Though the United States Hispanic Chamber of Commerce has been supportive of the efforts in Congress to overhaul our outdated tax code, we are discouraged to find provisions in the bill that impose foreign taxes on Puerto Rico.
The newly released tax bill includes a 12% tax on income derived from intellectual property by American companies outside of the U.S. Under the new tax bill, Puerto Rico is to be subject to these additional taxes. Put simply, Puerto Rico is to be taxed as a foreign country.
We cannot say this enough: The Puerto Rican people are American citizens, and they deserve to be treated as such. In the context of tax reform, this means that Puerto Rican families, entrepreneurs and businesses should be taxed at the same rate as any American family, entrepreneur or business.
The U.S. Constitution states that all duties, imposts and excises shall be uniform throughout the United States. Not only is this tax increase unconstitutional given Puerto Rico’s status as a U.S. territory, it is a disservice to impose higher taxes on American businesses on the island as they recover from Hurricane Maria, the natural disaster that devastated the island only three months ago.
This is a call to action. The tax bill is to be voted on tomorrow, and, due to the pace at which the bill was pushed through Congress, many of our Congressional leaders are unaware of this harmful provision. We ask that, as our legislators work to pass meaningful tax reform this week, they amend the final tax bill to exempt Puerto Rico from burdensome foreign taxes. The tax bill that has been designed explicitly to boost American business must not stifle the recovering Puerto Rican economy.
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About the USHCC
The USHCC actively promotes the economic growth, development and interests of more than 4.4 million Hispanic-owned businesses, that combined, contribute over $700 billion to the American economy every year. It also advocates on behalf of 260 major American corporations and serves as the umbrella organization for more than 200 local chambers and business associations nationwide. For more information, visit ushcc.com. Follow us on Twitter @USHCC.