The Treasury Department of Puerto Rico (Hacienda) issued Administrative Determination 17-26 which creates a sales and use tax exemption for all sales and purchases made by small and medium taxpayers. According to the new rule, all taxpayers with gross revenues during the previous 12 months of $1,000,000 or less will qualify. Under the rule, small business purchasers may acquire goods and services for resale tax free. Likewise, when items purchased for resale are sold at retail, tax should not be collected but rather should be reported as an exempt sale.
The exemption (which relates to both goods and services) is temporary in that it only applies between November 20 and December 31, 2017.
To qualify for the exemption, businesses will need to obtain a Temporary Exemption Certificate from the Hacienda to be displayed at their place of business. This exemption does not impact the requirement to file standard periodic returns.