Economic nexus laws: Puerto Rico

by Sarah Craig February 18, 2024

Please note: This blog was originally published in 2022. It’s since been updated for accuracy and comprehensiveness.

While Puerto Rico is considered an unincorporated U.S. territory rather than a state, many of the same state sales tax considerations are applicable. On December 8, 2020, the secretary to Puerto Rico’s Departamento de Hacienda (Department of Finance) signed legislation expanding sales tax requirements to include remote sellers and marketplace facilitators.

Here’s all the information you need to know about sales tax and economic nexus laws in Puerto Rico.

What are economic nexus laws in Puerto Rico?

With the 2018 South Dakota v. Wayfair Supreme Court ruling in favor of South Dakota, states are now free to pursue sales tax from e-commerce businesses who have a “significant presence” in their state.

Significant presence – or nexus – was previously defined as having a physical presence (ex: brick and mortar store, employee, or inventory in a fulfillment center like FBA). But with the Wayfair Supreme Court ruling, now this definition has been expanded to include economic activity in a state as well. This concept of triggering sales tax responsibility because of your economic activity in a state is now referred to as economic nexus.

Most important, this now means that if you pass a state’s economic threshold for total revenue in that state and/or number of sales transactions to buyers in that state, you’re now legally required to register, collect and remit sales tax for that state.

What’s the threshold for economic nexus law in Puerto Rico?

  • Effective January 1, 2021
  • Threshold: $100,000 in gross sales or 200 sales transactions during the previous or current calendar year.
  • Summary: Sellers that meet either threshold are required to register for a Puerto Rico sales tax permit, collect sales tax on sales that ship into Puerto Rico, and remit sales tax to the state.
  • Learn more about Puerto Rico sales tax on their website. 

I meet the economic threshold requirement in Puerto Rico. Now what?

If you have met the economic nexus threshold in Puerto Rico, your next step is to register for a sales tax permit. Here is all the information you need to register for a sales tax permit in Puerto Rico.

I’ve met this threshold in Puerto Rico, now where can I ask questions?

We recommend speaking with a vetted sales tax expert to answer specific questions for your business.

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