The Tourism Development Act of Puerto Rico of 2010 (Act 74) provides incentives for tourism businesses. This act covers hostels, guesthouses, hotels, condo-hotels, and timeshares/vacation clubs. In addition it includes theme parks, golf courses, marinas for tourism, however casinos are excluded.
The Act also establishes a tax credit of the minimum of 10% of the total cost of the project or 50% of equity invested (including land). The credit is made available over a two year period. Any unused tax credits may be carried forward. Additionally, the tax credits may be assigned, transferred or sold.
In order to qualify, a business must be utilizing new facilities, substantially improved facilities or existing facilities which have not been used for three or more years.
There are more rules and this post contains simplifications and is not comprehensive. Additionally, as always, a professional should be consulted and be presented with specific information.
The information on this website is general information and is for educational use only and has not been verified for accuracy nor completeness. You, the reader, should further research your specific individual situation. In addition you should contact your accounting professional for professional advice derived from specific details from your structure and financial position.
IRS CIRCULAR 230 DISCLOSURE:
To comply with requirements imposed by the Department of the
Treasury, we inform you that any U.S. tax advice contained in this post (including any
attachments) is not intended or written by the practitioner to be used, and that it cannot be used by any
taxpayer, for the purpose of (i) avoiding penalties that may be imposed on the taxpayer, and (ii)
supporting the promotion or marketing of any transactions or matters addressed herein.