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) › § 31627a - Excise tax on crude oil, partially finished and finished oil by-products, and any other hydrocarbon blend devoted to the Infrastructure Financing Authority

(a)
(1) In addition to the excise tax prescribed in § 31627 of this title for the use in Puerto Rico of crude oil, partially finished and finished oil by-products, and any other hydrocarbon blend, an additional 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 blend, of six dollars and twenty-five cents ($6.25) per Barrel or fraction thereof.
(2) The excise tax provided in clause (1) of this subsection shall be increased by three dollars and twenty five cents ($3.25), that is, from six dollars and twenty-five cents ($6.25) to nine dollars and fifty cents ($9.50) per barrel or fraction thereof, on the effective date of the Transfer (as such term is defined in § 2012a of Title 9), but never before March 15, 2015.
(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 provisions of Chapter 1033 of this part shall not apply to this section, except for the provisions of §§ 31651 and 31652 of this title.
(g) Adjustment.— On or before March 31 st of each year, the Secretary of the Treasury shall determine and certify the amount collected during the calendar year immediately preceding on account of the excise tax imposed under this section. The Secretary of the Treasury shall determine and certify the proportion existing between three hundred twenty-five million dollars ($325,000,000) and the amount collected, and shall multiply the excise tax rate in effect as of March 1 st of the year in which the determination is made by said proportion. The new rate resulting from such arithmetic operation (which may be higher or lower than the rate in effect at the time of the determination depending on the resulting proportion) shall be effective during the fiscal year beginning in the next July 1 st. The Secretary of the Treasury shall make the first determination on or before March 31 st, 2017 and the first adjustment shall take effect on July 1 st of Fiscal Year 2017-2018.
(h) Exemptions.— The tax imposed by this section shall not apply to:
(1) Crude oil, partially finished, finished oil by-products, or any other hydrocarbon blend (including natural gas) used to generate electricity by:
(A) The Electric Power Authority, any successor entity or entity operating the facilities of the Electric Power Authority or the successor thereof; or
(B) any power plant only with relation to that portion of the natural gas used to generate electricity to be 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.
(D) business holding a decree issued under §§ 10641 et seq. of this title with respect to the provisions of subsections (6) and (8) of Section 9 of said Act or equivalent sections under prior or successor industrial incentives laws.
(2) Crude oil, partially finished and finished oil by-products, or any other hydrocarbon blend exported from Puerto Rico.
(3) Crude oil, partially finished and finished oil by-products, or any other hydrocarbon blend 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 blend 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 blend used in the manufacture of goods which, after being finished, 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 hydrocarbon blend used as lubricant or fuel in the propulsion of aircraft and watercraft in their air and sea travels between Puerto Rico and other places
(7) Crude oil, partially finished and finished oil by-products, or any hydrocarbon blend used as lubricant or fuel for stem generation to cook, can, and sterilize raw material proceeding from industrial fishing.
(8) Crude oil, partially finished and finished oil by-products, or any hydrocarbon blend 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 without territorial waters.
(9) Crude oil, partially finished, finished oil by-products, or any other hydrocarbon blend subject to the excise tax on diesel oil imposed under § 31626(a)(3) of this title; Provided, That on or after the effective date of the transfer (as such term is defined in § 2012a of Title 9), this exemption shall not apply to the three-dollar and twenty-five cent ($3.25)-increase established in subsection (a)(2) of this section, thus, said articles also subject to the excise tax on diesel oil shall be subject to a single excise tax of three dollars and twenty-five cents ($3.25) under this section.
For purposes of this clause, “diesel oil” shall be understood as that used in Puerto Rico by: (A) establishments engaged in the business of selling at retail fuel for motor vehicles, which is stored in underground storage tanks authorized by the Environmental Quality Board; (B) establishments engaged in the business of selling fuel to the persons described in paragraph (A) of this clause, or to other persons for use in motor vehicles used in the business of transporting persons or merchandise, or (C) persons, for use in motor vehicles used to transport merchandise.
The exemption provided for in this clause applies to importers of diesel oil who sell it to any person described in paragraphs (A), (B), and (C) of this clause. In order for the exemption provided for in paragraphs (B) and (C) of this clause to apply, the person described in said paragraphs shall have the previous acknowledgement and authorization of the Secretary.
(i) The goods, including crude oil, partially finished and finished oil by-products, or any hydrocarbon blend subject to the provisions of this section shall be exempt from the sale and use tax established in §§ 32001 et seq. of this title.
(j) 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.
(k) 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 (1) 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 sales price billed to the exempt person.
(l) Amount of the bond.— The bond or endorsement to an existing bond, if any, shall be equal to the average of the taxes paid within thirty (30) days in favor of the Secretary to ensure the faithful compliance with the provisions of this section.
(m) 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, added as § 3020.07A on Jan. 15, 2015, No. 1, § 2.06.; Jan. 15, 2015, No. 2, § 2; Mar. 13, 2015, No. 29, § 4; Sept. 30, 2015, No. 159, § 14.