May 31, 2022
Puerto Rico’s Treasury Secretary announces sales and use tax holiday for hurricane-season purchases will take place from 17 June to 19 June 2022
Puerto Rico’s Treasury Secretary announced the sales and use tax (SUT) holiday for hurricane-season purchases, enacted by Act 20-2022, will take place 17 June 2022 to 19 June 2022.
The SUT holiday was originally scheduled for the last weekend in May. Because merchants were concerned that they would not be able to obtain enough inventory in time for the SUT holiday, the Secretary exercised his discretion for this first year of the statute’s implementation and postponed the holiday to the weekend of 17 June.
Taxpayers may purchase water tanks and containers, shutters, hardware, untreated wood panels, water and nonperishable food without the imposition of SUT. During the SUT holiday, they also may purchase generators, batteries, flashlights and emergency solar equipment, among other things.
Additionally, the SUT holiday applies to purchases made: (i) under layaway plans; (ii) with rain checks; (iii) by mail, telephone or email; (iv) over the internet; or (v) with gift cards.
For more information about the SUT holiday, see EY Global Tax Alert, Puerto Rico enacts sales and use tax holiday for hurricane season purchases, dated 13 May 2022.
The Financial Oversight and Management Board for Puerto Rico (FOBMPR) recently announced that the tax holiday included in Act 20 is not consistent with the Fiscal Plan because it is not revenue neutral. For the tax holiday to take place, the FOBMPR stated the Puerto Rican Government must establish offsetting revenue measures.
We will continue to watch for developments and will report them as necessary.
For additional information with respect to this Alert, please contact the following:
Ernst & Young Puerto Rico LLC, State and Local Taxation Group, San Juan