On May 16, 2016, Governor Alejandro García Padilla enacted Act No.46-2016 to amend Act No. 42-2015 (as amended, the “Act”). The Act was adopted to help reduce tax evasion.

As originally enacted, the Act required any person offering services in Puerto Rico for which a license or authorization from the government must be obtained, to provide their clients with the option of at least two methods of payments, such as credit or debit cards, cash, checks, certified checks, money orders, electronic transfer of funds, payments through the internet or direct payments, of which at least one of the alternatives must be payment via credit or debit card, electronic transfer of funds, the internet or direct payment.

With the new amendments, the Act now imposes a similar requirement on all commercial establishments operating in Puerto Rico as they must provide their clients with the option of at least two methods of payment. In the case of commercial establishments, one of the two payment alternatives must be through a credit or debit card. Commercial establishments with an annual volume of business of less than $50,000, financial institutions and bona fide farmers designated as such by the Department of Agriculture are excluded from these requirements.

The Act defines “commercial establishment” as any natural or juridical person engaged in the sale, lease, or transfer of any type of goods or services in Puerto Rico.

Both the Department of Treasury and the Department of Consumer Affairs (“DACO”, for its Spanish acronym) are entrusted with administering the Act. In order to do so, they are empowered to adopt regulations to enforce the provisions of the Act.

Any person that violates the Act’s provisions will incur in a misdemeanor, and, if convicted, first time infractions will be subject to a fine of no less than $500 and no more than $3,000. Subsequent violations will be subject to a fine of no less than $5,000 and no more than $10,000. In addition, both Departments may impose administrative fines of no less than $1,000 and no more than $5,000 for violations of the Act’s provisions.

All service providers and commercial establishments that provide goods or services in a physical office or establishment in Puerto Rico must install an easily visible and legible sign specifying the available payment methods. Those service providers or commercial establishments that do not offer their services or goods from an office or establishment must inform their clients of the Act’s provisions and payment alternatives available, either verbally or in writing.

The amendments will be effective 30 days after their approval; that is, June 15, 2016.

For further information about this new law, or should you need assistance in revising your policies, please contact any of the attorneys of the O’Neill & Borges’ Consumer and Retail Law Practice Group.