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SCHEDULE B1 INDIVIDUAL

CREDITS FOR PURCHASE OF PRODUCTS MANUFACTURED

IN PUERTO RICO AND PUERTO RICAN AGRICULTURAL PRODUCTS

Rev. Feb 3 14

INSTRUCTIONS

PART I – CREDIT FOR INCREASE IN PURCHASES OF PUERTO RICAN

Enter in the spaces provided for each manufacturing business from which the

products were acquired the name, employer identification number, manufacturing

AGRICULTURAL PRODUCTS (SECTION 1051.07)

business identification number and the value (cost) of each purchase. In case of

manufacturing businesses with a tax exemption decree, the manufacturing business

Section 1051.07 of the Code provides a credit to all eligible business that increases

identification number will be the decree number. If the business does not have a

its purchases of Puerto Rican agricultural products to replace imported products

available for sale on the local market.

decree, enter the number assigned by the Industrial Development Company. Also

indicate if the manufacturer provided you with a certification to the effect that the

The credit shall not be less than 5% and up to a maximum of 20% of the increase

product(s) acquired are eligible products. Do not include purchases of products

that have been manufactured in Puerto Rico by a business related to the business

in purchases of agricultural products grown, produced and elaborated in Puerto

claiming the credit.

Rico during the taxable year in which the credit is claimed, over the average of

purchases of such products during the 3 preceding taxable years, or such part of

The eligible business must keep the necessary records evidencing the value of

that period that is applicable, or in some cases, the average of the 3 taxable years

ending with the close of the taxable year that ended during calendar year 2003.

purchases for which the credit is claimed, as well as, any certification issued by the

manufacturer or other evidence of the nature of the eligible products purchased.

For purposes of the credit under Section 1051.07, an eligible business is the one

that acquires Puerto Rican agricultural products through a contract between such

PART III - CREDIT FOR PURCHASE OF PRODUCTS MANUFACTURED IN

PUERTO RICO (TUNA PROCESSING) (SECTION 1051.09)

business, the Secretary of Agriculture and an Agricultural Production Group

promoted by the Department of Agriculture or an Agricultural Sector organized

The credit provided in Section 1051.09 of the Code is also available for purchases

under the Puerto Rico Agriculture and Livestock Industry Regulating Act or with a

of tuna packaged and processed in Puerto Rico. In this case, the credit is 10% of

Qualified Farmer.

the total amount of the purchases of such products made during the taxable year

in which it is claimed, regardless of the volume of business of the processing plant

Enter in the spaces provided, the name of each Agricultural Production Group,

Agricultural Sector or Qualified Farmer from which you made the purchases; the

or its affiliates. Tuna products are treated as manufactured (packaged and

processed) in Puerto Rico only if more than thirty (30) percent of its value has

number of each contract with the Department of Agriculture; the purchases increase;

the percentage granted; and the amount of each credit according with the Tax

been added in Puerto Rico.

Credit Certification issued by the Department of Agriculture.

Enter in the spaces provided, for each tuna manufacturing business (packaging

Line 2 - Enter the amount of credit under Section 1040F of the Puerto Rico

and processing) from which the products were acquired, the name, employer

identification number, manufacturing business identification number and the value

Internal Revenue Code of 1994, as amended, not used in previous years

(carryover) due to the 25% limitation. Submit a detailed schedule to reflect the

(cost) of each purchase. In case of manufacturing businesses with a tax exemption

decree, the manufacturing business identification number will be the decree number.

composition of the carryover.

If the business does not have a decree, enter the number assigned by the

PART II - CREDIT FOR PURCHASES OF PRODUCTS MANUFACTURED IN

Industrial Development Company. Also indicate if the manufacturer provided you

with a certification to the effect that the product(s) acquired are eligible products.

PUERTO RICO (SECTION 1051.09)

Do not include purchases of products that have been manufactured in Puerto Rico

by a business related to the business claiming the credit.

Section 1051.09 of the Code provides a credit against income tax of those eligible

businesses that purchase eligible products manufactured in Puerto Rico, including

component parts and accessories.

The eligible business must keep the necessary records evidencing the value of

purchases for which the credit is claimed, as well as any certification issued by the

The credit is equal to 10% of the increase in purchases of such products during

manufacturer or other evidence of the nature of the eligible products purchased.

the taxable year in which it is claimed, over the average of the purchases made for

Line 4 - Enter the amount of credits under Sections 1040C, 1040D and 1040E of

the 3 years out of the 10 preceding taxable years in which the purchases were

smaller, that is, excluding the 7 years of higher purchases.

the Puerto Rico Internal Revenue Code of 1994, as amended, not used in previous

years (carryover). Submit a detailed schedule to reflect the composition of the

Eligible businesses for purposes of the credit under Section 1051.09 are: (1)

carryover.

manufacturing businesses, and (2) any other company engaged in trade or business

PART IV - LIMITATION OF CREDITS FOR PURCHASES OF PRODUCTS

in Puerto Rico whose annual sales volume does not to exceed $ 5,000,000. However,

businesses that have a tax exemption decree are not considered eligible businesses.

MANUFACTURED IN PUERTO RICO AND PUERTO RICAN AGRICULTURAL

PRODUCTS

Eligible products are only those manufactured in Puerto Rico by a manufacturing

The credits provided in Sections 1051.07 and 1051.09 of the Code may only be

business that, individually or in the aggregate with its affiliates, has had a net sales

used to reduce 25% of the eligible business tax.

volume (within or outside of Puerto Rico) of one hundred million (100,000,000)

dollars or less for the calendar year 2010. A product will be considered as a

Submit evidence with the filing of this Schedule.

product manufactured in Puerto Rico only if more than thirty (30) percent of its

value has been added in Puerto Rico.

Schedule B1 Individual - Credit For Purchase Of Products Manufactured In Puerto Rico - 2014 Page 2

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