New member here

Welcome to the forum!

For your tax questions you my want to talk to CPA or tax lawyer to make sure you get a sound professional advice.

The sales tax increase doesn't sound good at all. I guess I will be buying even more online than I do now.
One trick that seems to work pretty good is buying and paying something online and pick it up in the store.
I bought car parts from one of the chains online and didn't pay sales tax. A generator that I bought in Home Depot was $699 online and $869 in the store. I bought and paid online (with sales tax this time) but I saved $170 (plus tax) by buying online.

Thanks for your reply. This is my understanding. The tax will be charged to the retailer at the time they purchase their items and it is there responsibility to get the tax from the client at the time of the sale. I do not know how this will apply to items imported via internet and USPS. We do make a lot of purchases from the internet and have them shipped here plus I import items for my business. I still think that the savings on income tax to the Federal Reserve plus some state taxes or Puerto Rico tax will be greater than the raised consumer tax. One positive thing is that maybe Puerto Ricans will think twice before buying a lot of that wall mart junk. The Island is definitely going through some big changes and I have more thoughts about that for another time.

It's going up to 17%!?!

A 17% sales tax in a jurisdiction like PR that also has income tax, import tax, fees out the wazoo, etc., is outright economic suicide. So, no change there as far as PR's politicians are concerned! Still, raising it to that level is a drastic change for the worse. It will drive even more of the few earners left out of PR. What a bunch of idiots.

None are great - but this current government is truly a bunch of clowns; the worst since I first started to know PR in 1998.

That increase is outrageous!  They'll probably either raise the cost of items or tack on the tax afterward, sheesh!

But there will be no income tax up to something like 50,000.00. No capital gains tax if a person wants to rehab real estate for resale, Etc. the law is still being implemented. I try to see a positive side of situations and how to benefit.  No tax on fresh fruits and vegetables. Great if you are a farmer and or vegan.  You do not have to buy into Obama care. Of course the benefits would only apply to legal residency one of the few places where you can still retain your US citizenship.

The merchants will be charged tax upfront and it will be their responsibility to get it back when the sell the product. Might be different for manufacturers. This would be my situation

Oh, I guess I understand a bit better.  We are vegetarian so it wouldn't affect us.  Your farm sounds beautiful, Mrkpytn, and welcome to the forum!

Thanks

Seems like the revised tax code works well for you, Mrkptyn.

I don't think it will work well for most people considering relocating to PR or the average person who lives there.

You are probably correct. Only 38% of the population pay taxes at the moment so they would be hurt by the sales tax increase. One of the Walmart's here is the 4th busiest in the World. Our Walmart's in Ponce are always packed full of people. A lot of the purchases are seen strewn along the road side once the have been used. The silver lining is that it may curb unnecessary spending and only the heavy consumers will be taxed. The benefits seem to be directed towards people who can contribute to the local economy by bringing in their income source from outside the island and investing here and Also for farmers who live self sufficiently on their farms and can sell in a growing agricultural market.
Small businesses have shut down because of places like Walmart. If I need new cloths I go to the Salvation Army. There are a lot of items that could be produced here and marketed on the mainland. Just maybe I can introduce this concept here so others can benefit by understanding the new market strategies available on the internet. I think what is happening is a very  important issue to people who live here and who plan on coming. I want to look at it from all angles. This is more about structuring a new life than playing on the beach. It might be time to build community to work with the coming changes. Fortunately for people who do not want to invest in their community and learn how to take advantage of a no income tax system have the option of going to the mainland where more jobs are available and they can pay into Federal taxes. There have not been many jobs on the South Coast since the oil refinery shut down in the 60's and the area has been depressed since.  Ponce has been down for so long there is only up now. Most of my younger friends have left for the mainland before the new laws were even discussed. When 40% percent of the population is employed by the government and only 38% pay taxes it is a no brainer why it is in the condition that it is. What may happen as the real wealthy Americans move here as they are starting to do in San Juan and start moving their capital here the island will be like become like Hawaii where the locals who have not secured land or inherited land could be priced out of the island. Locals need to hang onto their land and put it to use before they loose it. Taxes are not high for land. I have no property taxes on my historic home in Ponce. A historic homes are very affordable and can have tax free status also. For heavy consumers living in Puerto Rico may not be so great but the planet may appreciate it.

Good points all, Mrkpytn.

I do love the historic homes of PR. It's too bad that so many of the old wooden ones have been destroyed by hurricanes or torn down. And regarding non-wood construction, I still cannot believe my eyes when I see a derelict one in OSJ.

Sounds like you've got a slice of HEAVEN, MrKpytn!

Hello again, having traveled in third world countries when I was younger there were always aspects that I appreciated like terrain, architecture, etc.  When I first came to Puerto Rico I realized some of those qualities and when I discovered Ponce with the its architecture and mountains and the fact that it was affordable I went through the process of buying a home. I did not know one person on the island and had no idea on how to buy something. It took me three years to do it but I finally bought a home and then a farm. This was 14 years ago. I have only been a partime resident but full time is happening next year as I now have businesses that allow me to do it and the new tax structure might work out better for me as my business grows.mark

That sales tax increase (to 16% by the way and not 17) is going to hit hard on people who earn 7.25 per hour and that's what many people get.
The government is trying frantically to find ways out of the debt crisis but I'm afraid this measure would make things worse for the island.

NomadLawyer wrote:

--snip-- this current government is truly a bunch of clowns; the worst since I first started to know PR in 1998.

I couldn't agree more!

16% to the State and 1% to the municipalities. I agree about the difficult changes ahead. If a person does not pay taxes it is all extra costs. Change is possible and supporting local farmers and eating fresh fruits and vegetables with no taxes would be workable. Eating healthy what a concept and gosh it would even be cheaper if you grew it yourself. Urban gardens work in Detroit. Cuba was in a much worse state when the Russians abandoned them and they had to resort to organic farming and it has revolutionized ther food industry according to the documentary "Green Revolution. There is a lot of available land around and it eating fresh fruits and vegetables could help the health crisis here too.

Very good points, Mrkpytn!