In the aftermath of Hurricane Maria's catastrophic impact on Puerto Rico, in order to assist in rebuilding and recovery, Puerto Rico's governor and several agencies have issued multiple exemptions to previously established rules for operations, as well as extensions to multiple deadlines.1 Highlighted below are some of these exemptions and extensions. Given the scope of the damage caused by María, it is likely that additional exemptions and extensions will be approved in the coming weeks and months.
Office of the Governor
Executive Order 2017-053 (OE-2017-053), issued on September 28, 2017
This executive order:
- Temporarily exempts contractors of any agency or public corporation, and any entity of the executive branch, from complying with multiple requirements for performing government contract work.
- Temporarily exempts government agencies, instrumentalities, public corporations and Puerto Rico executive branch entities, from complying with various requirements for leasing real estate from private parties, as long as contracts expire on or before June 30, 2018.
- Exempts individuals or companies engaged in the business of construction (including remodeling, modifying, altering, installing or performing essential repairs to residential structures, as well as those who, directly or indirectly, administer or direct such work) from having to register with the Contractors' Register mandated by Puerto Rico's Consumer Affairs Department ("DACO" for its Spanish acronym) in its Regulation No. 8172.
- Exempts individuals who possess a Puerto Rico driver's license in categories 6, 7, 8 or 9, from having to obtain a certification to transport fuel (such as gasoline, diesel and other petroleum-based products) through Puerto Rico's roads, provided they obtain a special dispensation from the U.S. Transportation Department.
- Authorizes the entry of any fuel transportation vehicles into any fuel distribution center.
- Orders the Puerto Rico Treasury to exempt fuel transportation vehicles from tax payments, subject to certain requirements. In addition, this executive order directs the PR Treasury and the Ports Authority to ensure expeditious entry of these vehicles into ports, and orders the Public Service Commission and the Environmental Quality Board to suspend certain permit requirements for fuel and generator transportation vehicles.
Department for Consumer Affairs ("DACO" for its Spanish Acronym)
Administrative Order 2017-014, issued on October 3, 2017
This administrative order:
- Extends until December 31, 2017 the validity of all DACO-issued licenses, permits and certifications that expired on or after September 18, 2017.
- Extends until December 31, 2017 the validity of DACO-issued seals of approval to any machine used for measurement and weights requiring verification that expired on or after September 18, 2017.
- Exempts for 90 days diesel and gasoline suppliers (dispensers) that are available and in suitable condition to be used from obtaining the required DACO-issued seal of approval.
Planning Board and Permits Office
Administrative Order 2017-07 (OGPe 2017-07), issued on October 6, 2017
This administrative order exempts all recovery efforts and essential activities from ordinary construction permits and tax payment processes for 120 days from the date of the issuance of the order. Under this administrative order:
- Entities seeking to rebuild or repair Puerto Rico's infrastructure and improve basic needs are exempted from having to obtain and file certain construction and urbanization permits. Parties wishing to benefit from this administrative order must file a request for environmental compliance describing the construction to be performed related to infrastructure reconstruction and repair.
- All requests for construction permits are exempt from the payment of permit filing fees and taxes.
- All work to be performed must have the corresponding construction plan certified by a licensed engineer or architect, and must comply with additional requirements.
- The order applies to applications related to government, commercial, industrial and institutional activities, industries and institutions that engage in providing basic needs, such as fuel, food (including food preparation), potable water and ice, transportation, medicines, medical and hospital services, telecommunications, production and sale of construction materials, and other related services, in connection with basic needs supply and attendance to the state of emergency.
Municipal Revenue Collection Center ("CRIM" for its Spanish Acronym):
Administrative Order No. 2017-002
This administrative order delays until December 31, 2017 the payment of interest, surcharges and penalties for real property tax payments due from September through December 31, 2017. This moratorium applies to the real property tax payment corresponding to the first quarter of fiscal year 2017-2018. Payments that were already in default at the time of the emergency will not accrue interest for the period from September 21 to December 31, 2017. In addition, this moratorium applies to payments that are being made based on previous amnesty programs and payment plans. For payment plans, the months included in this moratorium will be added to the end the payment plan period.
Puerto Rico Treasury
Internal Revenue Informative Bulletin No. 17-21 ("IB 17-21"), issued on September 27, 2017
This bulletin extends multiple tax-related due dates as a result of Hurricane María. For taxpayers that are not considered "large taxpayers"2:
- Returns or declarations, including extensions with corresponding payments, due from September 19, 2017 to October 20, 2017, are postponed for an additional 20 calendar days.
- Payments or tax deposits due between September 19, 2017 and October 20, 2017 are postponed for an additional 20 calendar days.
- Returns, payments or declarations for which the original due dates were postponed by Internal Revenue Circular Letter No. 17-13 ("CL 17-13"), Internal Revenue Informative Bulletin No. 17-17 ("IB 17-17") or Internal Revenue Informative Bulletin 17-18 ("IB 17-18"), are automatically postponed for an additional 20 calendar days.
- Notwithstanding, any businesses that wish to file the Declaration of Imports (Form AS 2970.1), the Tax on Imports Monthly Return (AS 2915.1D), the Sales and Use Tax Monthly Return (Form AS 2915.1), or pay the sales and use tax ("SUT") within their corresponding deadlines can do so through SURI at https://suri.hacienda.pr.gov.
With respect to large taxpayers, the 20-calendar-day extension discussed above will be applicable to all returns, statements and payments, except:
- Any transaction that is made through SURI in connection with the SUT due during the months of September and October 2017, including but not limited to the filing and payment of (i) the Tax and Imports Monthly Return (Form AS 2015.1D (SC 2915 D)); (ii) the Sales and Use Monthly Return (Form AS 2915.1) (SC 2915); and (iii) the SUT bi-monthly installments. Such transactions are extended for an additional seven calendar days from the extension already provided in CL 17-13, IB17-17 and IB 17-18.
- Excise Tax payments over the acquisition of certain services and personal property acquired pursuant to PR Code Section 3070.01 corresponding to the months of August and September, 2017, are postponed until October 6, 2017 and October 20, 2017, respectively.
PR Treasury Requests for Information
Any request for information by the PR Treasury, including but not limited to requests for information for regular audits and audits by mail under Internal Revenue Circular Letter 17-12, has been postponed for 30 calendar days following the due date of the request. This postponement does not apply to taxpayers who received a request for information through a form SC 6048 (Request for Information of Tax Credits Reported on Form 480.71), which already is subject to a two-week extension of the time to submit the requested documents due to the issuance of IB 17-21 on September 27, 2017.
For audits through the mail, the 30-calendar-day extension is in addition to the 5-calendar-day extension provided in Internal Revenue Bulletin No. 17-16.
This 30-calendar-day extension applies only to responses to requests due during the months of September and October 2017.
Tax Rehabilitation Plan
The PR Treasury will not impose fines, interest or penalties for any default by the taxpayer with respect to a Payment Plan Agreement under the Tax Rehabilitation Plan during the period of September 1, 2017 through December 31, 2017. This applies to payment plans with the PR Treasury in effect as of September 1, 2017.
Internal Revenue Licenses
Taxpayers with licenses renewal fees due during the month of September or October 2017, will not have to renew them during this period. Licenses will remain in effect provisionally for an additional two months from the date the license fees were due.
IB 17-21 also provides that any other document or requirement made with the PR Treasury that was not specifically provided in IB17-21, will have an additional 30-calendar-day extension.
Administrative Determination No. 17-28 issued on October 3, 2017
This administrative determination extends the due dates for the filing of administrative complaints or appeals under the Puerto Rico Uniform Administrative Procedure Act, and any information or documentation requested, which was due between September 5 and September 26, 2017 until October 26, 2017.
Internal Revenue Administrative Bulletin No. 17-24 issued on October 15, 2017
This administrative bulletin suspends tax liens against employees to satisfy any outstanding tax liability. Therefore, employers should cease making withholdings on wages, including those made as a result of a payment plan made by the employee with the PR Treasury.
U.S. Internal Revenue Service:
News Release PR 2017-02, issued on September 22, 2017
This document extends until January 31, 2018 certain filings, including Form 5500 and quarterly payroll returns otherwise due on or after September 17, 2017 and before January 31, 2018. There will be no penalties on deposits due on or after September 17, 2017, and before October 2, 2017, as long as the tax deposits are made by October 2, 2017.
1 For more information on hurricane-related assistance, see Mariela Rexach, Elizabeth Perez-Lleras, María E. Echenique-Arana, Vanessa Marzán, and Sashmarie Rivera, Hurricane Maria's Aftermath: Highlights of Available Government Assistance for Puerto Rico Residents, Littler Insight (Oct. 12, 2017).
2 Section 1010.01(a)(35) of the Puerto Rico Internal Revenue Code of 2011, as amended (the "PR Code") defines "Large Taxpayers" as those taxpayers who are engaged in trade or business in PR that satisfies at least one of the following requisites: (i) is a commercial bank or trust company; (ii) a private bank; (ii) a brokerage firm; (iv) an entity engaged in the telecommunications business; (v) an insurance company; or (vi) an entity whose volume of business was 50 million dollars or more, for the previous tax year.
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