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20 November 2025

Puerto Rico exempts prescription medications from personal property tax at the municipal level

Puerto Rico has enacted Law 78-2025 to amend the Puerto Rico Municipal Code of 2020 (Municipal Code), as amended, to exempt prescription drugs from personal property tax at the municipal level.

Because the sales and use tax does not apply to prescription drugs, as defined in subsection (a) of Section 4030.12 of Puerto Rico Internal Revenue Code of 2011, as amended, Law 78-2025's Statement of Motives states that it is unfair for those prescription drugs to be subject to personal property tax at the municipal level. Therefore, Law 78-2025 adds paragraph (ii) to Article 7.092 of the Municipal Code to exempt those prescription drugs from municipal personal property tax.

Law 78-2025 went into effect on July 27, 2025, and will apply to the January 1, 2026 assessment date for fiscal year 2025–2026.

Implications

Taxpayers that pay personal property tax on prescription drugs should consider the upcoming reduction in personal property tax liability.

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Contact Information

For additional information concerning this Alert, please contact:

State and Local Taxation Group

Published by NTD’s Tax Technical Knowledge Services group; Jennifer Mannetta, legal editor

Document ID: 2025-2337

 

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