“Para enmendar el inciso (g) de la Sección 1101.01 de la Ley 1-2011 mejor conocida como “Código de Rentas Internas de Puerto Rico de 2011”, según enmendado, a los fines de establecer que, si la solicitud de exención contributiva de una entidad sin fines de lucro no es evaluada dentro de un período de sesenta (60) días desde su radicación con toda la documentación requerida, se otorgará automáticamente una exención provisional por un (1) año; y para otros fines relacionados.”

2025-2028 Session

PS 444 auto-grants a 1-year provisional nonprofit tax exemption if Hacienda doesn't evaluate a complete exemption request within 60 days, reducing uncertainty for nonprofits.

Referido a Comisión(es)

Summary — PS 444

Title (Spanish): Para enmendar el inciso (g) de la Sección 1101.01 de la Ley 1-2011 mejor conocida como “Código de Rentas Internas de Puerto Rico de 2011”, según enmendado, a los fines de establecer que, si la solicitud de exención contributiva de una entidad sin fines de lucro no es evaluada dentro de un período de sesenta (60) días desde su radicación con toda la documentación requerida, se otorgará automáticamente una exención provisional por un (1) año; y para otros fines relacionados.

Overview / Purpose

PS 444 would modify Subsection (g) of Section 1101.01 of Puerto Rico’s Internal Revenue Code (Law 1-2011) to create a firm administrative timeline for tax‑exemption applications filed by nonprofit (sin fines de lucro) entities. If the Treasury Department (Departamento de Hacienda) does not evaluate a complete exemption application within 60 days of filing, the applicant would automatically receive a provisional tax exemption valid for one (1) year.

Key provisions

Amends inciso (g) of Sección 1101.01 (Law 1-2011).

Establishes a 60‑calendar‑day evaluation period for exemption applications submitted with all required documentation.

If the Department of Treasury fails to evaluate within 60 days, an automatic provisional exemption is granted for one year.

Language includes typical catch‑all “y para otros fines relacionados” (other related purposes); bill text will govern specifics (e.g., definitions, conditions).

Who is affected

Primary: nonprofit organizations applying for tax‑exempt status in Puerto Rico.

Administrative: Puerto Rico Department of Treasury, which must process applications within defined timelines and may need to adjust procedures/staffing.

Secondary: Government revenue (potential short‑term reduction in collections) and donors/contractors relying on organizations’ exempt status.

Potential impacts and considerations

Benefits: reduces uncertainty and operational disruption for nonprofits awaiting exemption; may accelerate access to tax benefits and donor confidence.

Risks: provisional exemptions could be granted to ineligible entities if post‑grant reviews/audits are insufficient; potential short‑term fiscal impact if provisional exemptions delay revenue collection.

Implementation needs: clear definition of “evaluated” and “complete with all required documentation,” procedures for rescinding or confirming provisional exemptions, audit/recapture rules, and IT/staffing adjustments at Hacienda.

Legislative status & timeline

Introduced (radicado): March 24, 2025

Senate actions: First reading March 31, 2025; referred to committee; committee report 1er Informe rendered April 10, 2025; placed on Special Orders calendar April 10; approved without amendments and passed final Senate vote April 10, 2025; final approval text sent to the House April 10, 2025.

House actions: Appeared in first reading April 28, 2025; referred to committee(s) April 28, 2025.

Current status: Referred to committee(s) in the House for further consideration.

Bill