Puerto Rico Sales Tax Revenue Bonds
The Puerto Rico Sales Tax Revenue Bonds are government bonds issued by the Urgent Interest Fund Corporation to pay the extraconstitutional public debt of Puerto Rico. The bonds are primarily used to provide funds to the government of Puerto Rico to repay certain debt obligations to the Government Development Bank and the Public Financing Corporation. They are issued under resolutions adopted by COFINA's board of directors will be payable from and secured by a security interest created by the Resolution in a specified portion of the Puerto Rico Sales and Use Tax.
Legislation enacted in 2006 approved for the first time in Puerto Rico a sales and use tax of 5.5% for the benefit of the central government, and a separate 1.5% for the benefit of municipalities of Puerto Rico. also created a dedicated sales tax fund, to be held and owned by COFINA separate and apart from the government's general fund, and provided, among other things, that each fiscal year the first receipts of the government's Sales and Use Tax, in the amount specified in the law, be deposited in this special dedicated fund and applied to the payment of the Sales Tax Revenue Bonds.
