By PATRICIA MAZZEIDEC. 16, 2017 Three months after Hurricane Maria slammed into Puerto Rico, the sweeping federal tax overhaul that Congress plans to vote on in the next week could deliver another hit to the island’s economy, which is already crippled by a debt crisis and widespread power losses from the storm.
The final legislation negotiated by the House and Senate would treat mainland companies in Puerto Rico, a United States commonwealth, as it does those in foreign countries, and impose a 12.5 percent tax on income they receive from intellectual property. The bankrupt Puerto Rican government, which lobbied intensely for special tax treatment, fears that the bill could endanger crucial industries and thousands of jobs on the island.
“This is really a devastating blow for Puerto Rico, in our greatest time of need,” Gov. Ricardo A. Rosselló said on Friday.
The tax bill’s effect on Puerto Rico could have been worse: Had Republicans opted for the House version of the bill, American companies that import goods from their affiliates abroad would have been charged a 20 percent excise tax. That tax, intended to keep American profits from being shifted overseas, would have threatened much of Puerto Rico’s pharmaceutical and medical industry.
It ultimately did not make the compromise plan. Still, the new intellectual property tax was unwelcome news for leaders dealing with an economy in free fall. Read more from nytimes.com…
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