P.R. Laws tit. 13, § 197
(a) There are hereby exempted from the payment of property taxes all such real and personal property, including lands, buildings, equipment, accessories, and vehicles owned or which may in future be acquired by the Puerto Rico Milk Industry, Inc. for the development of its ends and purposes.
(b) All income of the Puerto Rico Milk Industry[, Inc.] derived from its operation is hereby exempted from the payment of all kinds of taxes.
(c) All machinery, equipment, apparatus, accessories, and vehicles acquired, purchased, or imported by the Puerto Rico Milk Industry, Inc., for use in the various phases and operations of its business concerning the processing of milk products, are hereby exempted from the payment of excises, duties, and any other type of importation or purchase imposts.
(d) The property and income tax exemption as well as the exemption from the payment of excises and other fees, hereby established in behalf of the Puerto Rico Milk Industry, Inc., shall be in full force and effect for as long as the totality of the capital stock of the said corporation belongs to the Milk Industry Development Fund created by §§ 1092—1118 of Title 5; Provided, That at any time where all or part of the said stock becomes the property of private persons, the tax exemption granted shall be rendered without force and effect, and from that date on all properties and income of the corporation shall be taxed in identical manner as the properties and income of any private corporation, and the machinery, equipment, apparatus, accessories, and vehicles thereby acquired shall be subject to the payment of excises and normal imposts; Provided, further, That in case of the sale of said stock the same shall be sold for at least the market price or book value, whichever is the highest.
(e) In the evaluation, analysis, consideration, award, renegotiation, and revision of any incentives or benefits granted under this section, the Milk Industry Regulation Administrator, as provided in §§ 1092 et seq. of Title 5, shall be required to oversee and ensure compliance with all the provisions of this section. The Administrator shall be the sole official responsible for verifying and ensuring that the Puerto Rico Milk Industry Inc. meets the eligibility requirements provided herein.
When evaluating the benefits and incentives granted herein, the Administrator shall oversee that the Puerto Milk Industry Inc. promotes:
(1) The creation and retention of jobs.
(2) The acquisition of raw materials and products manufactured in Puerto Rico for the construction, maintenance, renovation, or extension of their physical facilities. If the purchase of said products cannot be financially justified when taking into account criteria such as quality, quantity, price, or availability of these products in Puerto Rico, the Administrator may issue a certificate attesting to such fact.
(3) The acquisition of services from professionals or businesses with a presence in Puerto Rico. However, if this is not possible due to criteria such as availability, experience, specificity, or skill or any other valid reason recognized by the Administrator, the Puerto Rico Milk Industry Inc. may acquire such services through an intermediary with a presence in Puerto Rico, which shall contract directly with the service provider chosen by the Puerto Rico Milk Industry Inc., in order to receive the requested services.
(4) Proof that a significant amount of the income derived from its economic activity is deposited and that the services of banking and/or cooperative institutions with a presence in Puerto Rico are used. If the financial activity cannot be financially justified when taking into account criteria such as the availability or accessibility of these institutions in Puerto Rico, the Administrator may issue a certificate attesting to such fact.
If the exempt business partially meets the requirements established in this clause, the Administrator shall be required to establish a formula that allows for the quantification of the aforementioned factors, and for the subtraction of the requirement that has not been met from the total percentage of the specific credit, in order to obtain the exact percentage of the benefit in question.
The Administrator shall be required and responsible for preparing a Certificate of Compliance every two years, once the Puerto Rico Milk Industry Inc. validates, in the judgment of said official, that it has met the requirements set forth in this section. Every two years, the Administrator shall verify the information submitted by the Puerto Rico Milk Industry Inc. so that the Certificate of Compliance is issued not later than on the fifteenth (15 th) day of the second (2 nd) month after the close of the taxable year of the applicant.
The Certificate of Compliance shall include, in turn, the following information regarding the Puerto Rico Milk Industry Inc.: the name of the business, 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”.
The Certificate of Compliance shall be issued by the Administrator through the Interagency Validation Portal for the Granting of Incentives for the Economic Development of Puerto Rico, to the agencies, public corporations, and municipalities responsible for awarding the benefits or incentives established in this section. However, during the period in which the Portal is still not operating, it shall be the duty of the Administrator to issue a Certificate of Compliance to the agencies, public corporations, and municipalities responsible for awarding the benefits or incentives under this section following the ordinary procedure. The filing of the Certificate of Compliance by the Puerto Rico Milk Industry Inc. shall be an essential requirement for the agency, public corporation, or municipality to award the benefit or incentive provided for in this section.
Actions taken by the Secretary of the Department of the Treasury, the Executive Director of the Municipal Revenues Collection Center (CRIM), or any other government official or body, or public corporation concerned, in connection with the qualification process for the granting of the benefits or incentives under this section, shall be limited to the taxation aspects of the granting of the benefit or incentive in question, upon the issuance of a valid Certificate of Compliance, as provided in this subsection. The Administrator shall be responsible, first and foremost, for overseeing eligibility under any and all provisions of this section. However, the Secretary of the Department of the Treasury, the Executive Director of the Municipal Revenues Collection Center (CRIM), or any other government official or body, or public corporation concerned with any of the benefits or incentives awarded under this section may contact the applicant and the Administrator should further information be needed to validate the data on the Certificate of Compliance, and shall notify and request the applicant to supply such information in order to rectify the situation. The Secretary of the Department of the Treasury or the Executive Director of the Municipal Revenues Collection Center may deny any tax incentives or benefits requested if, in their judgment, the information requested has not been supplied. Moreover, the provisions of this section shall not preclude in any manner the power conferred to the Secretary of the Treasury under § 33202 of this title, known as the “Puerto Rico Internal Revenue Code of 2011”; and, if necessary, the power to revoke any incentives previously granted by virtue of a Certificate of Compliance, in accordance with the corresponding Act; or the power to refer the case to the pertinent agency or public corporation for the corresponding action.
History —June 21, 1962, No. 72, p. 168, §§ 1—4; Nov. 17, 2015, No. 187, § 20; Dec. 28, 2016, No. 208, § 4.