[20001004]RS20695_波多黎各经济活动税收抵免：当前提案和计划淘汰.pdf

1 American Samoa, Guam, Northern Marianas, Puerto Rico, and the U.S. Virgin Islands. Congressional Research Service ? The Library of CongressCRS Report for CongressReceived through the CRS WebOrder Code RS20695October 4, 2000The Puerto Rican Economic Activity Tax Credit:Current Proposals and Scheduled PhaseoutDavid L. BrumbaughSpecialist in Public FinanceGovernment and Finance DivisionSummaryU.S. firms have long received a tax benefit for operations in Puerto Rico and otherU.S. possessions; the benefits purpose is to generate employment-creating investmentin the possessions. Prior to 1996, the provision was known as the Possessions TaxCredit and was provided under section 936 of the Internal Revenue Code. In the yearsfollowing World War II, the government of Puerto Rico depended on the credit and itsown set of tax benefits to attract investment to Puerto Rico from the U.S. mainland. Thetax benefit and the inflow of investment it stimulated helped transform the Puerto Ricaneconomy from one based on agriculture to one based on manufacturing, services, andtrade. However, the credit was criticized on several grounds: that it had a high revenuecost compared to its employment effect; tha