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Prepare the PRPUERTORICO return

This article applies to:Avalara Returns for Accountants

Use this page as a reference when you're preparing the Puerto Rico state return with municipal taxes reported on the state return (typical for taxpayers with no physical presence in Puerto Rico). You may want to bookmark the Puerto Rico Department of Revenue website for additional information about sales and use tax in PR.

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Important

This return uses gross down calculation logic, which means that the gross sales number is used to calculate the total tax due.

Before you begin

Steps

  1. Find the return you want to prepare.
    1. In Returns for Accountants, go to Returns > Filing tasks.
    2. Select the return you want to prepare from the Form column.
      The return is prepopulated with the client's transaction data.
  2. Select Side pane > Prep Details, and check for any variance in the Difference column.
    This step helps you to identify any adjustment that you'll need to make to the return.
  3. Review the return, and make changes if necessary.
    Avalara recommends reviewing the return in the following order:
    • Line 7 - Total sales for the period: This line reports gross sales. When you adjust this amount, the taxable amount for Tangible personal property not attributed to location in Puerto Rico, line 2b is recalculated.
    • Lines 2a-2f: If these lines are grayed out, Avalara recommends using the USPRPUERTORICOPHYSICALLOCATIONS form to use the SUT2 worksheet for reporting taxable amounts. 
      • Line 2e reports the taxable admission and will populate based on the tax code provided within the transaction. If edited, line 2b is recalculated.
    • Taxable sales for food sales rendered at 6% and taxable services rendered at 4% in Puerto Rico are populated based on the tax codes provided in transactions. Edit lines 3a and 4a to reduce the tax due for TPP on line 2b. Tax is also allocated appropriately in step 10 in the form.
      • Taxable sales of prepare food for marketplace sales are not supported and can be edited.
      • If taxable services rendered must be allocated to the service category listed to line 4b-4d, Avalara recommends using the USPRPUERTORICOPHYSICALLOCATIONS form to use the SUT2 worksheet for reporting taxable amounts.
    • Line 5 - Exempt sales: This line reports the exempt sales. The recalculated taxable amount is reported on Line 2b.
      • Line 5a - Sales of exempt tangible personal property: By default, this line reports all non-taxable and exempt sales.
      • For exemption amount to report against lines 5b-5d, ensure to provide tax codes and/or entity use code in the transaction for them to populate.
    • Line 8: Consumer use will populate based on the transactions, and if edited, tax is recalculated in step 10 of the form.
    • Line 14a - Municipal tax on sale of tangible personal property not attributable to location in Puerto Rico or multilevel business: This line reports the 1% municipal tax. This amount is populated only if the transaction is required to be collected at the municipal rate. This field is editable and recalculates the total tax due.
    • Lines 1, 6, and 9: These lines on the return are not support on this form, and can be edited.
    • For bi-weekly prepayments, no filing calendars are supported in the console. Add any prepayment to the worksheet as a prior payment adjustment, and this is reported in line 15.
      • At the bottom of the return, an editable field is available for prior payment and credit. If edited, ensure the filing task also has the adjustment included.
  4. Select Save when you're finished preparing the return.
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