The tip is calculated on the consumption, not the total with sales tax

This is a six-article law about one line on the receipt. It targets a very concrete practice: printing the suggested tip calculated on the total that already includes the tax, so that you end up tipping on the sales tax. The law does not set how much to tip — it describes it as voluntary — nor does it prohibit tipping: it only says what base it may be calculated on.

Any customer of a business operating in Puerto Rico. The law does not limit the type of business in its text: it says "every business", and although Article 3 mentions the restaurant industry or similar when speaking of the educational campaign, Article 1’s prohibition is written generally. There is no procedure or application: the rule applies to the receipt’s computation on its own.

• Being a customer of a business operating in Puerto Rico. The law requires nothing more for the computation rule to apply.Verified against the official source

• The receipt. It is where the breakdown shows: the consumption total, the Sales and Use Tax, the transaction total, and the suggested-tip lines, if any.

1. 1

   Step 1: The prohibition, as written

   Article 1 says: it is prohibited for any business operating in Puerto Rico to calculate the tip a customer voluntarily gives using as its base the transaction’s total price, including the Sales and Use Tax, by any manual or electronic computation method. That last phrase closes the door on the most common excuse: it does not matter whether a person did the math with a calculator or the point of sale did it automatically. It is prohibited either way.

2. 2

   Step 2: The positive rule: the consumption total only

   Article 2 leaves no room for interpretation: this Act establishes that the total to be considered for computing the tip a customer voluntarily gives shall be based on the consumption total only. The word doing the work is "only". If your bill has a consumption subtotal, a sales tax line and a total, the correct base is the first. Checking it is simple arithmetic: divide the suggested tip by the consumption subtotal and by the total with tax, and see which of the two gives the round percentage the receipt advertises.

3. 3

   Step 3: The tip remains voluntary

   It is worth pausing on a word the law repeats in both substantive articles: the tip is the one the customer gives **voluntarily**. Act 9-2018 sets no percentage, does not require leaving a tip, and does not prohibit the business from printing suggestions. The only thing it regulates is the calculation base. So the receipt’s suggested lines are just that, suggestions, and what this law requires is that they be correctly calculated.

4. 4

   Step 4: Who enforces it

   Article 4 names it: the Department of Consumer Affairs shall be the agency charged with enforcing this Act, through DACO’s inherent mechanisms, creating a regulation consistent with what is established here. And Article 5 hands it the sanctions: DACO shall have the power to set the fines and penalties it deems necessary under the regulation it sees fit to adopt to fulfill the law’s purposes. Article 6 gave it ninety (90) days from approval to adopt that regulation. We read the law, not the regulation, so we publish no fine amounts or complaint procedure here: the law itself contains neither.

5. 5

   Step 5: The educational campaign the law ordered

   Article 3 orders something that explains why the law exists: an educational campaign shall be carried out among the Department of Consumer Affairs, the Legislative Assembly and various entities related to the restaurant industry or similar, to educate not only businesses but also consumers themselves in the proper way to calculate and present tips on receipts. The law adds that to that end a collaborative agreement shall be signed and that the campaign shall be considered a public service one. That is, the Legislative Assembly understood the problem to be as much one of commercial practice as of customer unawareness.

Before the Department of Consumer Affairs, which Article 4 designates as the agency charged with enforcing this law and which Article 5 empowers to set the fines and penalties under its regulation. What we do not publish: the form, procedure or deadlines to file a complaint on this matter, or the fine amounts, because Act 9-2018 does not set them and we did not read the regulation it defers to.

• Accepting the suggested tip without checking which figure it is calculated on.
• Believing that if the point of sale did the math it is allowed: the law covers any manual or electronic method.
• Thinking the law requires you to leave a percentage: it describes the tip as given voluntarily by the customer.
• Throwing away the receipt, the only evidence of the computation.
• Looking in this law for the fine amount: the law hands it to DACO’s regulation.

These are the government pages this guide is based on.

• Departamento de Asuntos del Consumidor (DACO)

  DACO

  bvirtualogp.pr.gov

• Department of Consumer Affairs (DACO)

  DACO

  www.daco.pr.gov