SALES TAX 101 for PUERTO RICO

By December 3, 2018 Puerto Rico

The Sales Tax Basics Every Puerto Rico Business Should Know

What is Sales Tax in Puerto Rico?

The Puerto Rico Sales and Use Tax (SUT, Spanish: Impuesto a las Ventas y Uso, IVU) is the combined sales and use tax applied to most sales in Puerto Rico. The Sales Tax is the amount that the consumer pays when buying items, services or when attending an entertainment venue, be it sports, recreation or exhibition. The Use Tax is the amount that a person must pay when he introduces an article to Puerto Rico, for use and consumption in Puerto Rico.

Are All Goods and Services Taxable?

There are some exemptions to SUT for certain merchants due to Hurricane Maria. You can find more information here.

How Do I Know What’s Taxable and What’s Not?

The following link can help you determine what is taxable and what isn’t in Puerto Rico. Click here

Who Pays Sales Tax?

Consumers pay sales tax.  Merchants do not pay sales tax out of their own pockets.  It’s commonly referred to as a pass through tax.

What Am I Responsible For?

You are required to collect sales tax, hold it secure and send it to SURI (Puerto Rico’s version of the IRS) on-time and in-full.

When Is My Sales Tax Payment Due in Puerto Rico?

Puerto Rico Sales and Use Tax is due no later than the 20th day of each month for the prior month. Click here for more information.

How Do I Know How Much Sales Tax to Charge? 

The sales tax rate in Puerto Rico is currently 11.5%. The final and definitive answer is always the sales tax rate posted on the State Department of Revenue website.  Rates posted on the web are often not up-to-date and incorrect. It’s always the merchant’s responsibility to charge the correct sales tax rate.

Who Gets the Sales Tax Money?

In Puerto Rico all sales tax is paid directly to SURI.

What if I Forget to Pay or Spend the Money and Can’t Pay?

Puerto Rico has severe penalties for missing tax payments. If sales tax goes unpaid, states will seize the assets of the business or owner and auction them off to pay the debt.  In extreme cases owners will be prosecuted and sent to jail. Even if the business closes, sales tax is a personal liability that will follow the owner until paid.

Puerto Rico Department of Treasury

TAX RATE: The sales and use tax rate in Puerto Rico is 11.5%.

Puerto Rico Sales and Use TAX HELP: (787) 622-0123

This resource page is for informational purposes only.  If you have further questions regarding sales tax please contact DAVO support at 888-659-8432 or consult your tax adviser.

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