Although details are currently scant, Puerto Rico’s 2017-2018 budget legislation, if passed, could make two changes that will require taxpayers to make immediate adjustments to their current sales tax processes:
- The budget appears to require taxpayers who generally make payments in excess of $2000 monthly, to make two payments per month instead of one. The first payment would be due on the 15th and the second on the last day of the month. This process would apply to both state and local tax and could impact June payments made during the month of July.
- The budget also appears to modify the 4% reduced rate which applies to certain “business to business” transactions by replacing it with a 2% rate.
The Commonwealth of Puerto Rico faces enormous fiscal challenges and has a longstanding history of making dramatic and immediate changes to their sales tax rules intended to close their “tax gap.” Sovos will be monitoring the situation in Puerto Rico closely and will provide continued updates through this forum.
About the Author
Charles Maniace is the Director of Regulatory Analysis at Sovos. An attorney by trade, Chuck leads a team of attorneys and tax professionals responsible for all the tax and regulatory content that keeps Sovos clients continually complaint. Over his 15 year career in tax and regulatory automation, he has given talks and presentations on a variety of topics including The Taxation of High Tech Transactions, The Taxation of Remote Commerce, The Regulatory Implications of Brexit, The Rise of E-Audits, Form 1042-S Best Practices and Penalty Abatement Practices for Information Returns. Chuck is a member of the Massachusetts Bar and holds a BS in Business Economics from Bentley College, a JD from Boston University School of Law, and an LL.M in Taxation from Boston University School of Law.More Content by Charles Maniace