2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 17 - Internal Revenue Code of 2011 (§§ 30001 — 33423) › PART V - Sales and Use Tax (§§ 32001 — 32171) › Chapter 1042 - Imposition, Collection, and Person Liable (§§ 32021 — 32031) › § 32023 - Rules for determining the source of revenues generated by the sale of taxable items

(a) The source of the sale of tangible personal property shall be determined using the following rules:
(1) When the property is delivered to the purchaser at the facilities of the merchant, said facilities shall be treated as the source;
(2) when the property is not delivered to the purchaser at the facilities of the merchant, the place where the property is received by the purchaser, including the address indicated to the merchant for the transportation and delivery of the property, shall be treated as the source;
(3) if clauses (1) and (2) do not apply, the source of the sale shall be the address of the purchaser as it appears in the records kept by the merchant in the ordinary course of business, when the use of said address does not constitute an act in bad faith;
(4) if clauses (1) through (3) do not apply, the address of the purchaser obtained in the sales process, including the address which appears in the payment instrument of the purchaser, if no other is available, shall be treated as the source to the extent that the use of said address does not constitute an act in bad faith, and
(5) when none of the above paragraphs apply, including the situation whereby the merchant does not have sufficient information to apply said rules, then the source of the sale shall be determined in reference to the address from where the tangible personal property was sent or shipped.
(b) The source of the sale of taxable services, except for telecommunications, cable or satellite television services, and the leasing of tangible personal property, shall be the place where the services are rendered.
(c) The source of the sale of telecommunications services shall be as follows:
(1) In the case of telecommunications services provided by wireline, the source shall be the place where two of the following three events occur: where the service originates, terminates, or is billed, and
(2) in the case of wireless telecommunications services, including prepaid services, the source shall be the location of the place of primary use of the client, which shall be the residential or business address of the latter.
(d) In the case of cable or satellite television services, the source shall be the location of the place of primary use of the client, which shall be the residential or business address of the latter.
(e) In the case of lease of tangible personal property, the source of the sale shall be as follows:
(1) In the case of any lease that requires recurrent periodic payments, the source of the first payment shall be determined according to the provisions applicable to the sale of tangible personal property. The source of subsequent payments shall be according to the primary location of the leased property during the period covered by the payment. The primary location of the leased property shall be the one indicated by the lessee and available to the lessor in the records the latter keeps in the ordinary course of business, to the extent that the use of said address does not constitute an act in bad faith. The primary location of the leased property shall not be considered altered by the intermittent or temporary use of the property leased in another location, as would be the case of leased commercial property that accompanies an employee during a business trip.
(2) In the case of any lease that does not entail periodic payments, its source shall be determined according to the provisions applicable to the sale of tangible personal property.
(f) It is hereby provided that the rules set forth in this section shall be exclusively applied to the imposition of the sales or use tax, and that they shall not apply nor may be used additionally for income tax purposes.
History —Jan. 31, 2011, No. 1, § 4020.03, retroactive to Jan. 1, 2011.