A Commonwealth law establishes the right of every municipality to
impose and collect Municipal License Taxes (Patentes Municipales
). The same law establishes the maximum limits that may be imposed
and certain exceptions. Each municipality establishes its own rates,
not to exceed the limits established by law.
The tax is based on volume of business. Most for-profit activities
that generate revenues in excess of $5,000 per year are covered.
Taxpayers have until April 15th each year to file a report. Payments
are due July 1st and January 1st. When payment is made along with the
report, a 5% discount is allowed. New business activities should
notify the municipality within thirty days after operations begin.
If annual sales volume exceeds one million dollars, the report should
be accompanied by financial statements audited or reviewed by a
Certified Public Accountant. For volumes under one million dollars, a
copy of the taxpayer's corresponding Puerto Rico income tax return
should be included.
Contact the Director of Finances at City Hall (Director de Finanzas -
Alcaldía Municipal) in your municipality for additional information.
For further details, see our section on Doing business in Puerto Rico.