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 953 - Economic Incentives Act For The Development Of Puerto Rico (§§ 10641 — 10673) › Subchapter I - Economic Incentives (§§ 10641 — 10661) › § 10648 - Municipal license fees and other municipal taxes

(a) The tax-exempt businesses that hold a decree granted under this chapter shall enjoy a sixty-percent (60%) exemption on municipal license fees, municipal excise taxes and other municipal taxes levied by any municipal ordinance, during the periods provided for in § 10650(b) of this title.
(b) The provisions of subsection (a) of this section notwithstanding, the following tax-exempt businesses that hold a decree granted under this chapter shall enjoy percentage exemptions on municipal license fees, municipal excise taxes and other municipal taxes levied under any municipal ordinance, as provided below:
(1) Businesses exempted under this chapter which operate in the special industrial development zone constituted by the municipalities of Vieques and Culebra, shall have a ninety-percent (90%) exemption.
(2) Businesses exempted under this chapter which are deemed to be small or medium businesses pursuant to the provisions of § 10642(i) of this title, but only for the period during which they are small or medium businesses, shall have a seventy-five-percent (75%) exemption. In the case of tax-exempt businesses that are small or medium businesses and which have been operating before requesting a decree under this chapter, this clause shall only apply to the volume of business in excess of the average volume during the three (3) years preceding the date of the request. The volume of business not covered under this clause shall enjoy a sixty-percent (60%) exemption pursuant to subsection (a) of this section.
(3) Tax-exempt businesses described in § 10642(h)(12) of this title, shall have a one hundred percent (100%) exemption during a period of five (5) years as of the date the exemption takes effect.
(c) The portion which is taxable under subsections (a) and (b) of this section shall be subject, during the term of the decree, to the tax rate in effect as of the date the decree was signed, regardless of any subsequent amendment made to the decree to cover operations of the tax-exempt business in one or various municipalities.
(d) The tax-exempt business that holds a decree granted under this chapter shall enjoy total exemption from municipal taxes or municipal license fees applicable to the volume of business of said tax-exempt business during the semester of the fiscal year of the Government during which the tax-exempt business starts operations in any municipality, pursuant to the provisions of the Municipal License Fee Act of 1974, §§ 651—652y of Title 21. Furthermore, the tax-exempt business that holds a decree granted under this chapter shall be totally exempted from municipal taxes or license fees on the volume of business attributable to said municipality during the two (2) semesters of the fiscal year or the fiscal years of the Government following the semester in which the same started operations in said municipality.
(e) Tax-exempt businesses that hold a decree granted under this chapter and their contractors and subcontractors shall be totally exempted from any tax, levy, fee, license, excise tax or rate levied by any municipal ordinance on the construction of works to be used by said tax-exempt business within a municipality, without it being understood that said taxes include the municipal license fee levied on the volume of business of the contractor or subcontractor of the tax-exempt business, during the term authorized under the tax exemption decree.
(f) The income derived from the investments that qualify under § 10642(j) of this title, shall be totally exempted from municipal license fees, municipal excise taxes and other municipal taxes.
(g) Any business exempted under this chapter or under preceding acts may waive the five-percent (5%) down payment discount benefit provided for in § 651j of this Title 21, and make the total payment of its municipal license fee on the date provided for in said section. Provided, That in the case of tax-exempt businesses that opt to make the down payment and waive the discount, the period of prescription for the assessment and collection of the license fee levied under the Municipal License Fee Act shall be three (3) years as of the date on which the Volume of Business Statement is submitted, in lieu of the terms provided for in subsections (a) and (b) of § 651c of Title 21.
(h) In housing projects, municipalities may grant a partial or a total credit for excise taxes on construction, for the total cost of the infrastructure works that comply with self-sustainable or partially-sustainable criteria, as defined in this chapter.
History —May 28, 2008, No. 73, art. 1, § 8, eff. July 1, 2008.