New York Representative Nydia Velázquez has introduced legislation to prevent investors from using Puerto Rico as a crypto tax haven. The proposed Fair Taxation of Digital Assets in Puerto Rico Act aims to change local laws to require certain investors to pay both local and federal taxes on capital gains from digital assets. According to Velázquez, the influx of crypto investors has negatively impacted Puerto Rico's economy by driving up housing costs and pushing out local residents, while costing the federal government billions in lost tax revenue. Since 2012, Puerto Rico has attracted crypto investors through tax exemptions under Act 60. Velázquez's office estimates the territory could lose $4.5 billion in revenue from 2020 to 2026 due to these incentives. In contrast, Puerto Rico's Governor has proposed a 4% capital gains tax for new applicants under Act 60, significantly lower than the typical rates in the mainland U.S. It remains uncertain whether Velázquez's legislation will receive sufficient support in the Republican-controlled House or Senate.

Source 🔗