Wal-Mart Puerto Rico, Inc. filed a suit against the U.S. Commonwealth of Puerto Rico to combat legislation aimed at battling crippling debt on the island. The legislation would more than triple the rate for American corporate subsidiaries that import goods.
Wal-Mart is the only corporation on the island affected by the new tax, as it is the only one which collects over $2.75 billion in gross revenue. Act 72-2015, raises the tax from 2 percent to 6.5 percent, and requires Wal-Mart to pay “an astonishing and unsustainable 91.5 percent of its net income,” according the the suit.
Lawyers representing Wal-Mart in the suit are requesting a federal judge declare the tax unconstitutional.
“No business can operate for long in an environment where 91.5 percent of its net income is confiscated through taxes. No government should be permitted to drive a company — the largest private employer — out of business through a special tax applicable at its highest rate only to that company,” said the company in the suit, reports the International Business Times.
Wal-Mart is the largest employer on the island, which has an unemployment rate of 12.4 percent, over double that of the U.S. states. (RELATED: Wal-Mart Cuts Hours After Raising Wages)
The annual percentage growth rate of Puerto Rico’s GDP has been dropping steadily since a high of 1o percent in 2000. This year, the island reported a sub-zero percentage rate. Their total GDP in 2013, the most recent year for data, was $103 billion — four times lower than Wal-Mart’s total earnings.
Titled Wal-Mart Puerto Rico Inc. v. Zaragoza-Gomez, 15-cv-3018, U.S. District Court, District of Puerto Rico (San Juan), the suit was filed Friday.
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