Business entities that on January 1 own personal property that is used to conduct business in Puerto Rico are subject to the personal property tax in the municipality where it is located, unless otherwise exempt. Such tax is computed on the net book value of taxable property, some exemptions may apply. The maximum tax rate is 9.83% and varies depending on the municipality in which the taxable property is located. Taxable property normally includes cash on hand, inventories, materials and supplies, furniture and fixtures, and machinery and equipment used in the business. A minimum residual value is assigned to items which are substantially depreciated. Certain personal properties, including intangible properties, are exempt. The Municipal Revenue Collection Center (CRIM), however, understands that computer software is not exempt as an intangible property.
A personal property tax return must be filed on or before May 15 of each year. A penalty of 5% per month up to a maximum of 25% is imposed for late filing of the return, unless it is shown that failure to file is due to reasonable causes and not to wilful neglect. Taxpayers with an expected personal property tax liability in excess of one thousand dollars ($1,000) are required to make estimated payments in four equal instalments on or before the following dates: August 15, November 15, February 15, and May 15.