Tuesday, March 31, 2020

‘Essential Items’ in Covid-19 fight to be exempt from Puerto Rico Sales Tax

By on March 18, 2020

Puerto Rico Treasury Department (Juan J. Rodríguez / CB)

Treasury includes disinfectants, cold medications in order lasting from March 23 to April 30   

SAN JUAN — After being approved by the Financial Oversight and Management Board for Puerto Rico, Gov. Wanda Vázquez Garced announced Wednesday that “essential items” that may be used in the treatment and prevention of the novel coronavirus disease (Covid-19) will be exempt from the 11.5 percent sales and use tax (IVU by its Spanish acronym) starting Monday until April 30.

“Given the state of emergency that we face due to the threat of contagion of Covid-19 and the curfew restrictions that we have imposed as a preventive measure, we are aware that the budget of many citizens has been impacted,” the governor said in a press release. “For these reasons, we are exempting from the IVU all articles of first necessity whose use or consumption is necessary to prevent the spread or treatment of Covid-19.”

Vázquez said Consumer Affairs Department (DACO by its Spanish acronym) order 2020-005 was issued with the purpose of freezing the prices of products needed by citizens to prevent the spread of Covid-19 or to mitigate its effects. The order defined “products of first necessity” as all products, materials, supplies and equipment whose consumption or use is needed to prevent becoming infected or receive treatment, she said.

Puerto Rico Treasury Secretary Francisco Parés Alicea (Juan J. Rodríguez / CB)

Treasury Secretary Francisco Parés Alicea issued Administrative Determination (AD) 20-07, which exempts from state and municipal IVU the articles listed in the DACO order that are purchased in Puerto Rico starting Monday, March 23, at 12:01 a.m. through April 30 at 11:59 p.m.

“The merchant who sells said items will report these sales in their Monthly Sales and Use Tax Return (Form SC 2915), on the ‘Sale of Exempt Tangible Personal Property’ line of said form,” the Treasury chief explained.

Parés Alicea indicated that his department will give space to the retailers to make the corresponding adjustments in the programming of their IVU systems and replenish their inventory with the exempted items.

The IVU-exempt articles follow:

• Hand sanitizers

• Personal disinfection items (such as soap, shampoo and wet towels, or wet wipes)

• Tissues

• Face masks

• Isopropyl alcohol

• Disinfectants and antiseptics

• Articles for disinfection and / or household cleaning (such as soaps, detergents, chlorine and disinfectants)

• Vinyl gloves

• Pain relievers and medications with acetaminophen or ibuprofen (tablets, suppositories, liquid), the use of which should be consulted with a medical professional, as the latter reportedly may have potential adverse effects on people with Covid-19. 

• Drugs used to treat cough and nasal congestion, including antihistamines

“We urge all merchants to enforce the provisions of this Administrative Determination,” the Treasury chief said. “In the event that someone, by act or omission, charges a consumer the IVU in the sale of the items that have been determined, [the business] will be obliged to immediately refund the amount of sales tax charged to the consumer.”

Parés said more information about the IVU exemption order may be obtained at the Treasury Department’s website www.hacienda.pr.gov, in the “Publications” section.