WASHINGTON (Gray DC) -- “What we’re asking for is equal treatment," Puerto Rico Governor Ricardo Rossello said.
Rossello was back in Washington D.C. Monday. He was urging Congress to consider the island in the federal tax reform bill, which is moving closer to a vote in the House.
“The work we do in Congress to educate members and to have the resources that the people of Puerto Rico need at this time," Rep. Jennifer Gonzalez (R-Puerto Rico- At Large) said.
Rossello joined by Congresswoman Gonzalez said, as the tax plan stands, it would lead to the exodus of companies from the Island.
Those against the proposal add it’s the last thing the Island needs, as it is still recovering from devastating hurricanes.
“Basically be a second hurricane on our economy right now," Hector Ferrer, President of the Popular Democratic Party in Puerto Rico said.
Hector Ferrer is the President of the Popular Democratic Party in Puerto Rico. That's a different party than Governor Rossello. But Ferrer said this is an issue the two see eye to eye on.
“It will make a huge devastation on Puerto Rico’s economy around 40% of our economy is based on industrial and corporate production," he added.
Ferrer said because Puerto Rico is treated as a foreign company under the U.S. tax code, this means when a company buys from its subsidiary in Puerto Rico it would have to pay 20% excise tax on every purchase. He said it will cost jobs and the islands’ competitive edge.
We reached out to the House Ways and Means Committee on the issue and received this statement from a spokesperson.
“The Tax Cuts and Jobs Act modernizes our tax system and creates a level playing field for U.S. companies competing internationally, including those operating in Puerto Rico. The bill also includes tough but fair rules to prevent companies from shifting profits out of the U.S. in an attempt to avoid U.S. taxes. With these rules, Puerto Rican companies are treated exactly the same as other operations that benefit from the modern, competitive tax system provided by the bill.”
Ferrer, Rossello and Gonzalez will spend this week meeting with lawmakers, encouraging them to change this part of the tax plan. But the clock is ticking members of the House are looking to pass their version of the bill as soon as Thursday.