Puerto Rico: AMT changes held unconstitutional | KPMG | US

Puerto Rico: AMT legislative changes held unconstitutional; injunction issued

Puerto Rico: AMT changes held unconstitutional

The U.S. District Court for the District of Puerto Rico issued an opinion and order concluding that certain legislative changes made under Act 72 to the commonwealth’s minimum alternative corporate income tax (or AMT) regime—in this instance, subsections adding new graduated rates for the AMT’s tangible-property tax and affecting the expenses tax in the Puerto Rico tax law—were in violation of federal constitutional and statutory law.


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The federal district court issued an injunction against collection of the AMT tangible-property tax and the expenses tax, with the injunction having immediate effect and thus stopping all collection and enforcement of the AMT under the applicable subsections.

The case is: Wal-Mart Puerto Rico, Inc. v. Zaragoza-Gomez, No. 3:15-CV-03018 (JAF) (D. P.R. March 28, 2016).  Read the federal district court’s 109-page opinion [PDF 578 KB]

A follow-up report from KPMG LLP will provide more details about this 109-page opinion and order from the federal district court.

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