P.R. Laws tit. 13, § 10656
(a) General rule. — A succeeding business may avail itself of the provisions of this chapter, provided:
(1) The preceding tax-exempt business has not ceased operations for more than six (6) consecutive months before the succeeding business files the application for exemption, or during the exemption period of the succeeding business, unless such an action is due to extraordinary circumstances.
(2) The preceding tax-exempt business maintains its annual average as to the annual average employment for the three (3) taxable years which end with the closing of its taxable year preceding the filing of the application for exemption by the succeeding business, unless said average cannot be maintained due to extraordinary circumstances.
(3) The number of jobs of the succeeding business, after its first year of operations, is greater than twenty-five percent (25%) of the annual average employment of the preceding business referred to in clause (2), above.
(4) The succeeding business does not use physical facilities, including land, buildings, machinery, equipment, inventory, supplies, trademarks, patents, marketing outlets with a value of fifty thousand (50,000) dollars of more, and have been previously used by a preceding tax-exempt business. The above shall not apply to additions to property devoted to industrial development, even when such additions constitute physical facilities with a value of fifty thousand (50,000) dollars or more and are being or have been used by the main unit or the preceding tax-exempt business. The preceding notwithstanding, the Secretary of Development may determine, with the previous recommendation of the agencies that render reports on tax exemption, that the use of physical facilities or the acquisition of any industrial unit of a preceding tax-exempt business which is or was operating, serves the best economic and social interests of Puerto Rico, vis-à-vis the nature of such facilities, the total number of jobs, the sum of the payroll, the investment, the location of the project, or other factors which in his/her judgment warrant such a determination.
(b) Exceptions. — The provisions of subsection (a) of this section notwithstanding, the conditions thereof shall be deemed to have been met, provided:
(1) The succeeding business assigns to the preceding tax-exempt business, that part of the annual employment as necessary so that the annual employment of the preceding tax-exempt business is maintained, or equals the annual employment that said preceding tax-exempt business should maintain. The assignment provided herein shall not be covered by the decree of the succeeding business, but the latter shall enjoy, with respect to the part so assigned, the benefits provided for in this chapter, if any, which the preceding tax-exempt business would enjoy on the same, as if it had been its own annual production. If the exemption period of the preceding tax-exempt business has expired, the succeeding business shall pay the corresponding taxes on the part of its annual production assigned by the preceding tax-exempt business.
(2) The succeeding business declares as uncovered by its decree, for property tax purposes, that part of its facilities which is necessary in order for the investment in the physical facilities of the preceding tax-exempt business to be maintained or to be equal to the total investment in physical facilities as of the closing of the fiscal year of such a preceding tax-exempt business, prior to the date of filing the application for tax exemption of the succeeding business, minus the depreciation thereof and minus any reduction in the investment in physical facilities that has occurred as of the date on which the provisions of this clause are exercised, as the result of an authorization to use the same under the provisions of subsection (a)(4) of this section. In cases in which the exemption period of the preceding tax-exempt business has not elapsed, the succeeding business shall enjoy the benefits provided for in this chapter which would have been enjoyed by the preceding tax-exempt business, with respect to the part of its investment in said physical facilities which for purposes of this subsection, it declares to be uncovered by its decree, if the aforementioned facilities had been used in the production of its industrial development income.
(3) The Secretary of Development determines, with the previous recommendation of the agencies that render reports on tax exemption, that the operation of the succeeding business serves the best economic and social interests of Puerto Rico, vis-à-vis the nature of the physical facilities, the number of jobs, the total sum of the payroll, the investment, the location of the project, or any other factors which in his/her judgment warrant such a determination, including the financial situation of the tax-exempt business in particular, and totally or partially relieves from compliance with the provisions of subsection (a) of this section, being empowered to condition its operations, as convenient or necessary to serve the best interests of Puerto Rico.
History —May 28, 2008, No. 73, art. 1, § 16, eff. July 1, 2008.