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Not a state of the union, but a commonwealth of the United States, Puerto Rico is a study in paradox. To begin, it is in the unenviable position of having the highest sales tax in America, at 11.5%. This occurred on July 1, 2015, when the Sales and Use Tax (SUT) was increased from 7% to 11.5% in an effort to start paying off the island’s enormous and long-standing debt, valued at $72B (in January 2016). As of April 2016, the SUT is transformed to a value added tax (VAT), also at 11.5% and applied to a wider range of production.
In spite of the heavy sales tax described above, Puerto Rico is an anomaly in terms of the federal capital gains tax. This tax applies in all 50 states to a maximum rate of 28% on all investments, including collectibles (which is the category for precious metals). It is due when you make a profit on the sale of an investment, which means that if you buy and then sell for a profit, you will pay a tax on it. BUT NOT IN PUERTO RICO, NOT FOR “BONA FIDE” RESIDENTS OF PUERTO RICO. This means you must live in Puerto Rico for 183 days of the year, and satisfy some other qualifications, found in the link below.
There is no exemption from the SUT/VAT on the sale of precious metals in Puerto Rico.
If you want to purchase tax-free metals, buy online, in a state that allows for this, or overseas.
Source: https://www.irs.gov/pub/irs-pdf/p1321.pdf
With a median household income of $18,660, residents of Puerto Rico (Boricuas) are, generally speaking, the most impoverished of any citizens in the United States of America. That median income is roughly half of that of the poorest of the 50 states (Mississippi), and nearly a third of the US national average. 41% of the Puerto Rican population lives below the poverty line, after generations of an agrarian existence based on sugar, tobacco and coffee. There was also mining of gold and silver but not to the extent of other Latin American territories.
After naming all the challenges and realities of this commonwealth of the USA, Puerto Rico stands as a true paradox. This poorest territory of the USA is still classified as the most competitive economy in Latin America, based on a vibrant manufacturing sector that accounts for 46% of its GDP, producing pharmaceuticals, textiles, petrochemicals and electronics.
Puerto Rico is well known as a tourist attraction, which injects some $1.8 Billion per year into its economy. Millions of people, mostly other Americans, come to the island in the winter months, roughly a third of those on cruise ships. One typical tourist destination on the island’s northwest coast, Aguadilla, boasts a water park claimed as the largest in the Caribbean, a minor league baseball team, and an ice skating rink (in a climate that rarely drops below 70 degrees). Paradoxically, once again, tourism accounts for just 7% of GDP.
Note: GoldBroker cannot provide tax, legal, or other advice, so if you are not sure about the taxation to your personal circumstances, we recommend that you seek independent advice from a qualified professional.
All of these texts were accurate at the time of writing, but tax laws are constantly changing and it’s not easy to keep track of those changes. Because of this, we can not be held responsible for any false or out-of-date information.