House Approves Doubling Traffic Fines, Collecting Tax on Online purchases
SAN JUAN—In a party-line vote Monday, the Puerto Rico House approved two of the bills that support Gov. Ricardo Rosselló’s fiscal plan. These were House bills 939 and 849, which double traffic fines and seek collecting the sales and use tax (IVU by its Spanish acronym) on online purchases, respectively.
The first bill would generate an estimated $56 million a year through the higher fines and a 10% increase to the cost of the marbete, the vehicle-emissions and cumpolsory insurance certification sticker; while the second is estimated to reach up to $55 million a year in new revenue. For the latter, the initial estimate pegged the online IVU revenue at $125 million a year, but the number was revised following a public hearing.
House Transportation and Infrastructure Committee Chairman José Luis Rivera Guerra presented H.B. 939 and said he seeks to clarify language in Act 22 of 2000, known as the Puerto Rico Vehicle and Traffic Act, to improve road safety. If enacted, the fine for parking illegally in a disabled-parking spot would cost $1,000 compared with the current $500.
“This bill is not designed to raise money, to raise funds, to balance the budget, to provide increased revenues for the fiscal oversight board. What I want is more control on the roads, that there be fewer lives lost to traffic accidents… Do not commit violations, that there is zero money from fines,” Rivera Guerra said during the debate.
However, for the deputy speaker of the Popular’s Democratic Party (PDP) in the House, Ramón Cruz Burgos, the measure “is not meant to correct behavior on the road,” but rather to “pay the debt, to pay the fiscal plan, to fulfill what they promised, what was certified by the board.” Puerto Rican Independence Party (PIP) Rep. Denis Márquez also backed the statements.
Meanwhile, House Treasury Committee Chairman Antonio “Tony” Soto introduced House Bill 849 and explained that the measure not only supports the fiscal plan, which indicates that this tax will provide $44 million, but also puts the same tax burden of businesses on the island to those abroad.
Companies without a presence in Puerto Rico, many of which have evaded the IVU’s collection in the past years, could become “withholding agents” if they reach an agreement with the Treasury Department to avoid filing three reports or notifications imposed by this legislation. Were they not to agree to this, they would have to notify the customer that the merchandise purchased online is subject to taxation, produce a quarterly report of the products and sales, and an annual report of the products sold. That way, the taxpayer could be responsible for paying Treasury the IVU directly.
“[The measure] does not impose an additional tax, rather it enables these companies [not located on the island] to reach agreements with the Treasury Department to collect what should always have been collected,” Soto stated.
For PDP Rep. Jesús Santa, the bill is “one more tax […] instead of “instead of cutting public spending, having austerity in government agencies” or maintaining “fiscal control.” He added that in the previous administration, legislation was introduced to collect IVU from Internet purchases, but the New Progressive Party (NPP) voted against it.
Márquez objected to the bill and said the problems for collecting the IVU online again demonstrate a colony’s power limitations.
Code of Ethics Approved
The lower chamber approved House Resolution 348, with three abstentions and two votes against. It establishes the Code of Ethics of that legislative body.
House Speaker Carlos “Johnny” Méndez authorized the abstention of PDP Reps. Manuel Natal, Luis Vega Ramos and Luis Raúl Torres because they do not feel they are part of the caucus of the party’s delegation in that legislative body. He did not authorize, however, the abstention of PDP Reps. Javier Aponte Dalmau and Carlos Bianchi Angleró, thus, they voted against the measure.
It was Aponte Dalmau who expressed a series of objections to the new cod because it eliminates the element that to file a complaint, the complainant must have personal knowledge of the issue.
“We are opening the door for gossip against any one of us [to become a complaint],” he said.