Public Law 101 (Law 101 hereafter) was approved in 2008 and is known as the Scientific Investigators Incentives Act. Law 101 is a unique tax incentive to foster research and development activity conducted at local universities in Puerto Rico, allowing qualified Principal Investigators or a Co-Principal Investigator to seek tax exemptions for salaries earned from eligible R&D research grants. The main objective of this incentive is to attract and retain competitive researchers to strengthen Puerto Rico’s performance in science and technology and the Island’s position in the knowledge economy.
To qualify for Law 101 incentive, the following eligibility criteria must be met:
Research Activity: The grant must be awarded:
- For the conduct of research, defined as creative work undertaken on a systematic basis and designed to increase the stock of knowledge in a particular science field.
- Through a contractual agreement between the Academic Institution and the granting agency (including federal, state or private entities that promote competitive scientific investigation) for the completion of specific research goals.
- Obtained competitively through programs that are open (unrestricted) to the general scientific community and that are subject to same evaluation scrutiny as, for example, NIH’s R01 grant mechanism.
- Only research grants received by Institutions of higher education, licensed by Puerto Rico’s Higher Education Council and accredited by the Middle States Association, will be eligible for tax exemption. The Institution may participate as prime recipient or as sub-awardee of the eligible grant.
Investigator Eligibility: The applicant researcher:
- Must have been a resident of Puerto Rico during the tax year under consideration.
- Employed by an Academic Institution, as defined by the law.
- Submitted a proposal as a Principal Investigator (PI) or Co-Principal Investigator (Co-PI) that resulted in a research award.