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Puerto Rico Treasury simplifies oil tax refunds for farmers

Puerto Rico Treasury Secretary Francisco Parés-Alicea has announced the streamlining of the process for requesting refunds on excise taxes related to the purchase of gas oil and diesel oil for agricultural machinery and vehicle operation.

“We continue to review processes within the Treasury Department and integrate more technology so that different sectors can benefit from available incentives and complete their procedures quickly and easily,” Parés-Alicea said. “In this case, we had a direct request from farmers to review the excise tax refund process to make it more accessible, and it is now in place.”

The Treasury Department has established a new procedure through the Internal Revenue Unified System (SURI, in Spanish) for bona fide farmers to request refunds on excise taxes for gas oil or diesel oil purchases used exclusively for operating agricultural machinery and vehicles, including those used in livestock and poultry farming. 

This procedure also applies to the breeding of native thoroughbred or Puerto Rican Paso Fino horses, machinery or vehicles for milk producers and equipment used in other agro-industrial operations.

Agriculture Secretary Ramón González-Beiró welcomed the simplified processes, stating that it spurs continued growth in the sector.

“It is important to offer incentives to our agricultural sector, which represents relief in the operation of their farms,” González-Beiró said. “By supporting them, we promote better food production, thereby encouraging local consumption. We encourage all our farmers to apply to benefit from it. We will continue to promote our agriculture.”

Parés-Alicea advised farmers to consult Internal Revenue Circular Letter No. 23-15, which details the requirements and submission process through SURI, including how to apply for the Bonafide Farmer Identification Number necessary for refund requests.

To request a refund, farmers must have an active identification with the Treasury Department and can submit one refund request per month. Requests should include an itemized breakdown of all gas oil and diesel oil purchase transactions for that month, with invoices showing the date, quantity of liters purchased and total amount paid.

Farmers have a 120-day period to amend any refund request. The Treasury Department has not set limits on the number of liters or the refund amount claimed, but documentation for gas oil and diesel oil purchases must be provided.

For a refund to be processed and approved, submitted invoices must be in the farmer’s name and include the supplier’s name, product description, invoice date, quantity in liters and the total paid. Proof of payment for all invoices is required, and farmers may submit additional documents they consider necessary, though these do not replace the need for commercial invoices.

Refund requests are made through SURI in the farmer’s Bonafide Farmer Refund account by selecting “Form, Period, and Other Options” and choosing the relevant period.

Banking details must be entered for direct deposit refunds. The system will automatically calculate the refund amount for each invoice.

A refund will be granted at 4 cents per gallon or fraction, as per Section 3020.06 of the Puerto Rico Internal Revenue Code of 2011, as amended. Additionally, the reducing tax will be refunded at $15.50 per barrel or fraction of gas oil or diesel oil.

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