Late in October, Puerto Rico passed a tax law in under 72 hours that imposed a 4 percent tax on companies manufacturing there but who are not headquartered on the island. The law applies to companies with more than $75 M in sales who export.
Drugmakers and biotechs are not happy and are making noise about leaving the island. The drugmakers say the legislation was passed without the benefit of hearings or analyses. Puerto Rican government sources counter the bill was passed to “benefit the workers and employees".
The US Chamber of Commerce wrote to the Puerto Rico Chamber of Commerce: “A strong incentive is created for foreign companies to look elsewhere for their manufacturing and distribution. An ad hoc tax passed without notice, after the start of the fiscal year, which takes effect in less than three months, will wreak havoc on the business and tax planning of companies in a time of increasing uncertainty in the global economy, creating a hostile tax environment in Puerto Rico.”
No taxation without representation.
Posted by Bruce Lehr November 11th 2010.