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Puerto Rico businesses fret tax hikes will erode profits – Yahoo Finance

SAN JUAN/NEW YORK (Reuters) – Business is tough enough already for Carlos Jimenez without having to face higher taxes. Fast Lane, his three-location car-wash chain in Puerto Rico, has laid off about half the 106 employees it had in 2007.

“Every year you take out two or three people, make your business leaner,” he said.

But starting in October, entrepreneurs like Jimenez will see their taxes rise to 11.5 percent on some business-to-business (B2B) dealings, and expand to include a 4 percent duty when using professional services such as accountants and lawyers. The sales tax also rose, from 7 percent to 11.5 percent, in July.

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