State & Local Tax Impacts of COVID-19 for Puerto Rico

Thoughtware Alert Published: Dec 11, 2020
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Information current as of December 31, 2020.

The SARS-CoV-2 virus and the incidence of COVID-19 are changing life across the globe. Many taxing jurisdictions are taking mitigating actions to create social distance and aid taxpayers. The following is a running list of actions by jurisdiction, which generally result in additional time to file and/or pay. Further, many jurisdictions have closed their offices to in-person use by taxpayers and suspended their audit and administrative functions. This alert doesn’t cover similar waivers from local-level taxing authorities. These developments continue to quickly evolve; check with your BKD Trusted Advisor or visit our COVID-19 Resource Center for current information as needed.

Information Specific to Puerto Rico

  • The Puerto Rico Treasury Department (PRTD) extended the due date for income tax returns and tax payments due in March to April 15, 2020. For returns and payments originally due April 15, 2020, the PRTD has extended the due date to May 15, 2020.
  • In addition, pass-through entities with estimated tax payments due in March will have until April 15, 2020, to make those payments. Taxpayers with estimated tax payments originally due April 15, 2020, must make those payments on or before May 15, 2020.
  • The time to satisfy certain sales and use tax obligations and to file informative returns and other returns and payments due in March is extended to April 15.
    • Puerto Rico Administrative Determination 20-03, March 15, 2020.
  • The Puerto Rico Treasury Department (PRTD) extended the due dates for various returns. The due date for monthly sales tax returns and payments due March 20 is extended to April 20, 2020. The PRTD also extends the due date for any SUT payments corresponding to February 2020 from March 20 to April 20, 2020. The PRTD also will not impose penalties on biweekly sales and use tax payments due in March.
  • For all other tax types besides income tax, the PRTD is extending the return and payment due date by one month, counted from the original due date. The extension applies to other returns, payments and deposits due from March 15 to April 15, 2020.
  • Bonds and internal revenue licenses with a due date from March 15 to March 31, 2020, are automatically extended to April 30, 2020.
    • Puerto Rico Administrative Determination 20-05, March 17, 2020.
  • The PRTD announced an additional extension for income tax returns, and payments with an original or extended due date of March 15, 2020, have until June 15, 2020, to file those returns (previously April 15, 2020). For returns and payments with original or extended due dates of April 15, 2020, the due date is extended to July 15, 2020 (previously May 15, 2020). The July 15, 2020, due date also applies to returns due on May 15 or June 15, 2020. The PRTD will not impose interest, surcharges or penalties if the tax payments are made with the returns.
  • The due date for filing informative returns for 2019 that originally were due on March 31 is extended from April 15, 2020, to May 15, 2020.
  • The due date for other returns originally due in March and April is extended to June 2020 and for other returns due in May or June 2020, the extended due date is in July 2020. The PRTD will not impose interest, surcharges or penalties if the tax payments are made with the returns.
  • Bonds and internal revenue licenses with a due date from March 15 to April 30, 2020, are automatically extended to May 31, 2020.
  • The due dates for the monthly SUT return for March, April and May are extended by 30 days. Noncompliance penalties will be abated for the biweekly SUT payments for the months of March, April, May and June 2020, provided the full amount of the SUT due for those months is paid with the monthly SUT returns.
    • Puerto Rico Administrative Determination 20-09, March 24, 2020; and supersedes AD 20-03 and AD 20-05.
  • The PRTD will not impose penalties for missing or insufficient estimated tax payments, which are required by individuals and corporations for tax year 2020; the penalties will not be imposed if the first and second installment payments are timely made in equal amounts by the due dates of the next two estimated installments, together with the corresponding estimated income tax payments due.
  • Withholding agents are not required to do the 10 percent income tax withholding at source on payments for services performed, but the service provider may choose to have the withholding continue; the waiver from the withholding is temporary during the period from March 23, 2020, to June 30, 2020.
    • Puerto Rico Administrative Determination 20-10, March 24, 2020.
  • The PRTD has further extended the exemption from state and municipal sales tax for necessities to May 31, 2020, and is providing additional time to acquire prepared food without paying the state and municipal sales tax to May 25, 2020.
    • Puerto Rico Administrative Determination 20-12, May 7, 2020, and extends the sales tax exemption previously granted through AD 20-07.
    • Puerto Rico Administrative Determination 20-13, May 15, 2020, and extends further previous sales tax-free periods in AD 20-08 and AD 20-11.
  • The PRTD has extended further the due date for filing informative returns for tax year 2019 from May 15, 2020, to May 31, 2020, because of COVID-19, with full waiver of interest, surcharges and penalties.
    • Puerto Rico Administrative Determination 20-14, May 15, 2020, amending AD 20-09.
  • The PRTD has further extended the exemption from state and municipal sales tax for necessities previously granted through AD 20-12, from May 31, 2020, to June 30, 2020. The PRTD indicates that even though the sales tax exemption is extended, the provisions of AD 20-07 and AD 20-12 still apply.
    • Puerto Rico Administrative Determination 20-16, June 1, 2020.

For more information, reach out to your BKD Trusted Advisor or use the Contact Us form below.

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