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Hydroponic & Other Methods (Vegetables)
Tax incentive for hydroponic and innovative vegetable production methods supporting efficient modern agriculture.
7 min
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Section Code:
2081.01(a)(2)(ix)
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Purpose:
Agroindustry — 2081.01(a)(2)(ix)
Overview
The Hydroponic & Other Methods (Vegetables) designation under Section 2081.01(a)(2)(ix) of Act 60-2019, as amended, provides preferential tax treatment for vegetable production using hydroponics, aquaponics, vertical farming, and other innovative growing methods. This designation supports modern agricultural techniques that maximize production efficiency and resource use.
Qualifying operations may receive reduced corporate income tax rates, property tax exemptions on facilities and equipment, and municipal tax relief. The program attracts hydroponic farms, vertical farming operations, and innovative vegetable producers.
The key distinction is its focus on innovative growing methods rather than traditional soil-based agriculture. These methods often enable year-round production with reduced land and water requirements.
Key Benefits
Reduced Corporate Income Tax Rate
Hydroponic operators may receive reduced rates on income from vegetable production.
Property Tax Exemptions
Hydroponic facilities, growing systems, climate control equipment, and infrastructure may receive property tax exemptions.
Municipal Tax Relief
Operations may receive exemptions from municipal license taxes.
Efficient Food Production
Hydroponic methods enable efficient, year-round vegetable production with reduced resource requirements.
Requirements & Obligations
Hydroponic Operations Requirements
Operations must use hydroponics, aquaponics, vertical farming, or other innovative growing methods for vegetable production.
Facility and Systems
Operations must maintain appropriate hydroponic or growing systems, climate control, and production infrastructure.
Food Safety
Producers must comply with food safety standards and produce quality requirements.
Employment
Operations must employ Puerto Rico residents.
Reporting
Annual reports document production volumes, revenues, and employment.
How to Apply
Applications typically require six (6) to twelve (12) months. Applications include production system descriptions, facility plans, agronomic programs, and financial projections. Upon approval, operators complete facility development and commence production.
This information is educational and should not be considered legal or tax advice. Applicants should consult with qualified legal and tax professionals familiar with Puerto Rico incentive programs before making any business decisions or submitting applications.
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