P.R. Laws tit. 13, § 31601
(a) For purposes of this part, the following terms shall have the meaning stated below:
(1) Good.— Shall mean any object, device, or thing for use and consumption, regardless of its form, material or essence and regardless of its name.
(2) Cost in Puerto Rico.— Shall mean and shall be determined in each case, as established hereinafter:
(A) Importers.— The “cost in Puerto Rico” shall be the sum of all the costs, excluding freight charges and insurance, that make possible the arrival of goods to the ports, regardless of its name or origin, including all types of royalties, payments for distribution rights, licenses or any other similar payment or commissions, plus ten percent (10%) of the sum of the related costs in this paragraph for freight and insurance. Notwithstanding the above, in the case of truck tractors, buses and trucks, the “cost in Puerto Rico” shall be the f.o.b. factory price quoted by the manufacturer of said motor vehicles to its distributors in Puerto Rico, plus ten percent (10%) of the f.o.b. factory price for freight and insurance.
In no case shall the cost in Puerto Rico be reduced by discounts for down payment or for discounts granted for volume of purchases, for sales volume or for considerations of a speculative nature, but it may be reduced in an appropriate measure for commercial discounts granted to make the prices stipulated in lists, catalogues, advertisements or other publications comparable to the prevailing market prices, or to convert the consumer price figures to wholesaler or retailer prices, provided that the Secretary determines that said reduction is duly justified under the circumstances to determine the cost in Puerto Rico. This definition shall be interpreted by the Secretary in a manner that is analogous to the existing one. The term “cost in Puerto Rico” shall not apply in the case of automobiles.
(B) Manufacturers.— The cost in Puerto Rico shall be sixty percent (60%) of the sales price. The cost in Puerto Rico shall not be reduced by any tax paid. The manufacturer’s sales price shall not be reduced by discounts for down payments or by discounts granted for volume of sales or considerations of a speculative nature.
(C) The preceding notwithstanding, the Secretary may determine the “taxable price in Puerto Rico” in accordance with the method that reflects the value or price of the goods subject to taxation, when he/she deems that the documents needed to establish the “cost in Puerto Rico” are not authentic, are insufficient or inadequate for such purpose; or when, on the basis of the documents submitted by the taxpayer to establish the “cost in Puerto Rico”, it differs considerably from the “cost in Puerto Rico” for similar goods; or when no rule is prescribed to determine the “cost of Puerto Rico” in this part.
(3) Manufacturer.— Shall mean any person engaged in the manufacture of any goods, including assemblers or finishers of goods, and persons who further process partially processed goods.
Any person who begins or undertakes the processing or manufacturing of any goods subject to taxation under this part shall notify so to the Secretary and post a bond in favor of the Secretary in the manner provided by regulations.
(4) Date of introduction.— Shall mean the day the goods are unloaded at the port. However, when due to applicable customs, military or sanitary regulations or for strikes at the ports or other labor conflicts, or when for any event of force majeure, the taxpayer or the person liable for the payment of the excise taxes is prevented from taking possession of the goods introduced from abroad within the term of thirty (30) days counting from their arrival in Puerto Rico, the date of introduction shall be deemed as the date on which the customs office or the appropriate authority allows the taxpayer or the person liable for the payment of the excise taxes to take possession of the goods introduced, or the date on which the Secretary of Labor and Human Resources officially announces the termination of the strike, or that on which, in the judgment of the Secretary, the circumstances of force majeure have ceased.
In the case of tax exempt goods introduced into the foreign trade zones in Puerto Rico, the date of introduction shall be the date on which the merchandise is removed from the premises of said zone, event which shall be verified through the presentation of the document known as the “Statement of Entry for Consumption” of the Customs Service of the United States of America.
(5) Introduction.— Shall mean the arrival of goods to the ports of Puerto Rico from abroad that are effectively unloaded.
(6) Introducer.— Shall mean any person who receives or acquires goods from abroad, either as a consignee or through a bank, shipping agent or any other middleman.
(7) Municipality.— Shall mean all the municipal governments of the Government of Puerto Rico.
(8) Person.— Shall mean any natural or juridical person.
(9) Tax-exempt person.— Shall mean every person who by reason of his/her status and in accordance with the requirements and provisions of this part, is legally qualified to acquire taxable goods without the need to pay the excise taxes or taxes established in this part.
(10) Taxable price in Puerto Rico.— Shall mean the “cost in Puerto Rico” plus twenty percent (20%) of said cost, except in the cases below:
(A) Buses, truck tractors, and trucks.— In the case of buses, truck tractors and trucks introduced by any person, the “taxable price in Puerto Rico” shall be determined as follows:
(i) New buses, truck tractors, and trucks.— In this case, the “taxable price in Puerto Rico” shall be the f.o.b. factory price quoted by the manufacturer of such motor vehicles to its distributors in Puerto Rico, multiplied by 1.32.
(ii) Used buses, truck tractors, and trucks.— In this case, the “taxable price in Puerto Rico” shall be that which appears in an independent publication recognized by the industry for similar models (Black Book, Blue Book, Automotive Invoice Services, and others) including the value of any optional equipment installed. This way, the depreciation for the corresponding model shall be recognized. The quantity thus reflected shall be multiplied by 1.32.
In the case of automobiles, the “taxable price in Puerto Rico” shall be the “suggested consumer sales price”, as indicated herein.
(11) Suggested consumer sales price.— Shall mean, for purposes of this Subtitle, the following for each of the cases stated below:
(A) New vehicles for sale.— In the case of new automobiles introduced from abroad by distributors and authorized dealers, the suggested consumer sales price shall mean the basic cost of the automobile model, including the optional factory-installed equipment, plus the insurance and import freight, the estimated sales profit margin, and the costs associated with the preparation and delivery of the vehicle.
The “suggested consumer sales price” shall be determined by the importer or distributor, as provided in § 31628(c) of this title before introducing the vehicle to Puerto Rico.
(B) New vehicles for private use.— In the case of new automobiles introduced from abroad by persons who will use them for private purposes, the “suggested consumer sales price” means the suggested manufacturer’s retail price as published in the most recent edition of the Black Book New Car Market Guide or the Black Book Truck and Vans Guide available on the date of introduction of the vehicle, depending on the corresponding vehicle, or in any other authorized and independent sources duly recognized by the industry, as determined by the Secretary. The amount found in the corresponding publication shall then be multiplied by one point thirty (1.30) in order to configure the “suggested consumer sales price” in order to apply the tax rate and determine the excise tax to be paid.
(C) Used vehicles for sale.— In the case of used automobiles including vehicles known as “vans”, “minivans”, and customized vehicles, introduced from abroad by authorized dealers, the “suggested consumer retail price” shall be the suggested retail price, without any other increase or decrease, as it appears in the most recent edition of the Black Book Used Car Market Guide available at the date of introduction of the corresponding vehicle, or in any other authoritative and independent source duly recognized by the used car industry, as determined by the Secretary, under the classification of “wholesale clean” or its equivalent. The quantity thus reflected shall then be multiplied by one point forty (1.40) so as to configure the “suggested consumer sales price” in order to apply the tax rate and determine the excise tax payable.
Notwithstanding the foregoing, in the case of used automobiles regarding available models of the calendar year in which the taxable event takes place and of models of that calendar year or the immediately preceding calendar year, the “taxable price in Puerto Rico” shall be determined in the same manner as in the case of new automobiles, as applicable.
(D) Used vehicles for private use.— In the case of used automobiles introduced from abroad by persons for their private use, the taxable price shall be that which appears in the column “Retail Clean” of the Black Book Used Car Market Guide, or the suggested retail sales price established by any other authorized independent source recognized by the industry, as determined by the Secretary, multiplied by one point thirty (1.30).
For purposes of this paragraph, “private use” shall mean particular, personal, private, own use or any other use that is not for the resale or sale to third parties.
(E) Ships.—
(i) New ships for sale.— In the case of new ships introduced by distributors and authorized dealers, the “suggested consumer sales price” shall mean the price for which the ship is retailed to the consumer (regardless of whether such ship is retailed by a seller different from the distributor or authorized dealer who introduced the ship), excluding the excise tax.
(I) At the time of introduction, the distributor or authorized dealer shall estimate the consumer sales price for the corresponding shipment, including all the necessary pricing elements which make the presentation of the ships to the consumer possible, and which constitute the retail asking price of those ships.
(II) The “consumer sales price” shall in no way be altered by units taken as “trade ins”.
(ii) New ships for private use or used ships for private use.— In the case of new ships introduced by persons for their private use, or used ships introduced by persons for their private use, that is, not for sale, the “consumer sales price” shall be the suggested sales price as published in any authorized and independent source duly recognized by the industry, as determined by the Secretary. The quantity reflected in the corresponding publication shall then be multiplied by 1.30 so as to configure the “consumer sales price” in order to apply the tax rate and determine the excise tax payable.
(iii) Used ships for sale.— In the case of used ships, the “consumer sales price” shall be the suggested sales price as published in any authorized and independent source duly recognized by the industry, as determined by the Secretary. The quantity thus reflected shall then be multiplied by 1.30 so as to configure the “consumer sales price” in order to apply the tax rate and determine the excise tax payable.
(iv) Notwithstanding the foregoing, in the case of used ships models of the calendar year in which the taxable event takes place and of models of that calendar year or the immediately preceding calendar year, the term “consumer sales price” shall be determined in the same manner as in the case of new ships, as applicable.
(12) Port.— Shall mean any pier, dock, wharf, terminal, air or maritime zone or port of entry of persons or goods from abroad, including all warehouses, businesses, stores and structures, facilities and the premises thereof.
(13) Territorial waters.— Shall mean those navigable waters extending up to 12 nautical miles off the coastal limits of the Government of Puerto Rico, as provided by Presidential Proclamation No. 5928 of December 27, 1998.
(14) Secretary.— Shall mean the Secretary of the Treasury.
(15) Bonded warehouse.— Shall mean those buildings or premises authorized by the Secretary, used or destined to store, deposit and keep imported, or locally-manufactured merchandise subject to taxation, pursuant to this part, but that are pending payment thereof. The bonded warehouses may be private or public. The private ones are those belonging to importers or local manufactures that solely and exclusively devote them to store their own products. The public ones shall be those in which products that belong to persons other than their owners or executors, can be deposited.
(16) Foreign-trade zone.— Shall mean those areas in ports or adjacent to them, provided with facilities for loading and unloading, handling, manufacturing, exhibiting, storing, packing, classifying, cleaning or any other handling of merchandise within the area duly designated as such by the Foreign Trade Zones Board pursuant to the provisions of the U.S. Foreign-Trade Zones Act of June 18, 1934, as amended.
(17) Ship.— Shall mean any concave construction made of wood, iron, steel, or any other material, which is capable of floating in water and which serves as a form of transportation, including every type of boat, barge, sailboat or vessel of any kind which can navigate on water.
(18) Heavy machinery.— Shall mean the machines and large tools used for agricultural, industrial, forest, maritime, or construction purposes, among others, including all types of equipment used for earthworks, such as excavators or paving equipment, but excluding trucks.
History —Jan. 31, 2011, No. 1, § 3010.01, retroactive to Jan. 1, 2011; Dec. 10, 2011, No. 232, § 129.