Puerto Rico Sales Tax Revenue Bonds

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The Puerto Rico Sales Tax Revenue Bonds (commonly known as COFINA bonds) are government bonds issued by the Urgent Interest Fund Corporation (COFINA) 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 ("Pledged Sales Tax").^[1]^[2]^[3]

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. Law No. 91 of 2006 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.

References

Government finances in Puerto Rico

Accounting	Budget Debt crisis Government budget balance Public debt

Assets	Consolidated Fund General Fund Public Improvements Fund Special State Funds

Bond issuers	AFI AFICA Authority for the Financing of Housing Authority for the Financing of the Infrastructure of Puerto Rico COFIM COFINA Government Development Bank Municipal Financing Agency Public Financing Corporation

Bonds	Bonds issued by Puerto Rico Puerto Rico Sales Tax Revenue Bonds

Other agencies	Department of Economic Development and Commerce Department of Treasury Economic Development Bank Office of Management and Budget Planning Board Public-Private Partnerships Authority

Taxation	Internal Revenue Code Sales and Use Tax Taxation in Puerto Rico

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