2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 15 - Puerto Rico Industrial Incentives Generally (§§ 10001 — 10855) › PART III - Other Tax Incentives (§§ 10401 — 10855) › Chapter 941 - Agriculture Tax Incentives (§§ 10401 — 10410) › § 10405 - Excises

(a) Bona fide farmers are hereby exempted from the payment of all types of excises for the following articles, when they introduce or acquire them, directly or indirectly, for use in their agricultural business:
(1) Incubators and breeding places for poultry and other animals; articles for the breeding and development of bees and cattle.
(2) Milkers, including electric milkers, fillers for silos and tanks for the use of cattle farmers to preserve milk [on] the farms or cattle farms.
(3) Electric power plants.
(4) Equipment, articles and objects whose operation depend solely on solar, aeolian or hydraulic or any other type of power, excluding the power produced by petroleum and its derivatives.
(5) Equipment used by coffee producers to process the beans once they are grown, until they are suitable for roasting; equipment and devices used in the production, processing, pasteurizing or production of milk or its byproducts.
(6) Equipment used to mix food in the farm and the food distribution systems for animals or bees in the farms; treated posts and wire, for fencing the farms.
(7) Equipment and apparatus used for raising poultry and the production of eggs, and semen for the breeding of cattle.
(8) Equipment, apparatus or objects used by bona fide farmers in the business of producing and cultivating vegetables, seeds, coffee, mango, legumes, sugar cane, flowers, ornamental plants, grass or hay for cattle fodder, farinacea, fruit, pigeon peas and pineapples, for livestock, horticulture, rabbit breeding, hog breeding, aviculture, beekeeping, aquaculture and fishing; for cattle or goat breeding for meat or milk; for production, processing, pasteurizing or sterilizing of milk or its derived products, for the breeding of native thoroughbred horses and Puerto Rican purebred paso fino horses and any other activity determined by the Secretary of Agriculture.
(9) Honey or molasses as fodder for cattle; any other food for cattle, rabbits, goats or sheep.
(10) Spare parts, including, but not limited to tires and tubes for aircraft used in agricultural activities.
(11) Any kind of vehicle other than automobiles, used in agricultural activities.
The exemption established in this section shall apply to the replacement of vehicles thus acquired, provided that the motor vehicle to be replaced was owned by a bona fide farmer for use in the agricultural business, for a period of not less than four (4) years. Notwithstanding the above, when the vehicle to be replaced has lost its utility due to accidental causes not attributed to the owner’s negligence, the exemption shall be applicable to the replacement. When the owner of a vehicle who has the benefit of this exemption, sells, transfers, or otherwise assigns it, for a price that does not exceed five thousand seven hundred sixty-nine dollars ($5,769), the new owner is bound to pay a minimum excise tax of two hundred and fifty dollars ($250), before taking ownership thereof. In the event the price exceeds five thousand seven hundred sixty-nine dollars ($5,769), the new owner is bound to pay the excise tax that results upon applying the table provided in Section 2014(a)(1) of Act No. 120 of October 31, 1994, part of the 1994 Internal Revenue Code of Puerto Rico. The amount of the excise tax to be paid as provided above, shall be calculated on the basis of the taxable price on which the exemption was granted, less its depreciation. It shall be the responsibility of the person exempted to require the new owner to show evidence of having paid the excise tax before handing over the vehicle. When the new owner is another bona fide farmer, he/she may make use of these benefits, for the remainder of the four (4) years of exemption originally granted.
(12) The gas, oil and diesel oil for exclusive use in the operation of agricultural machinery and vehicles, husbandry, poultry farming or for the breeding of native thoroughbred horses or pure Puerto Rican paso fino horses, or in the operation of machinery or vehicles of producers, processors, pasteurizers or sterilizers of milk and its derived products.
(13) The tractors, plows, rakes, mowing machines, planters and any other accessory equipment for tractors, including the parts thereof, to be used in the agricultural business by bona fide farmers.
(14) Weed killers, insecticides, fumigating pesticides and fertilizers, including the equipment for the application thereof.
(15) Drip irrigation systems, sprinklers, including but not limited to pumps, pipes, valves, timers, filters, injectors, chemical generators, steel, aluminum or wood sheds for packing, materials for shipping, material for sled beds, seeding materials, planters, baskets and trays, materials to support plants (wood or bamboo stakes), plastic mulch or ground cover, steel, aluminum or treated wood nurseries, saran shade cloth and/or fiberglass to roof the nurseries.
(16) Equipment, machinery and materials used in the treatment of mangoes for export through a hot water process.
(17) Systems, equipment and materials used for the control of the environment required by the regulating agencies to operate their business.
(18) Barns and other equipment used for the growing of vegetables by hydroponic methods.
(19) Spare parts, accessories and replacements for any of the items described in clauses (1) through (18) of this subsection.
(b) Any bona fide farmer who wishes to avail himself of the exemptions listed in this section shall comply with the bona fide farmer provisions established by the Secretary of Agriculture and the Secretary of the Treasury, and submit a sworn statement to the Secretary of the Treasury certifying that he is engaged in the exploitation or operation of an agricultural business, and that the item for which he is requesting an exemption shall be used to operate and develop said business.
The sworn statement shall be submitted on the form provided by the Secretary of the Treasury to such effect. In addition to any other information deemed pertinent by the Secretary of the Treasury, such statement shall include the exact address of the business, personal data of the applicant and the main product or commodity to which the business is devoted, the cadastre number of the property or properties connected to the business; the merchant registration number; the account connected to the business as required in the Puerto Rico Internal Revenue Code; the employer identification number; and the information required by §§ 1141 et seq. of Title 23, better known as the “Fiscal Information and Permit Control Act”. Should it be determined that the information submitted by the applicant was fraudulent or false, in addition to denying the exemption, the applicant shall be subject to any penalties for perjury established in § 5362 of Title 33, as amended, known as the “Penal Code of Puerto Rico”.
New farmers or agricultural entrepreneurs shall be governed by the provisions of Section 6 of this Act.
History —Dec. 1, 1995, No. 225, § 6, renumbered as § 7 by § 3 and amended on Apr. 30, 1996, No. 35, § 5; Nov. 17, 2015, No. 187, § 53.