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FOR AFFECTED ACCOUNTS IN P.R. ONLY
We would like to inform you of two recent changes to the tax laws in Puerto Rico that will affect your UPS account.
If you ship items into the Island, you may already be aware that the Puerto Rico House of Representatives and the Senate passed an amendment to Law 120 on October 31, 1994, that immediately eliminates the General Excise Tax applicable to taxable goods being imported into Puerto Rico.
As a result, effective immediately, UPS will no longer prepay this tax on your behalf therefore you will no longer see the $5 charge for this service reflected on your bill.
The amendment also grants for a credit applicable to importers who paid excise tax on articles and inventory imported to Puerto Rico before the amendment that are not sold before November 15, 2006.
The Excise Tax applicable to special products like cement, certain imported plastic products, cigarettes, gasoline, aviation fuel, diesel, crude oil, motor vehicles and alcoholic beverages will still apply and has not been eliminated. However, effective immediately, UPS will no longer be prepaying this tax on behalf of our customers.
If you ship items within the Island, you may also know that on July 4, 2006, the Governor of Puerto Rico signed into law Act 177, also known as the Tax Fairness Act Puerto Rico Tax Reform (the "Law"). This new law will be effective after November 14, 2006 and will affect the services provided by UPS.
Specifically, the new law establishes a General Sales and Use Tax (SUT) applicable to the sale and/or use of goods and provision of services in Puerto Rico. This Sales and Use Tax is applicable at the following rates:
- 5.5% rate at the State level
- up to 1.5% at the Municipal or local level
While services in general, including those provided by UPS on intra-island shipments, are included in the definition of taxable services under the Law, it also provides for an exemption from the SUT in cases where the service recipient is a person engaged in a trade or business in PR.
In order to receive the exemption, the regulations require service providers like UPS to obtain a copy of a signed and completed "Exempt Purchase Certificate" from its customers. The document needs to be kept by UPS for a period of six (6) years and will support the application of the SUT exemption for this period.
For that reason, we kindly request that your company forward us a copy of your "Exempt Purchase Certificate" by November 15, 2006. That will enable us to apply to our service fees the business to business exemption mentioned above. Otherwise, we may be required to include in your invoice the new Sales and Use Tax after the effective date.
If you have any questions, please contact your Account Executive or our Customer Service Department at 1-800-PICK-UPS.
Sincerely
Jorge Castillo
Country Manager
Puerto Rico
FOR AFFECTED ACCOUNTS IN THE U.S. ONLY
Dear Client:
We would like to inform you of two recent changes to the tax laws in Puerto Rico that will affect your UPS account.
If you ship items into the Island, you may already be aware that the Puerto Rico House of Representatives and the Senate passed an amendment to Law 120 on October 31, 1994, that immediately eliminates the General Excise Tax applicable to taxable goods being imported into Puerto Rico.
As a result, effective immediately, UPS will no longer prepay this tax on your behalf therefore you will no longer see the $5 charge for this service reflected on your bill.
The amendment also grants for a credit applicable to importers who paid excise tax on articles and inventory imported to Puerto Rico before the amendment that are not sold before November 15, 2006.
The Excise Tax applicable to special products like cement, certain imported plastic products, cigarettes, gasoline, aviation fuel, diesel, crude oil, motor vehicles and alcoholic beverages will still apply and has not been eliminated. However, effective immediately, UPS will no longer be prepaying this tax on behalf of our customers.
If you have any questions, please contact your Account Executive or our Customer Service Department at 1-800-PICK-UPS.
Sincerely
Jorge Castillo
Country Manager
Puerto Rico
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