Pending Puerto Rico Legislation Could Mean Significant and Immediate Changes for Taxpayers

Charles Maniace
July 3, 2017

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: 

  1. 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.
  2. 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.

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Charles Maniace

Chuck is Vice President –Regulatory Analysis & Design at Sovos, a global provider of software that safeguards businesses from the burden and risk of modern tax. An attorney by trade, he leads a team of attorneys and tax professionals that provide the tax and regulatory content that keeps Sovos customers continually compliant. Over his 20-year career in tax and regulatory automation, he has provided analysis to the Wall Street Journal, NBC, Bloomberg and more. Chuck has also been named to the Accounting Today list of Top 100 Most Influential People four times.
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