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Prepare the USPRPUERTORICOPHYSICALLOCATIONS return

This article applies to:Avalara Returns for Accountants

Use this page as a reference when you're preparing the Puerto Rico state return for taxpayers reporting municipal taxes separately (typically for taxpayers with 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

  • Add all your client's company locations in Returns for Accountants. For details, see Add a company location.
  • Include the corresponding location codes for all transactions associated with a company location.

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 the total gross sales.
      When you adjust this amount, the taxable amount in Line 2b: TPP not attributed to location in Puerto Rico is recalculated.
      Before adjusting the total gross amount, review the Schedule 2 SUT location worksheet, as the adjustment will flow back up to the first page of the return.
    • Review Schedule 2 SUT location worksheet.
      • Each physical location in Puerto Rico is listed by the location number.
      • Taxable sales to TPP in Puerto Rico are reported in Column A , which will populate based on the transaction.
        Taxable sales subject to 10.5% in Column B – D are not supported, but can be edited to recalculate line 2b.
        • Taxable admission on Line 2e is not listed on the SUT2 worksheet. Taxable amount will populate based on the tax code provided within the transaction, and if edited, it will recalculate line 2b.
      • Taxable sales for food sales (Column E) and taxable services rendered in Puerto Rico (Column F) is populated based on the tax codes used in transactions.
        • When the fields are edited, the value in line 2b is recalculated, reducing the taxable due on TPP.
        • Services for Column G - Column I are not supported but are editable and will recalculate the value in line 2b.
      • Sales of exempt tangible personal property (Col J): By default, this line reports all non-taxable and exempt sales.
        • For exemption amount to report against lines in Column K and L, tax codes and/or entity use code must be provided in the transaction for them to populate.
        • Exemption admission sales that are not listed on the SUT2 worksheet populate onto line 5c based on the tax codes and/or entity use code that must be provided in the transaction. If edited, taxable sales on line 2b are recalculated.
    • Consumer use will populate based on the transactions, and if edited, the tax will be recalculated in step 10 in 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. The field is editable and recalculates the total tax due.
    • Lines 1, 6, and 9 on the return are not support in this form, and can be edited.
    • For bi-weekly prepayments, no filing calendars supported in the console. Any prepayments must be added to worksheet as a prior payment adjustment and is reported in line 15.
      • At the bottom of the return, an editable field for prior payment and credit is available. 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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