Puerto Rico imposes sales tax collection obligations on marketplace facilitators

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June 2020

Overview

The Governor of Puerto Rico on April 16, 2020 signed House Bill 2419 into law as Act 40-2020 (Act 40), amending certain sales and use tax (SUT) provisions of the Puerto Rico Internal Revenue Code. Act 40 expands the definition of ‘merchant’ to include marketplace facilitators and marketplace sellers and imposes sales tax collection obligations on marketplace facilitators with respect to sales of certain taxable property made by marketplace sellers delivered or dispatched by mail to persons in Puerto Rico after December 31, 2019. Taxpayers should watch for guidance with respect to marketplace facilitator obligations for sales after December 31, 2019 but before April 16, 2020.

The takeaway

Taxpayers that fall under the definition of market facilitators now must collect and remit Puerto Rico sales tax with respect to mail-order sales executed through their platforms after December 31, 2019. Taxpayers should monitor this development to determine whether any relief will be granted to marketplace facilitators with respect to transactions that took place after December 31, 2019 but before April 16, 2020.

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Peter Michalowski

State and Local Tax Leader, PwC US

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