US House OKs bill giving PR employers income tax credit
The U.S. House of Representatives passed Thursday legislation that will enable employers in Puerto Rico to get an income tax credit of up to $6,000 for each employee that they pay up to $15,000 in the wake of Hurricanes Irma and María
Resident Commissioner Jenniffer Gonzalez-Colón (R-NPP) sponsored an amendment to extend the tax credit to Puerto Rico and the U.S. Virgin Islands along with a Member of the House committee that handles tax issues — Ways and Means, Carlos Curbello (R-FL), and Virgin Islands Delegate Stacey Plaskett
“The purpose of the amendment, Gonzalez-Colón explained, “is to encourage and help employers to keep employees on their payroll despite loses from the hurricanes.”
The bill, the Disaster Relief and Airport and Airway Extension Act of 2017, H.R. 3823, originally would have only provided the tax credit in the States and the District of Columbia since Puerto Rican businesses (and individuals) only pay Federal income taxes on income from the States and pay income taxes on local income to the government of Puerto Rico.
(Virgin Islanders only pay income taxes on all income to the government of their territory.)
The amendment would enable all Puerto Rican employers to get the $6,000 per employee through a grant that the U.S. Treasury Department would make to the government of Puerto Rico based upon a territorial government plan to “promptly” pay the monies to employers in the islands.
The grants to Puerto Rico and the USVI are open-ended as to amount. The House defeated an amendment by Representative Jerrold Nadler (D-NY) to increase it by $1 billion.
The Curbello-Gonalez-Colon-Plaskett amendment was passed by the House Committee on Rules late Wednesday.
It passed the House Thursday by a vote of 255-264.
The amendment states for Puerto Rico: “PUERTO RICO.—The Secretary of the Treasury shall pay to Puerto Rico amounts estimated by the Secretary of the Treasury as being equal to the aggregate benefits that would have been provided to residents of Puerto Rico by reason of the provisions of this title if a mirror code tax system had been in effect in Puerto Rico. The preceding sentence shall not apply with respect to Puerto Rico unless Puerto Rico has a plan, which has been approved by the Secretary of the Treasury, under which Puerto Rico will promptly distribute such payments to its residents.