The Puerto Rico Treasury Department (PRTD) announced in Tax Policy Circular Letter (CL) 17-01 that the back-to-school sales tax holiday for school uniforms and supplies will be in effect from July 14, 2017 through July 15, 2017.

Section 4030.20 of Puerto Rico's Internal Revenue Code of 2011 (the 2011 PRIRC) establishes two sales tax holidays during the fiscal year. After July, the next holiday will be in January 2018.

Only school uniforms, supplies and textbooks are exempt from the sales and use tax. Specifically, under Section 4030.20(c) of the 2011 PRIRC, the following items are excluded from sales tax during the sales tax holiday:

 — School uniforms, specifically required by the educational institution, that do not have a general use or cannot be worn outside the school. Includes clothing and footwear that complements the uniforms as specifically indicated by the educational institution. CL 17-01 specifically lists articles that will not be considered eligible school uniforms, such as belt buckles sold separately, protective, sporting and recreational gear not suitable for general use (i.e., security helmets, goggles, ballet slippers).

 — School supplies commonly used by a student in the course of study (e.g., pencils, erasers, markers, pencil boxes, index cards, computer storage media, including disks, compact disks and flash drives). CL 17-01 specifically provides a list of items that will be considered school supplies. If the articles are not included in such list, they will be subject to sales tax.

 — Art and music school supplies, as well as reference materials or materials used to learn the subject being taught (e.g., clay and glazes, paint (acrylic, oil or tempera), paint brushes for art work, sketchbooks, musical instruments and maps and globes).

Textbooks and college books continue to be exempt throughout the year from sales tax, provided they are required in an official list and purchased at retail.

Implications

Despite the various amendments to the sales and use tax regime that have been enacted in the last two to three years, the provisions related to the back-to-school sales tax holiday and the items covered have remained essentially unaffected.

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