corresponding municipality, in case an investor has failed to meet any requirement established in his/her grant or if such grant has been revoked.
(6) Special rule; municipal license fees; determination of business volume.— Contractors or subcontractors who perform works for an exempt business shall determine their business volume for purposes of municipal license fees, by discounting the payments that they are required to make to subcontractors under the primary contract with the exempt business. Subcontractors who, in turn, use other subcontractors within the same project shall also discount such payments when determining their business volume.
A contractor or subcontractor may discount the payments described in the above paragraph from their corresponding business volumes, only if such contractor or subcontractor certifies to the Director that he/she did not include in the contract executed for the works to be performed or the services to be rendered in relation to the exempt business, an item equal to the municipal license fee resulting from the business volume discounted pursuant to this clause. Any contractor or subcontractor that performs works for an exempt business shall file a copy of any contract related to such works within ten (10) calendar days from its execution with the municipality or municipalities where such works are to be performed, and they shall provide the name, street and mailing address, and employer identification number of all subcontractors. The Director shall provide by regulation:
(A) The requirements and procedures to determine whether the executed contract complies with the provisions of this clause, including the filing of a copy of such contract with the corresponding municipality or municipalities, and
(B) the penalties for noncompliance with the provisions of this clause.
(7) Program of income distribution among condo hotel unit owners and the operator of an integrated leasing program for such condo hotel.— Individual leasing agreements between condo hotel unit owners and the entity engaged in the operation, pursuant to this chapter, of the integrated leasing program for such condo hotel, which contain similar terms and conditions, and whose contractors have received a grant pursuant to this chapter at the time of entering into such agreements, or which after such agreements, receive a grant pursuant to this chapter effective retroactively, be it at the time or prior to entering into such agreements, even if such grants are revoked subsequently for any reason. By virtue of such agreements, such contractors and the operator accept a lease based on a formula contained in such agreements taking into consideration the gross income derived from the lease of all units in the leasing program, the expenses attributable to such income, and the costs incurred in all units, shall be deemed not to have the effect of constituting between such contractors a partnership or any other kind of legal entity constituted by the contracting parties; and that each contractor continues to be the owner of his/her respective unit. To such effect, it shall also be deemed that:
(A) For income tax purposes, the gross income share attributed to each one of the contractors shall be deemed received by each directly from the condo hotel guest and not from a partnership or any other kind of legal entity constituted by them; and that, likewise, the corresponding related expenses attributed in the same manner shall be incurred directly by each contractor and not by a partnership or any other kind of legal entity constituted by them; Provided, That each contractor that is an investor shall enjoy the income tax exemption provided in this section with respect to his/her distributed net income, whereas those who do not enjoy such exemption shall pay taxes at their applicable tax rate under the Code.
(B) For municipal license fee purposes, the gross income share attributed to each contractor pursuant to the distribution formula accorded in such agreements shall be their business volume to be reported in their annual statement submitted to the corresponding municipality, and that such business volume received by each contractor that is an investor directly from the condo hotel guest and not from a partnership or any other kind of legal entity constituted by them; provided, that each investor shall enjoy the municipal license fee exemption provided in this section, with respect to their generated gross income, as per such distribution formula, whereas those who do not enjoy such exemption shall pay taxes at their applicable tax rate under the Municipal License Fee Act, §§ 651 et seq. of Title 21; and
(C) For real and personal property tax purposes, condo hotel unit ownership shall be held by such contractors that have invested in condo hotel units, and not by a partnership or any other kind of legal entity constituted by the agreement between them, and that the real and personal property tax shall be imposed with respect to each investor; Provided, That each contractor that is an investor shall enjoy the real and personal property tax exemption provided in this section, with respect to his/her real and personal properties used in a condo hotel, whereas those who do not enjoy such exemption shall pay taxes at their applicable tax rate under any municipal or state tax law or real and personal property tax law.
(8) Exemption related to the room occupancy rate.— Any amount received by an exempt business for the sale, exchange, transfer, or any other disposition of special timeshare, vacation club and/or lodging rights as said terms are defined in §§ 1251 et seq. of Title 31, of a timeshare or vacation club duly licensed by the Company under the provisions of said Act shall be exempt from payment of the room occupancy rate imposed under §§ 2271 et seq. of Title 13, or any other substitute law.
(b) Beginning of the exemption.—
(1) The exemptions provided in subsection (a) of this section shall begin:
(A) With respect to taxes on tourist development income of an exempt business, from the date its tourist activity starts, but never before the due filing date of having duly filed an application to avail itself of the benefits of this chapter.
(B) With respect to taxes on real and personal property devoted to a tourist activity of an existing business that is an exempt business, from January 1st of the calendar year during which an application to avail itself of the benefits of this chapter has been duly filed with the Director, or in relation to a new business that is an exempt business, from January 1st of the calendar year in which said business begins its tourist activity.
(C) With respect to license fees, excise taxes, and other municipal taxes, from January 1st or July 1st, whichever is nearest, after the due filing date of having duly filed an application to avail itself of the benefits of this chapter.
(D) With respect to the taxes imposed under Subtitles B and BB of the Code, thirty (30) days after having duly filed an application to avail itself of the benefits of this chapter, insofar as a bond is posted pursuant to the applicable provisions of the Code, prior to the date chosen to start this exemption, and if the aforementioned application has not been denied. If the application for exemption is denied, the taxes mentioned in this paragraph shall be paid within sixty (60) days from the date of notice of the denial.
(E) With respect to municipal excise taxes on construction, from the date of filing an application to avail itself of the benefits of this chapter; Provided, That in the case of condo hotels, contractors and subcontractors shall begin to enjoy the exemption from the time the developer files the master grant application in which he/she describes the nature of the project in addition to meeting such additional requirements as the Director may establish for such purposes.
(2) An exempt business shall have the option to postpone each of the starting dates referred to in clause (1) of this subsection by notifying the Director and the Secretary to that effect.
Such notices shall be filed on or before the date prescribed by regulation promulgated to such effect. Starting dates may not be postponed for a period greater than thirty-six (36) months following the date established in clause (1) of this subsection. The Director shall issue an order prescribing the start dates of the exemption periods under this chapter, according to the application of the exempt business and pursuant to the regulations promulgated for these purposes.
(3) The exemption percentage applicable to each licensee, as well as the conditions under which the grant shall be executed, shall be determined pursuant to the provisions on such matter contained in the regulation to be promulgated under this chapter.
(c) Limitations.— None of the provisions contained in subsection (b) of this section shall confer the right to a refund for duly assessed, imposed, and collected taxes prior to the dates mentioned in subsection (b).
History —July 10, 2010, No. 74, § 3.