On May 6, 2022, Puerto Rico enacted Act 20-2022, establishing a sales and use tax (SUT) holiday for hurricane season purchases. Under Act 20-2022, the SUT holiday will take place annually the last weekend in May. The law states that Puerto Rico's Treasury Secretary should issue a circular letter indicating the dates for the SUT holiday. For hurricane season 2022, the law provides that the Secretary will establish what will be the weekend for this first year of the law's effectiveness.

As of the publication of this Tax Alert, the Secretary has not issued a circular letter. In the absence of the communications from the Puerto Rico Treasury Department (PRTD), Act 20-2022 states that the SUT holiday will commence on the last Friday of May for three days.

Act 20-2022 lists the items that will be exempt from SUT during the SUT holiday. Some of the items include water tanks and containers, shutters, hardware, untreated wood panels, water and nonperishable food. Taxpayers also may purchase generators, batteries, flashlights and emergency solar equipment, among other things, without the imposition of SUT. If a taxpayer returns an item within 60 days of the SUT holiday, the taxpayer will not be reimbursed for the SUT, unless the taxpayer has a receipt showing that SUT was paid.

Implications

Merchants that sell the items listed in Act 20-2022 should be on the lookout for the PRTD's circular letter with any further guidance about the SUT holiday.

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