CRIM plans to present substitute inventory tax legislation to Legislature this month
By The Star Staff
Legislation that would replace the nearly $240 million inventory tax is slated to be presented to the island Legislature in mid-March, Municipal Tax Revenue Collections Center (CRIM by its Spanish acronym) Executive Director Reinaldo Paniagua Látimer said Tuesday.
The figure represents 55% of the tax collected from personal property and is a key source of income for municipalities. However, the business sector contends it is losing money because of the tax.
CRIM’s governing board will evaluate the bill’s text on March 9. If it gets the board’s green light, the entity will share it with legislative leaders.
The New Progressive Party-controlled Mayors Federation discussed the inventory tax at its regular meeting.
“The elimination of the inventory tax is not being considered. However, the modification of this tax is being considered,” Paniagua Látimer told the press. “The claim made from the start by the business sector was to eliminate the recurrence of the payment of this tax for the same item year after year, and that is being addressed.”
Paniagua Látimer indicated that an item or piece of merchandise will pay the tax only once, which is when it is sold.
“Another thing that we are doing is that we are suggesting that, in a base year, by mutual agreement what the business pays in inventory tax year after year be frozen so that the business knows how much it is going to pay and the municipality knows how much it is going to receive,” Paniagua Látimer said without specifying how the tax would be collected if an item were only taxed on a single occasion.
Paniagua Látimer stressed that it is not correct that the inventory tax is somehow contributing to a lack of any material goods or food on the island.
“All our analysis and the information reach the same conclusion: this tax is paid by 80%; around 80 companies in Puerto Rico,” he said.
The CRIM director said small businesses participate in the voluntary chain with standard storage. The inventory is exempted from taxes until it is placed on the businesses’ shelves.