Puerto Rico Senator Héctor Joaquín Sánchez Álvarez, who represents Carolina District, has introduced Senate Bill 1516 to adjust annually for inflation the $1,500 income tax deduction available to veterans in Puerto Rico. He announced the filing alongside a group of veterans who supported the proposal, and said the bill was introduced at the request of a group of veterans from Carolina District.
Sánchez Álvarez said the deduction was established in 2007 and has remained unchanged since its enactment, reducing its purchasing power as the cost of living has increased. "With this bill, we seek to adjust the value of the deduction to reflect increases in the cost of living. Nearly 20 years have passed since this benefit for veterans was approved, and we believe it is time to deliver justice to those who served in the Armed Forces," he said.
Under the bill, the secretary of the Puerto Rico Department of the Treasury would determine the adjusted deduction amount for each tax year and notify taxpayers through an administrative determination, circular letter or informational bulletin. To calculate the adjustment, the department would use the annual cost-of-living adjustment applied by the federal Internal Revenue Service as a reference.
If the measure becomes law, the Treasury Department would have 90 days to adopt or amend the regulations needed to implement the changes. The bill would amend Act 203-2007, known as the New Bill of Rights of the Puerto Rican Veteran of the 21st Century, which established the existing deduction.