P.R. Laws tit. 13, § 32001
For purposes of this part, the following terms, words, and phrases shall have the general meaning expressed below, except when the context clearly indicates otherwise:
(a) Food and food ingredients.— Substances, whether they are liquid, concentrated, solid, frozen, dry, or dehydrated, that are sold to be ingested by humans and consumed because of their flavor or nutritional value. Food and food ingredients exclude the following:
(1) Dietary supplements;
(2) alcoholic beverages;
(3) tobacco and its byproducts;
(4) candy, sweets;
(5) pastries;
(i) This term does not include bread, crackers, or any other product considered food under the Federal Nutrition Assistance Program (FNAP), which shall be exempt from the IVU.
(6) carbonated beverages, and
(7) prepared foods.
(b) Prepared foods:
(1) Foods that are sold hot or that are heated by the merchant;
(2) two (2) or more food ingredients that are mixed or combined by the merchant to be sold as a single item or product, except foodstuffs that are only cut, repackaged, or pasteurized by the merchant, and eggs, fish, meat, poultry, and food that contains them in a raw state and requires cooking by the consumer, as recommended by the Food and Drug Administration in Chapter 3, Part 401.11 of the Food Code, to prevent foodborne illness, or
(3) food sold with eating utensils by the merchant, including plates, flatware, knives, forks, and/or spoons, glasses, cups, napkins, or straws. The term “plates” does not include containers or packaging used to carry food.
(c) Store or storage.— Includes maintaining or keeping in Puerto Rico tangible personal property to be used or consumed in Puerto Rico or for any purpose, excluding the sale in the ordinary course of business in Puerto Rico or abroad. To store or storage excludes the aging of distilled spirits in Puerto Rico performed pursuant to the provisions of §§ 32401 et seq. of this title.
(d) Taxable year.— The calendar or fiscal year of the taxpayer, as defined in § 30041(a)(18) of this title, in those cases in which the Secretary authorizes the use of the fiscal year in lieu of the calendar year.
(e) Item or good.— Any object, device, or thing, regardless of its shape, material, or essence, and of its name.
(f) Lease or leasing.— Any transfer of ownership or control of tangible personal property or real property for a fixed or indefinite term in exchange for cause or consideration. A leasing may include future options for purchase or extension of its term. The term “lease” or “leasing” does not include:
(1) The transfer of ownership or control of property under a security agreement or payment plan that requires the transfer of title once the required payments are met;
(2) the transfer of ownership or control of property under an agreement that requires the transfer of title once the required payments are met and the purchase option price does not exceed one hundred dollars ($100) or one percent (1%) of the total payment required;
(3) providing tangible personal property together with an operator for a fixed or indefinite term. As a condition for the exclusion, the need for an operator so that the equipment performs as designed is required. For purposes of this clause, an operator must provide additional services besides maintaining, inspecting, and preparing the tangible personal property for its use;
(4) agreements that involve motor vehicles or trailers when the amount of the rental payment may be increased or decreased by reference to the amount realized in the sale or disposition of the property;
(5) the room occupancy tax fixed by the Puerto Rico Tourism Company;
(6) the leasing of properties whose owner is the Puerto Rico Industrial Development Company or its successor entity, and
(7) financial lease constituting a sale pursuant to subsection (ww) of this section, and the financial leases that meet the requirements set forth in Section 1(c) of Act No. 76 of August 13, 1994, as amended.
For purposes of this subsection, the term “lease” or “leasing” may not be used in reference to generally accepted accounting principles.
(g) Delivery charges.— The charges set by the merchant of taxable items for handling and delivery to premises designated by the purchaser of the taxable item, including, but not limited to, transportation, shipping, stamps, handling, and packaging.
(1) If the delivery consists of exempt and taxable personal property, the merchant must impose the delivery charges using:
(A) A percentage based on the total sales price of the taxable personal property compared to the total sales price of all the personal property delivered, or
(B) a percentage based on the total weight of the taxable personal property compared to the total weight of all the personal property delivered.
(2) The merchant must pay taxes on the percentage of the delivery charges pertaining to the taxable property, but does not have to pay taxes on the percentage imposed to the exempt property.
(h) Retailer.— Any person engaged in the business of selling taxable items in the Government of Puerto Rico, including any wholesaler. For purposes of this section, a person shall be deemed to be engaged in the business of selling taxable items in the Government of Puerto Rico when:
(1) The merchant maintains establishments or offices in Puerto Rico; or
(2) the merchant has employees or agents in Puerto Rico who solicit business or conduct business transactions on behalf of said retailer; or
(3) the merchant owns tangible personal or real property located in Puerto Rico; or
(4) the merchant creates a nexus with Puerto Rico in any manner, including, but not limited to the execution of sales contracts in Puerto Rico, direct merchandising, or mail order sales, or sales through the radio, the distribution of unsolicited catalogs through computers, television, or other electronic media, or advertising in magazines or newspapers or other media; or
(5) through an agreement or reciprocity with another jurisdiction of the United States, and such jurisdiction uses its authority to tax and its jurisdiction over the merchant in support of the authority of Puerto Rico; or
(6) the merchant agrees, expressly or implicitly, to the taxation imposed by this part, or
(7) the merchant has a sufficient connection of some sort or a relationship with Puerto Rico or its residents, other than those described in clauses (1) through (6), for purposes of creating a sufficient nexus with Puerto Rico to impose on the merchant the responsibility of collecting the sales and use tax fixed by this part.
(i) Purchaser.— A person who acquires a taxable item.
(j) Consumption.— Includes the gradual use, deterioration, or erosion of tangible personal property.
(k) Department.— The Department of the Treasury.
(l) Admission rights, charges, or fees.— The term “admission rights, charges, or fees”
(1) Includes the amount of money paid to or for:
(A) Admit a person or vehicle with passengers to any place of entertainment, sports, or recreation;
(B) the privilege of entering or remaining at any place of entertainment, sports, or recreation, including, but not limited to movie theaters, theaters, open air theaters, shows, exhibitions, games, races, or any place where the admission rights, charges, or fees for are obtained through the sale of tickets, entrance fees, seating charges, charges for exclusive areas, charges for season tickets, charges for participating, or other charges;
(C) receiving anything of value as part of the admission or entrance to, or length of stay, or accommodation at any exhibition or place of entertainment, sports, or recreation, and
(D) the fees and charges paid to private clubs and membership clubs that provide recreational and physical training facilities, including, but not limited to golf, tennis, swimming, sailing, sports canoeing, and fitness and gym facilities, except for those that operate as nonprofit facilities and gym facilities property of or operated by any hospital.
(2) The term “admission rights, charges, or fees” excludes the amount of money paid to admit a person or vehicle to mass transit systems established by the Government of Puerto Rico, such as the Metropolitan Bus Authority, the Ports Authority, and the Department of Transportation and Public Works, or by an operator or subcontractor of these, including persons certified by the Government of Puerto Rico, its agencies or instrumentalities, to provide these services. It also excludes those charges to be collected by box offices or ticket services.
(m) Candy or sweets.— Means any confection of sugar, honey, and any other natural or artificial sweetener which is combined with chocolate, fruit, nuts, or other ingredients or condiments to form bars, drops, or pieces. The term “candy” does not include confections that contain flour and that do not require refrigeration.
(n) In Puerto Rico.— Within the territorial limits of the Commonwealth of Puerto Rico.
(o) State.— Any of the states of the United States, the District of Columbia, or a possession of the United States.
(p) The Government of Puerto Rico.— The departments, agencies, administrations, bureaus, boards, commissions, offices, public corporations, public instrumentalities, and municipalities of the Government of Puerto Rico, including the Legislative Branch and the Judicial Branch. The term “Government” shall also include those persons who operate or act in the name of or on behalf of it.
(q) Sales tax.— The tax imposed by this part on account of the retail sale, use, consumption, or storage of a taxable item in Puerto Rico.
(r) Use tax.— The tax imposed by this part on account of use, consumption, or storage, as defined in this section.
(s) Machinery and equipment used in manufacture.— Machinery and equipment used exclusively in the manufacturing process or in the construction or repair of vessels inside or outside the premises of a manufacturing plant, including all machinery, equipment, and accessories used to carry out the manufacturing process or that the manufacturing plant is required to acquire by federal or Commonwealth laws or regulations to operate a manufacturing plant.
(t) Vending machine.— A machine operated with coins, bills, credit or debit cards, tokens, coupons, or a similar device, to sell taxable items.
(1) The term “vending machine” includes, but is not limited to food, beverage, and cigarette vending machines.
(2) The term “vending machine” excludes:
(A) Jukeboxes;
(B) slot machines operated with coins or tokens, either mechanical or electronic;
(C) videos for children or youths;
(D) video and electronic game machines that contain material of a violent or sexual nature;
(E) adult entertainment machines, and
(F) pool tables.
(u) Tangible advertising or publicity material.— Includes the displays, display containers, pamphlets, catalogs, price lists, point-of-sale publicity, technical manuals, or any tangible personal property which is part of the consumer end product.
(v) Raw material.— Any product in its natural form derived from agriculture or extractive industries, byproduct, residual product, partially finished product, or finished product, to be transformed or integrated by a manufacturing plant into finished products that are different from the product deemed raw material, or used in the manufacturing process of said products, including, but not limited to the process for the production of electric power or cement.
(w) Wholesaler.— Any person who sells to merchants.
(x) Medications.— Compounds, substances, or preparations, and any component of a compound, substance, or preparation that is not a “dietary supplement”, “alcoholic beverage”, or “food” or “food ingredient”, except for food used in enteral nutrition:
(1) Recognized in the United States Pharmacopeia, the Homeopathic Pharmacopeia of the United States, or the National Formulary; or
(2) destined to be used in the diagnosis, cure, mitigation, treatment, or prevention of disease, or
(3) destined to be used to affect the structure of the body or any bodily function.
(y) Business.— Any for-profit or not-for-profit activity in which any person is engaged with the intention to generate profit or benefits, either directly or indirectly. “Business” includes the sale or lease of tangible personal property, as well as the sale of taxable services and admission rights.
(z) Operator.— Any person who owns a vending machine for purposes of generating sales through said machine and who maintains his/her inventory inside and removes or accredits the funds obtained by or attributable to the receipts of said vending machine.
(aa) Taxable item.— Tangible personal property, taxable services, admission rights, and combined transactions.
(bb) Person.— Any individual, enterprise, partnership, joint venture, association, corporation, limited liability company, estate, trust, trustee or receiver, syndicate or other entity, group, or combination that acts as a unit. It also includes any government and its political subdivisions, municipalities, government agencies, bureaus or departments, and public corporations.
(cc) Manufacturing plant.— Includes any plant engaged in assembling or integrating “tangible personal property”, or devoted to transforming “raw materials” into finished products that are different from their original state. Any factory that avails itself of any tax and industrial incentive laws existing in Puerto Rico, or any substitute thereof, shall likewise be treated as a manufacturing plant for purposes of the exemption established in § 32056 of this title.
(dd) Purchase price.— Has the same meaning as the sales price.
(ee) Sales price.—
(1) The amount of the consideration paid in cash, credit, property, or services in a sale of taxable items, without deducting the following:
(A) The cost of the property sold, including excise taxes and taxes that this Code may impose on said property;
(B) the cost of the materials, labor and service, interest, losses, all transportation costs, and taxes of the merchant, as well as all other costs of the merchant;
(C) fees billed by the merchant for any service needed to complete the sale other than the delivery or installation charges;
(D) delivery charges;
(E) installation charges;
(F) the value of the exempt personal property delivered to the purchaser when tangible taxable and exempt personal property has been sold in a combined transaction, and
(G) tips and other charges imposed by a merchant as part of the sales price of the taxable item.
(2) Sales price.— The sales price shall not include:
(A) Discounts allowed by the merchant and used by the purchaser in a sale, including cash or food stamps that are not reimbursable by third parties;
(B) interest and finance charges, if they appear as separate items in the sales invoice or any similar document given to the purchaser;
(C) any tax or charge imposed by law to the consumer, if the amount is separately stated in the sales invoice or in any similar document given to the purchaser;
(D) the value assigned to goods received as trade-in by the merchant as credit or as part of the payment of the sales price of the taxable item sold, and
(E) any service that is part of the sale, such as warranty service, warranty, and extended warranty.
(ff) Computer software.— A collection of coded instructions designed so that a computer or automatic data processing equipment may carry out a function or task.
(gg) Tangible personal property.—
(1) Includes items or personal property that may be seen, weighed, measured, or touched, or that is in any manner perceptible to the senses, or that is susceptible to appropriation, including computer software and prepaid phone cards, among others.
(2) The term “tangible personal property” excludes:
(A) Money or the equivalent of money, stock, bonds, notes, promissory notes, mortgages, insurance, securities, or other obligations;
(B) automobiles, propellants, all-terrain vehicles (ATVs), motorcycles, ships, heavy equipment, buses, and trucks; as said terms are defined in §§ 31628(b) and 31629(a) of this title;
(C) intangibles;
(D) gasoline, airplane fuel, gas oil or diesel oil, crude oil, partially manufactured and finished products derived from petroleum, and any other hydrocarbon mixture; except for propane gas and its byproducts and other gases of similar nature;
(E) electric power generated by the Electric Power Authority or any other entity which generates electric power, and
(F) the water supplied by the Aqueducts and Sewers Authority.
(hh) Real property.— Land, subsoil, soil, buildings, objects, machinery, equipment and tools attached to a building or to the land so as to indicate permanency. For these purposes, the objects, machinery, equipment, tools, and plants permanently attached, to wit, that cannot be removed from a building without destroying or damaging the building or property, shall be deemed as buildings. Real property is synonymous with real estate and real goods.
(ii) Prosthesis.— Device used to replace, correct, or assist, including the repair and replacement of parts thereof, used on or in the body for:
(1) Artificially replacing a missing body part;
(2) preventing or correcting deformities or physical defects, or
(3) assisting a weak or deformed body part.
(jj) Endorsement.— The authorization issued by the Secretary to a promoter approving the sale and collection of admission rights, charges, or fees to a public event, after receiving the written notice required to such effects.
(1) The promoter is required to request the Secretary’s endorsement for the sale of admission rights, charges, or fees not later than ten (10) days before the date on which said sale begins. Failure to meet this requirement shall result in the imposition of administrative fines as provided in §§ 33001 et seq. of this title.
(2) Along with the endorsement, the promoter shall post a bond to the order of the Secretary in the form and manner established by the Secretary through regulations, which shall cover the amount of the taxes on admission rights, charges, or fees, as well as the payment of any interest, fines, and penalties that could be imposed pursuant to this part.
(3) The promoter shall have a non-deferrable term, which shall not exceed five (5) business days after the presentation of each public event, to claim the adjustment for any endorsed tickets not sold and, consequently, the redemption of the bond.
(kk) Telecommunications services.—
(1) Shall include the following services:
(A) Transmissions or transfers by electronic media of voice, video, audio, or any other type of information or signal to a fixed point or between two fixed points;
(B) calls to 800 numbers through which a user is allowed to make a toll-free call. This service is usually marketed under toll-free numbers “800”, “855”, “866”, “877”, and “888”, and any other numbers designated by the Federal Telecommunications Commission;
(C) calls to 900 numbers through which a person permits his/her subscribers to call his/her telephone to receive a prerecorded message or a live service. The charges for this service do not include collection services provided to the subscriber by the telecommunications service provider and the charges for some good or service sold to the person who makes the call. The 900 number service is typically marketed under the name “900” and any other subsequent number designated by the Federal Telecommunications Commission;
(D) fixed wireless services through which radio waves are transmitted between two fixed points;
(E) the lease for the use of beepers or paging services that allow the transmission of coded messages for the purpose of activating a beeper. Said transmission may include messages or sounds;
(F) prepaid calling services that permit exclusive access to telecommunications services that have been prepaid to originate calls using an access number or code to be dialed manually or digitally, and which is sold in units or by its monetary value, which decreases with use;
(G) prepaid wireless calling services that grant the right to use the prepaid wireless telecommunications service through the sale in units or by its monetary value, which decreases with use;
(H) private communication services that entitle a subscriber to have priority or exclusive access to use a communications channel or group of channels between two points, except in the case of services acquired by the Puerto Rico Police Department to those effects;
(I) calls generated through a coin operated telephone service that provides telephone service when a coin is deposited in a telephone, and
(J) other value-added data management services, excluding voice transmission using computer software as to the contents, form, or coding of the information for purposes other than the transmission or transfer of said information;
(K) mobile wireless transmission services.
(2) Shall not include the following services or charges:
(A) Data or information processing that allows the generation, acquisition, storage, processing, withdrawal, and delivery of information through electronic transmission to a purchaser when the main objective of said transaction is the acquisition by said purchaser of the information thus managed or processed;
(B) installation and maintenance of cables or equipment at the client’s facilities;
(C) charges for the use of tangible personal property;
(D) publicity, but not limited to the yellow pages of the phone book;
(E) billing to and collecting from third parties;
(F) Internet access;
(G) audio or video programming services of radio or television programs regardless of the medium, including the broadcasting, transfer, and channeling of said services;
(H) incidental services;
(I) the sale or transfer of products in digital format, including computer software, music, video, and reading materials, among others;
(J) service charges required by any local or federal law, and
(K) services to other telecommunications companies.
(3) Incidental services are those services associated with the provision of telecommunications services, including the following:
(A) Conference bridging services whereby two or more participants are linked in a video or voice joint transmission and which may include providing a connecting telephone number. Conference bridging services do not include telecommunications services used to access the conference call;
(B) detailed telecommunications billing services to provide details or information related to the calls made from a telephone number and other details related to the phone bill;
(C) directory assistance whereby the user is provided with the telephone number or address of a particular place;
(D) vertical services whereby the user is provided with one or more advanced service options, such as caller ID and multiple calls, among others, and
(E) voice mail services whereby the user is able to receive, save, and send messages. Voice mail services do not include any vertical service required for the subscriber to be able to use the voice mail service.
(4) The term “service charges required by any local or federal law” shall include the following:
(A) 911 emergency services, and
(B) the universal service fund.
(ll) Designated professional services.— Means legal services and the following professional services, as regulated by their respective Boards of Examiners attached to the Department of State of Puerto Rico:
(1) Agronomists;
(2) Architects and landscape architects;
(3) Certified public accountants;
(4) Real estate brokers, salespersons, and companies;
(5) Professional draftsmen;
(6) Professional real estate appraisers;
(7) Geologists, and
(8) Engineers and land surveyors.
(mm) Cable or Satellite television services.— Means the distribution of video programming by cable or satellite, including the installation, leasing, or sale of related equipment.
(nn) Taxable services.—
(1) Means any service rendered to any person, including:
(A) Storage of tangible personal property, excluding motor vehicles and all types of foodstuffs;
(B) leasing; including operating leases that constitute a daily rental; leases of motor vehicles that are essentially equivalent to a purchase, as such term is defined in § 30127(a)(3)(D) of this title, shall not be considered taxable services;
(C) computer programming, including modifications to pre-designed programs;
(D) installation of tangible personal property by the merchant or a third party, and
(E) repair of tangible personal property.
(2) Taxable services shall exclude the following:
(A) Services rendered to a person engaged in an income-producing or trade or business-related activity, except the following;
(i) Bank fees, but limited to charges and fees that financial institutions charge to their commercial customers for the management of demand accounts and other types of deposit accounts to cover the costs of specific transactions and overdrafts. This definition excludes any kind of commission and/or fee related to investment banking transactions such as the issue of debt instruments and financial instruments in public and private stock markets.
(ii) collection services,
(iii) security services, including armored services and private investigations, except for security services provided to resident or tenant’s associations,
(iv) cleaning services,
(v) laundry services,
(vi) real property and tangible personal property repair and maintenance services (non-capitalizable),
(vii) telecommunications services, as defined in subsection (kk) of this section, and
(viii) waste collection services.
Notwithstanding the foregoing, if the services indicated above are provided by a person who is part of a controlled group of corporations or a controlled affiliated group, as defined in §§ 30044 and 30045 of this title, by another person that is part of one of said groups, the same shall be subject to the exception herein provided.
(B) designated professional services;
(C) services provided by the Government of Puerto Rico, including sewer services;
(D) educational services, including registration fees;
(E) interest and other charges for the use of money; excluding fees for services rendered to a person engaged in an income-producing or trade- or business-related activity charged by financial institutions, as defined in § 30137(f)(4) of this title;
(F) insurance services and commissions, including any issue of an insurance contract, including, but not limited to life, health, property, and contingency insurance, warranty and extended warranty service contracts, title deeds, reinsurance and excess limit, disability, credit insurance, annuities and bonds, and service fees for the issue of the aforementioned instruments;
(G) health or medical-hospital services;
(H) services rendered by persons whose annual volume of business does not exceed fifty thousand dollars ($50,000). When a person belongs to a controlled group as defined in § 30044 of this title, the volume of business of said person shall be determined considering the volume of business of all members of the controlled group. In case of a person who is an individual, the volume of business shall be determined considering the volume of business of all of his/her income-producing, or trade or business-related activities.
(I) Services rendered by a “tax return, statement, or refund claim specialist”, as defined in §§ 33001 et seq. of this title. For these purposes, the services excluded shall only be those related to the preparation or revision of tax returns, statements, or refund claims regarding the taxes imposed by this Code or by the United States Internal Revenue Code.
(oo) Dietary supplements.— Any product, other than tobacco, used to supplement a diet and that:
(1) Contains one (1) or more of the following dietary ingredients:
(A) Vitamins;
(B) minerals;
(C) herbs or other botanicals;
(D) amino acids;
(E) dietary substances used to supplement a diet, increasing the total dietary intake, or
(F) concentrates, metabolic supplements, components, extracts, or the combination of any of these ingredients, taken as pills, tablets, capsules, powder, softgels, gelcaps or in liquid form, or if taken in a manner other than the aforementioned, not presented as conventional food and not considered as the sole course of a meal or of a diet.
(2) Requires to be identified as a dietary supplement on the label that contains the nutritional data, as provided in 21 CFR Section 101.36.
(pp) Tobacco.— Cigarettes, as defined in § 31624 of this title, cigars, chewing or pipe tobacco, or any other item that contains tobacco, as said products may be defined in the future.
(qq) Combined transaction.—
(1) The retail sale of two (2) or more tangible personal properties or services, whereby the properties or services:
(A) Are different and identifiable, and
(B) are sold at a non-itemized total price.
(2) A “combined transaction” excludes the sale of any tangible personal property or service whose sales price varies or is negotiable, based on the selection by the purchaser of the properties or services included in the transaction.
(3) Different and identifiable property or services exclude:
(A) Packing materials such as containers, boxes, sacks, bags, and bottles; other materials such as wrapping paper, labels, and instruction manuals included in the “retail sale” of tangible personal property and that are incidental or immaterial to the “retail sale”. Some examples of packing materials that are incidental or immaterial are: plastic bags used at supermarkets, shoe boxes, laundry bags, and postal service boxes and envelopes.
(B) Taxable tangible personal property obtained free of cost with the purchase of other property or service. Tangible personal property is free of cost if the sales price of the property or service acquired does not vary because free of cost property has been included.
(4) The term “non-itemized total price” excludes the price identified separately as tangible personal property or services in documents furnished to the purchaser, such as sales invoices, sales receipts, contracts, service contracts, lease contracts, periodic notices of rates and services, price lists, or any other similar document.
(5) A transaction that complies with the definition of combined transaction shall not be deemed to be a combined transaction if it is:
(A) A retail sale of taxable tangible personal property and of a tax-exempt service, where the taxable tangible personal property is essential for using the exempt service, is exclusively provided in connection with the exempt service and when the actual object of the transaction is to render the exempt service;
(B) a retail sale of more than one service in which one of the services provided is essential for using or obtaining a second exempt service, the first service is exclusively provided in connection with the second exempt service, and when the actual object of the transaction is to render the second service, or
(C) a transaction that includes exempt and taxable tangible personal property in which the purchase or the sales price of the taxable property is immaterial.
(i) For these purposes, the term “immaterial” means that the purchase or the sales price of the taxable tangible personal property does not exceed ten percent (10%) of the total sales or purchase price of the combined tangible personal properties.
(ii) The merchant shall use the purchase or the sales price of the taxable tangible personal property to determine whether the taxable tangible personal property is immaterial.
(iii) The merchant shall use the full term of the service contract to determine whether the price or value of the property is immaterial.
(rr) Use.— Includes the exercise of any right or power over a taxable item incidental to its ownership thereof, or interest on said item, including the use, storage, or consumption of any tangible promotional goods imported into Puerto Rico. The term “use” shall not include:
(1) When the taxable item is subsequently the object of commerce in the ordinary course of business in Puerto Rico;
(2) the use of taxable items that constitute normal baggage and clothing of the tourists and visitors who arrive in Puerto Rico;
(3) the use of taxable items with an added value that does not exceed five hundred dollars ($500) and which and are introduced by residents of Puerto Rico arriving in Puerto Rico from abroad, and
(4) the use of taxable items temporarily introduced into Puerto Rico that are directly related to film production, construction, trade shows, seminars, conventions, or for other purposes, and which will be re-exported from Puerto Rico.
(ss) Sale.—
(1) Includes:
(A) Any transfer of title or ownership of taxable items, be it conditional, on installments, or otherwise, in any manner or by any means, in exchange for consideration or remuneration, including exchange, transfer, or licensing for use, among others;
(B) the production, manufacture, processing, or printing of taxable items in exchange for cause or consideration for the purchasers who, directly or indirectly, provide the materials used for the production, manufacture, processing, or printing;
(C) providing, preparing, or serving in exchange for cause or consideration, any taxable item for consumption inside or outside the premises of the person who provides, prepares, or serves said tangible personal property;
(D) the transfer of taxable items requested by mail or other communication media, including the Internet, to a merchant located in or outside Puerto Rico who receives the order and transports the property or delivers it to be transported, be it by mail or other means of transportation, to a person in Puerto Rico, and
(E) a financial lease that constitutes a purchase according to generally accepted accounting principles, except for those financial leases that meet the requirements set forth in Section 1(c) of Act No. 76 of August 13, 1994, as amended.
(2) For purposes of this subsection, the term “sale” excludes the exchange exempt under §§ 30041 et seq. of this title, and the sale or exchange of all or substantially all the assets of a business, outside the ordinary course of business.
(tt) Retail sales.—
(1) The sale, lease, or licensing of taxable items to a purchaser or to any person for any purpose, except as provided in this part, other than the resale, sublet, or sublease. This includes all those transactions that may be executed in lieu retail sales, as defined in this part. A retail sale includes the sale of taxable items which are used or consumed by a contractor in the fulfillment of a contract to the extent that the cost of the property is fixed or charged as a direct-cost item to said contract, the title of which property is acquired or transferred to the purchaser pursuant to the contract. The term “contractor” includes principal contractors and their subcontractors.
(2) As used in this part, the terms “retail sale”, “use”, “storage”, and “consumption” do not include materials, containers, labels, sacks, bags, or similar items that accompany the product sold to a purchaser without which delivery of the product would be impossible due to the nature of the contents, and that is used only once for packing taxable items or for the convenience of the purchaser. When a purchaser pays a separate charge for packing materials, said transaction shall be treated as a retail sale of the packing material.
(uu) Gross sales.— The amount of all sales of taxable items as defined in this part, without any deduction whatsoever of any kind or nature, except as provided in this part.
Notice This section has more than one version with varying effective dates. Second of three versions of this section.
History —Jan. 31, 2011, No. 1, § 4010.01, retroactive to Jan. 1, 2011; June 30, 2013, No. 40, § 34.