AP

Just as Puerto Rico is struggling to recover from the devastation of Hurricane Maria, Republicans have decided to impose another hardship on the island: A provision in the historically unpopular tax bill that treats Puerto Rico as a foreign country and taxes its businesses at a significantly higher rate than their U.S. counterparts.




“It is devastating and unconscionable that Congress would do this at this juncture,” Puerto Rican Governor Ricardo Rosselló told NBC News on Friday, as it became clear that the increased tax rate would remain part of the final bill.

At issue is a 12.5% “intangible assets” tax on American companies doing business in Puerto Rico, as well as a minimum 10% tax on company profits. Essentially, American businesses in Puerto Rico—a U.S. territory whose people are all United States citizens—are being taxed as if they were operating in an entirely foreign country.


“They are treating Puerto Rico as a foreign jurisdiction so they are levying a full tax,” Rosselló said.

Adding insult to very significant injury is the fact that even before Hurricane Maria decimated Puerto Rico, the island was around $70 billion in debt and suffering from crippling infrastructure failures—an untenable situation made exponentially worse by catastrophic storm damage and months of willful mismanagement by the Trump administration.

Durring a press conference with New Jersey Governor-Elect Phil Murphy last week, Rosselló insisted that the GOP tax bill would hurt half the island’s gross national product, nearly a third of its government revenue, and approximately a quarter of a million jobs.