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Purchase Local Raw Materials & Goods
Tax incentive for businesses purchasing significant quantities of local agricultural raw materials and goods from Puerto Rico suppliers.
7 min
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Section Code:
2081.01(a)(2)(iv)
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Purpose:
Agroindustry — 2081.01(a)(2)(iv)
Overview
The Purchase Local Raw Materials & Goods designation under Section 2081.01(a)(2)(iv) of Act 60-2019, as amended, provides preferential tax treatment for agricultural businesses that purchase significant quantities of raw materials and goods from local Puerto Rico producers. This designation incentivizes supply chain integration and local sourcing in agriculture.
Qualifying businesses may receive reduced corporate income tax rates, property tax exemptions, and municipal tax relief when purchasing specified levels of local agricultural inputs. The program encourages agricultural businesses to source from Puerto Rico suppliers.
The key distinction is its focus on local purchasing behavior rather than specific production activities. Businesses benefit from sourcing Puerto Rico agricultural materials.
Key Benefits
Reduced Corporate Income Tax Rate
Businesses purchasing qualifying levels of local materials may receive reduced rates.
Supply Chain Integration
The designation encourages local agricultural supply chain development and integration.
Local Economic Impact
Local purchasing requirements support Puerto Rico agricultural producers and suppliers.
Property and Municipal Tax Benefits
Qualifying businesses may receive property tax exemptions and municipal tax relief.
Requirements & Obligations
Local Purchasing Requirements
Businesses must purchase minimum percentages or amounts of raw materials and goods from Puerto Rico agricultural suppliers.
Documentation
Detailed records of local purchases must be maintained demonstrating compliance with purchasing requirements.
Agricultural Focus
Purchasing requirements focus on agricultural raw materials and goods rather than non-agricultural products.
Supplier Verification
Businesses must verify that suppliers are genuine Puerto Rico operations.
Reporting
Annual reports document local purchasing volumes, suppliers, and compliance with requirements.
How to Apply
Applications typically require four (4) to six (6) months. Applications include business descriptions, local sourcing plans, supplier information, and projected local purchases. Upon approval, businesses implement local purchasing programs and commence reporting.
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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