Washington DC has a sales tax rate of 6%. Additional taxes apply to prepared food (10%) and hotel rooms (14.5%). DC residents pay income tax ranging from 4-8.95%. The tax on bonuses over $1 million is 37%. DC also collects property taxes and unemployment insurance tax from employers. While most goods are taxable, groceries, medicine, and residential utilities are exempt. Contractors pay sales tax on items used for government contracts. The UNM Foundation, as a non-profit, is exempt. DC taxes those with nexus, meaning a physical or economic presence.
DC sales tax returns are due the 20th day of the month following the reporting period. To file DC taxes, calculate taxes owed, file a return, and make payment by the due date. DC requires sellers with a sales tax permit to file a return even if they don’t owe tax.
If you don’t have sales tax nexus in DC, you generally don’t need a permit. Nexus means you have a tax collection responsibility. Once you have DC nexus, register for a sales tax permit. You may need to comply with DC sales tax laws if you have nexus triggered by:
- Business location in DC
- Staff conducting business in DC
- Property owned or leased and warehoused in DC
Private universities’ purchases for educational purposes are exempt from DC sales tax. Sales to student groups are taxable. In DC, sales of food and alcohol for on-premises consumption are taxed at 10%. Off-premises alcohol sales are taxed at 10.25%.
You can submit a DC Sales Tax Permit application in person. Processing takes 7-10 business days. There is no fee to apply. You can file and pay DC sales tax online, by mail, or in person.