31. What are my payment options?
All payments must be made electronically. Payment options are ACH debit, ACH credit, e-Check, and credit card.

32. How is my fee calculated?
Please see the instructions on the Form FR-1500.

33. How can an organization be recognized as tax-exempt from the District’s franchise tax, sales tax or personal property tax?
The responsibility for establishing tax-exempt status with the District shall rest upon the organization.  An organization recognized as tax- exempt by the Internal Revenue Service is not automatically recognized and accorded  tax- exempt status under the laws of the District of Columbia.  In order to establish a tax-exempt status with the District, an organization shall file a Form FR 164 (Application for Exemption) with the Office of Tax and Revenue, Exempt Organizations, PO Box 556, Washington, D.C. 20044.

34. What type of exempt organizations may qualify for personal property tax exemption?
Semipublic institutions under the provisions of IRC § 501(c) (3) may qualify for personal property tax exemption.

35. What is the effective date of a personal property tax exemption?
The effective date for a personal property tax exemption shall be the July 1st following the date of the initial application request with the District.

36. What type of exempt organizations may qualify for sales tax exemption?
Semipublic institutions may qualify for sales tax exemption provided the organization has a location/office in the District of Columbia. The effective date for a sales tax exemption shall be the date the OTR issues the certificate of exemption.

37. What is a semipublic institution?
Semipublic institution means any corporation, community chest, fund or foundation, organized exclusively for religious, scientific, charitable, or educational purposes, including hospitals, no part of the net earnings of which inures to the benefit of any private shareholder or individual.

38. What type of exempt organizations may qualify for franchise tax exemption?
Generally, most organizations recognized as tax exempt by the Internal Revenue Service, except social clubs (IRC § 501(c) (7)).

39. What is the effective date of a franchise/income tax exemption?
The effective date for a franchise/income tax exemption shall be the date that OTR issues a letter of exemption.

40. What returns for tax-exempt organizations are to be filed with the District of Columbia?
If you file a form 990 or form 990-PF with the Internal Revenue Service, you are required to file a copy of the form with the District of Columbia. If you have unrelated business income and are required to file federal form 990-T, you must file Corporation Franchise Tax form D-20 on your unrelated business income. If you are required to file federal form 1120POL, you must file Corporation Franchise Tax Form D-20 on your taxable IRC Section 527 income. If you are subject to the DC personal property tax, you are required to file Personal Property Tax form FP-31.

Mail all exempt organization forms to District of Columbia, OTR, Exempt Organizations, PO Box 556, Washington, DC 20044.

41. Are exempt organizations required to collect the District’s  sales tax on sales of tangible personal property?
Yes, even though the exempt organization is exempt from DC Sales and Use Tax on purchases of tangible personal property or services used in the promotion of their exempt activities.

42. If a LLC from Maryland or Delaware sells and delivers sod into the District, is it reportable to the District on its income tax return?  Or since the entity is an agricultural entity, is it not subject to the reporting requirement or is there a threshold that it must fit under?
Unincorporated businesses are subject to tax for the privilege of carrying on or engaging in any trade or business with the District and of receiving income from sources within the District.  Thus, an unincorporated business which has gross income over $12,000 is required to file a form D-30: Unincorporated Business Franchise Return.  Based on the description of the business activity, the nonresident LLC is receiving income from sources within the District and has physical presence in the District (delivery of sod to the District via company truck).  Therefore, these activities are not protected by PL 86-272.  Thus, the nonresident LLC would be subject to franchise tax in the District.

43. What are the requirements for a company to qualify as a Qualified High Technology Company (QHTC)? What are some of the District’s tax credits and benefits available to a QHTC? How does a company obtain the applicable Certificate of Exemption as a QHTC?
Please refer to the District’s Publication FR-399.

44. Taxpayer sold a condo located in the District in 2006, he lives in Virginia and the condo was not rented or purchased as an investment – he used it as a “second home.” The condo was purchased in 1999. Does he have to report the capital gain on this condo as District income?  If so, which return does he use?
Since the owner of the condo is a resident of Virginia and used the property for his personal use; and did not use it as a rental property, the owner would report any gain or loss from the sale of the condo on his Virginia tax return. Federal rules apply to the treatment of gains or losses on the sale of real property.

45. I am a foreigner from another country residing in the District, do I need to file a District return?
If you are required to file federal income tax  Return, then, you should file a District return.

46. How can I determine if my parents, children, grandchildren, aunt, uncle, etc. are my dependents?
The District follows federal rules per the Internal Revenue Code (IRC) of 1986.

47. Doesn’t the District follow the same tax law(s) as Maryland and Virginia?
The District follows the District of Columbia Official Tax Code.  In some instances, the results of the application of the various tax codes are the same.

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