Do I pay taxes if I live in Puerto Rico?

Yes, you pay taxes in Puerto Rico, but the structure is different from the US mainland. Puerto Rico residents do not pay federal income tax on Puerto Rico-sourced income. Instead, you pay Puerto Rico income tax, which has its own progressive bracket system. There is also an 11.5 percent sales tax (one of the highest in the US system), property tax (typically lower than mainland averages), and payroll taxes including Social Security and Medicare. The big draw for many expats is Act 60, which offers significant tax incentives for qualifying businesses and individual investors who become bona fide residents. Tax planning for a Puerto Rico move is genuinely complex, and a CPA familiar with both US and PR tax codes is worth the consultation. For cost-of-living context, see our Puerto Rico page.