Schedule B1 Individual - Credits For Purchase Of Products Manufactured In Puerto Rico And Puerto Rican Agricultural Products - 2008 Page 3
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4SCHEDULE B1 INDIVIDUAL
CREDITS FOR PURCHASE OF PRODUCTS MANUFACTURED
IN PUERTO RICO AND PUERTO RICAN AGRICULTURAL PRODUCTS
Rev. 12.07
INSTRUCTIONS
PART I – CREDIT FOR PURCHASE OF PRODUCTS MANUFACTURED IN
Enter in the spaces provided for each manufacturing business from which you
PUERTO RICO (SECTION 1040C)
acquired the products, the name, employer identification number, manufacturing
business identification number and the value (cost) of each purchase. In the
Section 1040C of the Code provides a credit against the income tax to those
case of manufacturing businesses with a tax exemption decree, the manufacturing
manufacturing businesses (except those with a tax exemption decree) that
business identification number will be the decree number. If the business does
purchase products manufactured in Puerto Rico, including component parts
not have a decree, enter the number assigned by the Industrial Development
and accessories. The credit will be equal to 25% of the increase in the purchases
Company. The eligible business must keep the necessary records evidencing
of such products during the taxable year in which the credit is claimed, over the
the value of the purchases and the exportation of the products for which the
average of the purchases of such products during the previous 3 taxable
credit is claimed. Do not include purchases of products which have been
years, or that part of such period that may be applicable.
manufactured in Puerto Rico by persons related to the eligible business and
by manufacturing businesses which have, directly or through related persons,
The credit may be used to reduce up to 10% the tax of the manufacturing business.
an investment in the exterior in excess of $10,000,000. This exclusion will not
apply in case of purchases of products that have been manufactured in Puerto
Enter in the spaces provided for each manufacturing business from which the
Rico by businesses engaged in tuna processing.
products were acquired, the name, employer identification number, manufacturing
business identification number and the value (cost) of each purchase. In the
Line 3 – Enter the amount of the credit carried from previous years not used.
case of manufacturing businesses with a tax exemption decree, the manufacturing
Submit a detailed schedule showing the breakdown of said carry forward
business identification number will be the decree number. If the business does
credit.
not have a decree, enter the number assigned by the Industrial Development
Company. The eligible business must keep the necessary records evidencing
According to Section 1040D of the Code, as amended by Act No. 117 of July 4,
the value of the purchases for which the credit is claimed. Do not include
2006, the credit for purchase of products manufactured in Puerto Rico for
purchases of products that have been manufactured in Puerto Rico by
exportation will be claimed, in the first place, against the sales tax collected by
businesses related with the business claiming the credit.
the eligible business.
PART II – CREDIT FOR PURCHASE OF PRODUCTS MANUFACTURED
For additional details about how to claim the credit against the sales tax, see
IN PUERTO RICO FOR EXPORTATION (SECTION 1040D)
Section 1040D of the Code and its corresponding regulation.
Section 1040D of the Code provides a credit to every eligible business that
PART III – CREDIT FOR PURCHASE OF PRODUCTS MANUFACTURED
buys, directly or through related persons, products manufactured in Puerto
IN PUERTO RICO FOR LOCAL SALE AND CONSUMPTION (SECTION
Rico to be exported and sold outside of Puerto Rico for their use and consumption
1040E)
in the exterior.
Section 1040E of the Code provides a credit to every eligible business that buys
Eligible businesses are those engaged in trade or business in Puerto Rico
products manufactured in Puerto Rico and which are sold locally for their use or
which are not under any tax incentives act or similar acts.
consumption in Puerto Rico. The credit is 10% of the increase in the purchases of
products manufactured in Puerto Rico during the taxable year in which the credit is
The amount of the credit is based on the purchase value of products manufactured
claimed, over the average of the purchases of such products made during the
in Puerto Rico realized during the particular taxable year and which are exported
previous 3 taxable years, or that part of such period that may be applicable.
to be sold outside of Puerto Rico for their use or consumption in the exterior,
according to the following table:
Eligible business is every enterprise engaged in trade or business in Puerto
Rico whose annual sales volume does not exceed $5,000,000.
Value of purchases for the year
Amount of credit
This credit may be used to reduce up to 25% the tax of the eligible business.
10%
Not over $50 millions
Enter in the spaces provided for each manufacturing business from which you
$5 millions plus 8%
Over $50 millions
acquired the products, the name, employer identification number, manufacturing
but not over $100 millions
of the excess over $50 millions
business identification number and the value (cost) of each purchase. In the
case of manufacturing businesses with a tax exemption decree, the manufacturing
$9 millions plus 6%
Over $100 millions
business identification number will be the decree number. If the business does
but not over $150 millions
of the excess over $100 millions
not have a decree, enter the number assigned by the Industrial Development
Company. The eligible business must keep the necessary records evidencing
Over $150 millions
$12 millions plus 4%
the value of the purchases for which the credit is claimed. Do not include
but not over $200 millions
of the excess over $150 millions
purchases of products which have been manufactured in Puerto Rico by
persons related to the eligible business.
Over $200 millions
$14 millions
Line 6- Enter the amount of credit carried from previous years due to the 25%
limitation. Submit a detailed schedule showing the breakdown of said carry
forward credit.
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