The Sales Tax Connection

  • Welcome to the Sales Tax Connection!

    Our goal is to provide you with some interesting news about sales tax around the globe and give you links to other sites that you might find helpful. If you find something important is missing, or would like us to cover a specific topic, please leave us a comment. Remember to visit often as the website will be updated frequently with new items. As often as sales tax changes, so will we!
  • SalesTaxConnect on Twitter

    Error: Twitter did not respond. Please wait a few minutes and refresh this page.

  • Top Posts

  • Top Clicks

    • None
  • Post History Archives

  • Disclaimer

    Tax legislation and administrative policies are complex and subject to change. Therefore, should you wish to ask for our opinion on any of the matters posted (or any sales tax matter in general), please know that the conclusions reached herein and views expressed are matters of interpretation and opinion rather than certainty. The information provided is based on understanding of the facts as provided by various media sources (and you) and is not meant to represent a ruling, nor is it legally binding.

    Should you require further clarification of any of these subjects to make determinations for your business, please contact us to arrange a formal agreement for consulting services. We can help you work directly with the taxing jurisdiction to obtain a written interpretation from the appropriate tax department or pursue the matter for you via required methods.

    If I am unable to assist you, I'll gladly promote others in the industry who I think are worthy.

  • Blog Stats

    • 304,491 Hits to date.
  • Advertisements

Puerto Rico strikes again with bad sales tax moves

Posted by salestax on April 2, 2009


This bill was passed:  No more resale certificates allowed in PR as of 6/1/09 and tax returns for June collections will start being due on the 10th of the month beginning July 10, 2009.


Back in early March, Puerto Rico House Bill 1404 was introduced to the legislation that would changed the way their sales tax is collected and remitted.  For full details on this move see the Grant Thornton alert here.

Not only is the whole PR sales tax legislation illegally implemented from the very start (my opinion based on their definition of  nexus vs. the 25+ year old  Quill v. North Dakota case amongst several others).  But, to require foreign companies to collect the PR sales tax and then to make these changes is really asinine.  It’s as if they know nothing about the US Sales Tax system, how it works, how to implement it, or it’s history and how it’s changed over the years.  Anyway, these changes include removing an up-front exemption for resale and implementing an Advanced sales tax. Advanced Sales Tax is when a distributor pays tax on everything it buys and then charges customers tax when it is sold.  After the sale the distributor can then take a credit on those items on which tax was paid against the tax that was charged to customers.  A practice, long upheld by the state of Louisiana, who actaully came to their senses and removed that rule for 2009. 

The other major change is requiring that all Puerto Rico sales/use tax returns be filed by the 10th of the month instead of the 20th.  Here again… do they not learn anything by studying the U.S.A. sales tax system?  There used to be states who required early pre-payments or early return due dates – they’re all but gone.  The long hold out is Maine who requires a return be filed by the 15th of each month.

And, to boot it all into a nice little bundle, they wanted it all effective by April 1st!  hahaha!!!  There’s an April Fool for you!  On March 31st, since the legislature had not acted on this bill yet, taxpayers were wondering what to do.

Finally, someone in PR realized at the 11th hour that this was maybe a little too ambiguous.  So, in the late hours of the typical business day on March 31st, the PR Secretary of Treasury released a statement that the effective dates would not be until June 1st if the bill was passed.  If you can read Spanish, feel free to look at the statement here

So, breathe easy for now, until we find out if this legislation will pass muster.


One Response to “Puerto Rico strikes again with bad sales tax moves”

  1. bicicleta eléctrica…

    […]Puerto Rico strikes again with bad sales tax moves « The Sales Tax Connection[…]…

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: