I just added a new article to my JD Supra site “From Nuyorican to Puerto Rican”. The thinking is that there are a lot of U.S. citizens of PR ancestry living in the NY metropolitan area. In some cases, the parents came from the PR 30 or more years ago. Some of the children and grandchildren and great grandchildren may struggle to speak Spanish. Nevertheless, the tax incentives implemented by the PR government are enough to make someone of PR descent to seriously consider a reverse migration to the land of their forefathers – La Isla Del Encanto. If you are a New Yorker of PR descent being taxed at a 50 percent bracket in New York or New Jersey, the tax planning opportunity may be very compelling.
I continue to get a steady trickle of calls from people all over the country asking whether moving to the PR would make sense. In cases where the taxpayer has primarily investment income – short and long term capital gain income and interest income or dividends that are not U.S. sourced – the taxpayer would essentially have tax-free income for both federal and Puerto Rican purposes. For a service oriented business that is based in the PR but doing business outside of the PR, you are looking at taxation at a 4 percent rate.
If I were a Nuyorquino being taxed at a combined federal, state and city rate of 50 percent. It would not take too much convincing to say – ” Honey, back the bags!
Remember to count your blessings today!