2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 17 - Internal Revenue Code of 2011 (§§ 30001 — 33423) › PART II - Income Taxes (§§ 30041 — 30622) › Chapter 1007 - Credits Against Tax (§§ 30201 — 30230) › Subchapter A - Nonrefundable Credits (§§ 30201 — 30210d) › § 30207 - Credit for increase in procurements of Puerto Rican agricultural products

(a) In general.—
(1) Every eligible business that increases the purchase of Puerto Rican agricultural products in lieu of products imported to be sold locally, may claim a credit against the tax imposed under §§ 30041 et seq. of this title, as provided in this section.
(2) Amount of credit.— The credit provided in this section shall not be less than five percent (5%) and up to a maximum of twenty percent (20%) of the increase in the value of the purchase of agricultural products harvested, produced, and manufactured in Puerto Rico during the specific taxable year in which the credit is claimed on the purchase of said products during the base period. The credit to which the eligible business is entitled shall be fixed by means of a contract between the eligible business, the Secretary of Agriculture and the agricultural production centers developed by the Department of Agriculture or the agricultural sectors organized by the Department of Agriculture, through the implementation of §§ 3051 et seq. of Title 5, known as the “Puerto Rico Agriculture and Livestock Industry Regulating Act”, or with a qualified farmer. The criteria to determine the percentages to be granted shall be prescribed by regulations, approved by mutual agreement between the Secretary of Agriculture and the Secretary of the Treasury.
(b) Limitation of credit.— The credit provided by this section may be used to reduce the tax under §§ 30041 et seq. of this title up to twenty-five percent (25%). Any credit that is not used by the eligible business may be carried over to subsequent taxable years until used entirely, subject to the above limitation.
(c) Definitions.— For purposes of this section, the following terms shall have the meanings stated hereinbelow:
(1) Eligible business.— Any business that acquires a Puerto Rican agricultural product under an agreement entered into by and between said business, the Secretary of Agriculture and an agricultural production center developed by the Department of Agriculture or an agricultural sector organized by the Department of Agriculture through the implementation of §§ 3051 et seq. of Title 5, known as the “Puerto Rico Agriculture and Livestock Industry Regulating Act”, or a qualified farmer, to be sold directly to consumers. To remain as an eligible business and benefit from the credit provided in this Section, the eligible business shall not reduce the level of purchases of qualified products in a proportion greater than fifteen percent (15%) of the level of purchases reached during the year preceding the period for which credit is requested. The Secretary of Agriculture shall issue a certificate of eligibility to qualify an eligible business under this section.
(2) Agricultural production center developed by the Department of Agriculture.— Groups of farmers and processing plants under the Agriculture Program of the Department of Agriculture promoted and developed through its Economic and Agricultural Development Program.
(3) Agricultural sector organized by the Department of Agriculture.— Those agricultural sectors that have been organized and comply with §§ 3051 et seq. of Title 5, known as the “Puerto Rico Agriculture and Livestock Industry Regulating Act”.
(4) Puerto Rican agricultural product.— Any product that can be sold to consumers, in its natural or processed state, which has been manufactured with purely Puerto Rican products or harvested in Puerto Rico by a qualified farmer. Products that qualify as “manufactured products”, as said term is defined in § 32130 of this title, are hereby excluded from the term “Puerto Rican agricultural product”.
(5) Qualified farmer.— A farmer engaged in agricultural production, whose specific sector has not been regulated under the “Puerto Rico Agriculture and Livestock Industry Regulating Act”, §§ 3051 et seq. of Title 5, or for which an agricultural production center has not been developed, and is qualified by the Secretary of Agriculture pursuant to the parameters established by regulations.
(6) Base period.— Means the three (3) taxable years prior to the first year in which the credit is claimed, or that part of said period that applies to businesses that do not have three (3) years of operations prior to the date of the request for credit. In the case of taxpayers who have claimed the credit provided in this section, or its equivalent under Act No. 120-1994, as amended, known as the “Puerto Rico Internal Revenue Code of 1994”, in previous years and who have maintained an increasing level of purchases of qualified products from the execution date of the agreement set forth in subsection (a), the base period shall be set as the three-year taxable period ending during calendar year 2003.
History —Jan. 31, 2011, No. 1, § 1051.07, retroactive to Jan. 1, 2011; Dec. 10, 2011, No. 232, § 49.