Puerto Rico: Sales Tax Handbook
Puerto Rico Sales Tax Rate
| State Sales Tax | Local Sales Tax Range | Average Local Tax | Average Combined Tax | Max Combined Tax |
|---|---|---|---|---|
| 10.5% | 1% - 1% | 1% | 11.5% | 11.5% |
2024 Puerto Rico Sales Tax Handbook
Puerto Rico Table of Contents
Puerto Rico's Sales Tax By The Numbers:
Puerto Rico has a higher-than-average sales tax, including when local sales taxes from Puerto Rico's 73 local tax jurisdictions are taken into account.
Rankings by Average State + Local Sales Tax:
Ranked 1st highest by combined state + local sales tax
Rankings by State Sales Tax Only:
Ranked 1st highest by state sales tax rate
Printable PDF Puerto Rico Sales Tax Datasheet
Puerto Rico has a statewide sales tax rate of 10.5%, which has been in place since 2006.
Municipal governments in Puerto Rico are also allowed to collect a local-option sales tax that ranges from 1% to 1% across the state, with an average local tax of 1% (for a total of 11.5% when combined with the state sales tax). The maximum local tax rate allowed by Puerto Rico law is 1%. You can lookup Puerto Rico city and county sales tax rates here.
What is exempt from sales taxes in Puerto Rico?
Many states have special sales tax rates that apply to the purchase of certain types of goods, or fully exempt them from the sales tax altogether. Here's how Puerto Rico taxes five types of commonly-exempted goods:
Clothing
10.5%
Groceries
1%
Prepared Food
10.5%
Prescription Drugs
EXEMPT
OTC Drugs
10.5%
About the Puerto Rico Sales Tax
While Puerto Rico is not a state, it is an an unincorporated territory of the United States and does collect one of the highest sales taxes in the USA. The Puerto Rico Sales and Use Tax, or the "Impuesto a las Ventas y Uso (IVU)" in Spanish, consists of a 10.5% commonwealth-wide sales and use tax and a 1% local-option sales tax that is distributed to the city in which it is collected.
Some cities in Puerto Rico (including Caguas, Yauco and Villalba) introduced sales taxes in 2005, and following their success as a fundraising initiative many other municipalities followed suit. The commonwealth-wide sales tax was introduced in 2006, and has since been an important revenue-generator for the Puerto Rican government.Groceries, healthcare services, prescription medications, and some busineness-to-business services are exempt from part or all of the Puerto Rico sales tax.
As of April 2016, the IVU is set to expire and be replaced with a 10.5% commonwealth-wide VAT (Value Added Tax), with the 1% municipality level sales tax remaining at the current level. This new Value Added Tax will apply to the importation into Puerto Rico of taxable articles and to taxable transactions, including a merchant’s sale into Puerto Rico of goods and services, a non-resident’s rendering of a service to a person in Puerto Rico, and other combined transactions. The sales tax was raised as a part of wide raging tax reform in 2015 in the hope of helping Puerto Rico's struggling debt problems.
Because Puerto Rico is not technically a state, and has a tax structure that is different from most other regions, we do not have a full Sales Tax Handbook entry for Puerto Rico. Sales tax information for businesses is available, mostly in Spanish, from the Departamento de Hacienda de Puerto Rico (hacienda.gobierno.pr).
Is the Puerto Rico Sales Tax Destination-Based or Origin-Based?
Puerto Rico is a sales tax state, which means sales tax rates are determined by the location of the vendor, not by the location of the buyer. The origin-based method of determining sales tax is less complicated for vendors than destination-based sales tax, because all in-state buyers are charged the same sales tax rate regardless of their location.
Is Puerto Rico a Streamlined Sales Tax State?
Puerto Rico is not a member of the Streamlined Sales and Use Tax Agreement. The SSUTA is an agreement adopted by about half of states that ensures that their sales tax laws are simplified to lower the costs associated with compliance.
Contact the Puerto Rico Departamento de Hacienda
The Puerto Rico Sales Tax is administered by the Puerto Rico Departamento de Hacienda. You can learn more by visiting the sales tax information website at www.hacienda.gobierno.pr.
Phone numbers for the Sales Tax division of the Departamento de Hacienda are as follows:
- Local Phone: (787) 721-2020
Learn More: Our Book Recommendations
If you would like to learn more about how to manage your Puerto Rico sales taxes, we recommend the following books:
Small Business Taxes For Dummies
This introductury book assists both current and aspiring small business owners with important tax planning issues, and covers a wide variety of small business tax topics.
Buy on Amazon
A Guide to Sales and Use Tax
This book provides information and insights on how to comply with a multitude of sales and use tax laws and regulations. This is our recommendation if you need an in-depth look into sales taxes.
Buy on AmazonSimplify Puerto Rico sales tax compliance! We provide sales tax rate databases for businesses who manage their own sales taxes, and can also connect you with firms that can completely automate the sales tax calculation and filing process. Click here to get more information.
Puerto Rico Sales Tax Rates by Zip Code:
Need an updated list of Puerto Rico sales tax rates for your business? Download our Puerto Rico sales tax database!