Secretary of state calls meeting to seek alternatives to inventory tax

Puerto Rico Secretary of State Rosachely Rivera Santana

By THE STAR STAFF

Secretary of State Rosachely Rivera Santana announced Monday that she will convene a meeting today with Gov. Jenniffer González Colón, the Puerto Rico Mayors Federation and representatives from the private sector with the goal of reaching a consensus on possible alternatives for replacing the inventory tax.

Rivera Santana noted that private companies have several proposals to present and emphasized that all perspectives will be carefully evaluated.

“Municipalities are very important for providing direct services to the people, and continuing to eliminate funds they already receive creates a situation where the government must identify how those resources can be replaced,” stated the former mayor of Gurabo.

The discussion comes amid a heated debate over Puerto Rico’s inventory tax, a levy on the value of goods held by businesses that municipalities rely on for revenue. Earlier this year, House Bill 420 sought to freeze and eventually eliminate the tax, a move strongly supported by the private sector, which argues that the tax inflates costs, discourages inventory stocking, and undermines competitiveness. Business leaders claim its repeal would strengthen supply chains and reduce shortages during emergencies.

However, the governor vetoed the bill in October, citing fiscal concerns. Eliminating the tax without a replacement would leave municipalities with a $314 million shortfall, threatening essential services. Mayors have warned that any repeal must include a viable substitute to protect local budgets, while business groups continue to push for reform, calling the tax outdated and burdensome compared to most U.S. jurisdictions. González Colón has since tasked Rivera Santana with leading efforts to identify alternative revenue sources and build consensus among stakeholders.