To amend the Internal Revenue Code of 1986 to allow certain credits and deductions to be taken as a refundable tax credit by Puerto Rico businesses or residents, and to extend such credits and deductions to possessions of the United States.
Impact
If enacted, HB 4026 is expected to significantly alter the fiscal landscape for Puerto Rico and other U.S. possessions. By allowing refundable tax credits, the bill seeks to promote investments and attractiveness of these territories for business operations. This could potentially result in increased economic activity and job creation within the territories affected. The allocation of funds to cover any possible losses incurred by the territories due to these credits further underlines the bill’s commitment to stimulate economic conditions that reflect those in the mainland United States.
Summary
House Bill 4026 aims to amend the Internal Revenue Code of 1986 to introduce provisions that allow certain credits and deductions to be claimed as refundable tax credits by businesses and residents in Puerto Rico. This legislation is designed to extend similar financial incentives to U.S. possessions, thereby aiming to enhance economic growth particularly in these regions. The proposed changes are intended to ease the financial burden on residents and encourage local businesses by making tax credits more accessible.
Contention
While the bill presents numerous potential benefits, it may face scrutiny and opposition from various stakeholders, particularly concerning its fiscal implications on federal and local government budgets. There could be concerns about the sustainability of funding these refundable credits over the long term, especially in a politically sensitive context where financial resources and economic viability are critical. Additionally, establishing a 'mirror code tax system' for U.S. possessions could introduce complications regarding tax administration and compliance, raising questions among tax policymakers and administrators.
To amend the Internal Revenue Code of 1986 to increase the amount of the child tax credit, to make such credit fully refundable, to remove income limitations from such credit, and for other purposes.
To amend the Internal Revenue Code of 1986 to allow elective payment of applicable credits to bona fide residents of and entities organized under the laws of Puerto Rico.
To amend the Internal Revenue Code of 1986 to establish a refundable tax credit for individuals for amounts paid for gas and electricity for primary residences.
To amend the Internal Revenue Code of 1986 to make a portion of research credit refundable for certain small businesses engaging in specified medical research.
Reforms the organizational structure for the Department of Transportation and Development including its duties, powers, and responsibilities of officers and employees (EN INCREASE SD EX See Note)