Sales Tax in District of Columbia
District of Columbia doesn’t collect sales tax on most groceries, non-prescription drugs and prescription drugs. In general, sales of food are subject to sales and use tax unless sold for consumption off the premises and is not a taxable prepared food.
Use Tax
Use tax is a sales tax on purchases made outside one’s state of residence for taxable items that will be used, stored or consumed in one’s state of residence and on which no tax was collected in the state of purchase.
Registration and Tax in Washington DC
After your Washington DC business is formed, you’re required to register it with the DC Office of Tax & Revenue (OTR). Registering your Washington DC business for tax purposes is free.
Tax Rates and Specifics
- In the District of Columbia, sales of food, drink, and alcohol for consumption on-premises prepared by restaurants, bars, and similar establishments are subject to sales tax at a rate of 10%.
- Goods that are subject to sales tax in Maine include furniture, home appliances, and motor vehicles. Groceries, prescription medicine, and gasoline are all tax-exempt.
- The general sales tax rate in Washington DC is 6.00%. Maryland’s general sales tax rate is 6% with no general local rates.
Tax on Food and Alcohol in DC
- What is the tax on food and alcohol in DC? The Washington, DC sales tax rate is 6%. Food and Alcohol Have Their Own Taxes. Alcohol is taxed at 10.25%. So a $10 bottle of wine costs $11.03. When you go to a restaurant, the tax on your meal is 10%. So a $100 restaurant bill is $110 before tipping.
- Alcohol Purchased at Bars and Restaurants Also Has a 10% Tax. So it’s cheaper tax-wise to drink at a store. But bars mark up prices.
- There’s a 10% Tax on Sporting Events and Merchandise.
Additional Information
- Net income of corporations in the District on a combined reporting basis. Corporations must pay a minimum tax as follows: $250 minimum tax, if DC gross receipts are $1 million or less. $1000 minimum tax, if DC gross receipts are more than $1 million.
- All food or drink sold for immediate consumption is subject to the District sales tax.
- Prepared food is defined by law as any food where the seller combines two or more food ingredients and sells it as a single item.
- Prepared food sold for immediate consumption has a 10% tax in District of Columbia.
Tax Regulations
- Generally, sales of food, drink, and alcohol for consumption at restaurants and bars are subject to a 10% sales tax in DC.
- DC charges sales tax on most goods and some services at 6%.
- Use tax applies if goods purchased out of state are used in DC.
- Sales tax typically applies to shipping costs if the item shipped is taxable in DC.
- Some states fully tax groceries, others exempt them entirely or tax them at a reduced rate.
- The highest liquor taxes nationwide are in DC. Spirits face the stiffest rates. Federal and DC taxes both apply.