District of Columbia: Sales Tax Handbook
District of Columbia Sales Tax Rate
|State Sales Tax||Local Sales Tax Range||Average Local Tax||Average Combined Tax||Max Combined Tax|
2023 District of Columbia Sales Tax Handbook
District of Columbia Table of Contents
- List of Local Sales Tax Rates
- Sales Tax Calculator
- Sales Tax Exemption Certificates
- Sales Tax Info For Businessowners
- Taxable vs. Non-Taxable Purchases
- Sales Tax on Cars & Vehicles
- More Information
District of Columbia's Sales Tax By The Numbers:
District of Columbia has a higher-than-average state sales tax rate, but the actual sales tax rates in most District of Columbia cities are lower than average when compared to states that allow localities to collect sales taxes (District of Columbia does not).
Rankings by Average State + Local Sales Tax:
Ranked 38th highest by combined state + local sales tax
Ranked 5th highest by per capita revenue from state + local sales taxes ($1,773 per capita)
Rankings by State Sales Tax Only:
Ranked 8th highest by state sales tax rate
Printable PDF District of Columbia Sales Tax Datasheet
District of Columbia has a statewide sales tax rate of 6%, which has been in place since 1949.
Unlike many other states, District of Columbia doesn't allow municipal governments to collect a local option sales tax. Therefore, sales tax rates will be the same across the entire state.
This page provides an overview of the sales tax rates and laws in District of Columbia. If you are a business owner and need to learn more about things like getting a sales tax permit, filing a sales tax return, or making tax-exempt purchases for resale see the District of Columbia Sales Tax Handbook's Table of Contents above.
What is exempt from sales taxes in District of Columbia?
Many states have special sales tax rates that apply to the purchase of certain types of goods, or fully exempt them from the sales tax altogether. Here's how District of Columbia taxes five types of commonly-exempted goods:
For more details on what types of goods are specifically exempt from the District of Columbia sales tax see District of Columbia sales tax exemptions. To learn more about what types of transactions are subject to the sales tax to begin with, see what purchases are taxable in District of Columbia? Taxation of vehicle purchases in particular are discussed in the page about District of Columbia's sales tax on cars.
Are services subject to sales tax in District of Columbia?
"Goods" refers to the sale of tangible personal property, which are generally taxable. "Services" refers to the sale of labor or a non-tangible benefit. In District of Columbia, specified services are taxable.
About the District of Columbia Sales Tax
The District of Columbia has relatively simple sales tax rate, which is collected on a district level (with no additional local sales taxes). There are several special tax rates that apply to the purchase of certain items:
- 10% on liquor and alcohol (sold for off-premises consumption)
- 10% on restaurant meals and takeout (1% allocated to the Convention Center Fund)
- 10% on vehicle rentals
- 18% on parking fees (allocated to the Washington Metropolitan Area Transit Authority)
- 14.5% on hotels and transient accommodations (4.45% allocated to the Convention Center Fund)
- 6% on medical marijuana (allocated to the Healthy DC and Health Care Expansion Fund)
The District also levies a 5 cent tax for each bag provided by a seller (who is selling foods or any sort of alcohol) at the moment of the sale. The majority of the amount levied is currently donated to the Anacostia River cleanup fund, with 1-2 cents going to the retailer who collected the tax.
While Washington, DC used to have two sales tax holidays each year, both have since been repealed. Rates and sales tax laws are specified in the DC Code, Title 47, Chapters 20 and 22.
Is the District of Columbia Sales Tax Destination-Based or Origin-Based?
District of Columbia is a destination-based sales tax state, which means that sales tax rates are determined by the location of the buyer when the transaction is completed. This means that, for orders placed via the internet/mail by a customer within District of Columbia from a District of Columbia vendor, the vendor must collect a sales tax rate applicable at the buyer's address (including any applicable local sales taxes). This can significantly increase the complication of filing your sales tax return, because different sales tax rates must be charged to different buyers based on their location.
Is District of Columbia a Streamlined Sales Tax State?
District of Columbia is not a member of the Streamlined Sales and Use Tax Agreement. The SSUTA is an agreement adopted by about half of states that ensures that their sales tax laws are simplified to lower the costs associated with compliance.
Contact the District of Columbia Office of Tax and Revenue
The District of Columbia Sales Tax is administered by the District of Columbia Office of Tax and Revenue. You can learn more by visiting the sales tax information website at otr.cfo.dc.gov.
Learn More: Our Book Recommendations
If you would like to learn more about how to manage your District of Columbia sales taxes, we recommend the following books:
Small Business Taxes For Dummies
This introductury book assists both current and aspiring small business owners with important tax planning issues, and covers a wide variety of small business tax topics.Buy on Amazon
A Guide to Sales and Use Tax
This book provides information and insights on how to comply with a multitude of sales and use tax laws and regulations. This is our recommendation if you need an in-depth look into sales taxes.Buy on Amazon
Simplify District of Columbia sales tax compliance! We provide sales tax rate databases for businesses who manage their own sales taxes, and can also connect you with firms that can completely automate the sales tax calculation and filing process. Click here to get more information.
District of Columbia Sales Tax Rates by Zip Code:
Need an updated list of District of Columbia sales tax rates for your business? Download our District of Columbia sales tax database!