Puerto Rico IVU: the quick guide
The Sales and Use Tax shows up on almost everything you buy, yet few people know how it's composed, what's exempt and how to undo it when all you have is the receipt total.
Where the 11.5% comes from
The standard rate combines 10.5% state and 1% municipal. It applies to most retail sales of goods and many services.
There's also a special 4% rate for certain business-to-business and designated professional services.
What doesn't pay IVU
The most common examples: most unprepared groceries, prescription drugs and purchases made with PAN (NAP) funds.
Prepared food — hot food, restaurants, ready-to-eat meals — pays the full rate. Where the line falls is defined by Hacienda, not the store.
Backing the price out of a total
To undo IVU you divide, not subtract: price = total ÷ 1.115. Subtracting 11.5% from the total gives the wrong number because the percentage was applied to the price, not the total.
Example: a $50.00 receipt contains $44.84 of price and $5.16 of tax. The IVU calculator's reverse mode does this division for you.
IVU on sales and discounts
IVU is charged on what you actually pay after the store's discount. A $100 item at 30% off pays tax on $70, not $100.
Manufacturer coupons can be treated differently case by case; when in doubt, check the receipt — the tax charged is itemized.