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Article: SPECIAL FOCUS ON PUERTO RICO - SECTION 936 PHASE-OUT
- Article from:
- Caribbean Update
- Article date:
- September 1, 1996
CopyrightCOPYRIGHT 1996 Caribbean Update, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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In an historic moment for Puerto Rico, both the U.S. House and Senate on August 2 voted to eliminate the tax credit provided by Section 936 of the U.S. Internal Revenue Code, without retaining a permanent wage credit:
* Section 936 "provides an important economic development incentive for Puerto Rico, providing a particular impetus for the manufacturing sector," the influential Moody's Investors Service commented on August 7, noting that its elimination "could have long-term, negative effects on the island's economy";
* For U.S. corporations doing business in Puerto Rico, Section 936 generally eliminates the U.S. tax on income related to their island ...