2023 Laws of Puerto Rico › TITLE SEVEN - Banking (§§ 1 — 3116) › PART VII - Other Financial Institutions (§§ 3001-3012 — 3116) › Chapter 142 - Capital Investment Funds Act of 1999 (§§ 3021 — 3047) › § 3033 - Tax credit; sale or assignment of tax credit; adjusted base

(a) Tax credit. — The Administrator of the fund shall be entitled to a tax credit equivalent to twenty-five percent (25%) of the sum of money received by the fund as private proprietary interests in the fund, which can be used solely as provided in subsections (b) and (d) of this section.
The tax credit shall be available at the time the fund receives cash which qualifies it as an investment of private proprietary funds.
(b) Sale or assignment of tax credit. — The Administrator of the fund shall not use the tax credit granted by this section to reduce the tax liability of the fund. The Administrator of the fund may sell all or part of the tax credit granted by this section to investors in the fund or to other persons.
(c) The amount collected for the sale of tax credits shall be used by the Administrator of the fund in:
(1) Investments to promote the generation of income for the fund, or
(2) to defray the costs incurred in technical assistance for small businesses.
(d) The Administrator may also assign the tax credits free of charge to investors in the fund as an incentive to promote investment in the fund. Provided, That the Administrator shall not assign tax credits in excess of twenty-five percent (25%) of the amount of money received by the fund to any investor free of charge, as an investment by said investor in the fund.
(e) Acquirers of tax credits authorized by this section shall pay for them in cash to the Administrator of the fund at a price agreed upon by both parties, which shall at no time be less than seventy-five percent (75%) of the worth of said credits. It is provided that this limitation shall not apply to the gratuitous assignment of tax credits as an incentive for investments in the fund. Said acquirers may claim a credit against their income tax for the total amount of the credit acquired. Said tax credit may be applied against any tax determined under the provisions of the §§ 8006 et seq. of Title 13, including the minimum alternate tax of § 8417 of Title 13 and the alternate individual tax of § 8414 of Title 13.
(f) In those cases in which the acquirer of a tax credit is an investor of the fund, the internal base and the tax base that the investor has in the fund, determined pursuant to §§ 8401 et seq. of Title 13, shall be reduced by an amount equivalent to the difference between the amount of tax credits and the amount of money paid by them.
(g) The fund that has assigned or sold all or part of its tax credit and the acquirer of said tax credit shall notify the Secretary of said assignment through a statement to such effects, which statement shall be included by the acquirer with his/her income tax return for the year that the assignment or sale of the tax credit is made. The statement shall include such information as required by the Secretary through regulations.
(h) Taxation of money received from the sale of tax credits. — The money received by the fund in exchange of tax credits shall be exempted from taxation under §§ 8401 et seq. of Title 13, including the minimum alternative and the basic alternate tax for individuals imposed under said sections.
(i) Carry-over of tax credit. — The amount of tax credits referred to in subsection (a) of this section acquired by any taxpayer that is not used by the acquirer may be carried over to any of the five (5) taxable years following the date of acquisition of said credits until it is exhausted, or the five (5)-year term expires, whichever is first.
(j) Taxation of the purchasers of tax credits on the difference between the amount paid and the worth of said credits. — The purchasers of tax credits shall be exempted from the payment of taxes under §§ 8401 et seq. of Title 13 for the difference between the amount paid to acquire said credits and the worth thereof.
(k) The profits and losses of the private investors in the fund, as well as the sums to be distributed at the time of the liquidation of a fund, shall be computed in proportion to the sum of proprietary interests of each investor in the fund, except that said amount of private proprietary interests shall be shall be reduced by:
(1) The amount of free tax credits received by the investor, and
(2) the amount of the discount in the purchase of tax credits of the fund by the investor. In the case of the Bank, the profits, losses and distributions in the liquidation of a fund, shall be governed by the provisions of § 3036 of this title.
(l) Any certificate or other document that is rendered to the investors as evidence of their shares in the fund shall contain a note that clearly shows the adjustments made for free tax credits or discounts in the purchase of tax credits.
(m) Those institutional investors in the fund that are not subject to the Puerto Rico tax system, such as pension funds and the entities described in § 8006 of Title 13 (but excluding entities with tax exemption decrees under the Incentives Act), may assign, sell or otherwise transfer, totally or partially, to another person the tax credit granted by this section. The purchaser of said credit shall notify the assignment to the Secretary through a statement to such effect, which shall be included with the person’s income tax return for the year in which the assignment of said credit is made. The statement shall include the information required by the Secretary through regulations.
History —Jan. 28, 2000, No. 46, § 14; Sept. 2, 2000, No. 377, § 4.