Sales and Use Tax FAQs

Who must file a Sales tax return?
Every individual or business is required to file a sales tax return if they had a taxable sale or provided a taxable service. The individual or business must also have:

• Nexus (A taxable sale or service was physically provided in the District of Columbia) or;
• Economic Nexus (A remote seller with more than $100,000 of gross receipts from retail sales delivered into the District or more than two hundred separate retail sales delivered in the District).

What is the due date of the Sales tax return?
Returns and payments are due by the 20th day of the month following the end of the monthly, quarterly, or annual period. For annual filers, this is October 20th.

What are the sales tax rate(s)?
The District of Columbia sales tax rate can vary depending on the service or item subject to sales tax. For additional information, please see pages 6 and 7 of the Sales Tax Instruction Booklet.

Service or Item

• General Sale or Medical Marijuana - Tax Rate: 6%
• Sale of or charges collected to play commercial bingo - Tax rate: 7.5%
• Soft Drink - Tax Rate: 8%
• Food, Drink prepared for immediate consumption or spirituous or malt liquors, beer, and wine sold for consumption on the premises where sold - Tax Rate:10%
• Rental Vehicles - Tax Rate:10.25%
• Spirituous or malt liquors, beers, and wine sold for consumption off the premises where sold, unless sold by an alcoholic beverage licensee - Tax Rate: 10.25%
• Rooms, lodgings, or accommodations - Tax Rate:15.95%
• Parking or storing of motor vehicles or trailers - Tax Rate:18%

How do I file a sales tax return?
For tax years 2017 and forward, the returns must be filed electronically as a logged-in function via MyTax.DC.gov. Please see the step-by-step instructions in the link below. How to File a Sales and Use Return.

Can I file a paper sales tax return?
Taxpayers can file a paper return for tax year 2016 and prior. However, OTR encourages all returns to be filed electronically.

Reminder: Paper returns are not accepted for tax years 2017 and forward.

If I file a sales tax return late, am I subject to penalties and interest?
Yes, if a return is filed late with a tax amount due, you will be subject to a late filing penalty of 5% minimum to 25% maximum. Interest will accrue at 10% per year, compounded daily.

Where can I get more information on taxable and non-taxable services?
Please visit OTR's Taxable and Non-Taxable Services page.

Where can I get Information on current sales tax rates?
Please visit OTR's Taxable and Non-Taxable Services page.

Where can I get information on sales tax exemptions and how to apply for an exemption certificate?
Please visit OTR's Exemptions page.

Where can I get Additional Information?
All questions related to Sales and Use Tax should be directed to the Office of Tax and Revenue, Audit division, at (202) 442-6631.

Where can I get Tax Collection Charts?
If you need tax collection charts, call (202) 727-4TAX (4829) to have charts mailed to you or visit the Office of Tax and Revenue, Customer Service Walk-In Center located at 1101 4th Street, SW, Suite W270, Washington, DC 20024.

Who must register for a special event?
The special event registration and application (Form FR-500B) must be completed by any individual, organization, business, or consumer who is planning to promote a special event. The promoter must register in advance of the event with the Government of the District of Columbia, Office of Tax and Revenue, 1101 4th Street, SW, Suite W270, Washington, DC 20024.

Who must collect and file?
An individual, organization, business, or consumer engaging in business in the District of Columbia must collect District of Columbia sales tax from the purchaser on: sales of tangible personal property delivered to a customer in the District, certain foods and drinks sold at retail, rental or leasing of tangible personal property, and admissions to certain public events that take place in the District.

When is the special event tax return due?
A special event sales tax return (Form FR-800SE) must be filed by the 20th day of the month following the month being reported.

Are there special requirements for promoters?

• The term “promoter” includes any for-profit or nonprofit individual or entity. Before a special event takes place, the promoters of the event must inform vendors and exhibitors who participate in the event of their responsibilities to collect DC sales tax and pay it to the Office of Tax and Revenue (OTR).
• A special event promoter must provide OTR’s Collection Division, located at 1101 4th Street, SW, Suite W270, Washington, DC 20024, with a preliminary list of all vendors and exhibitors along with their addresses, federal employer identification numbers or Social Security numbers, representatives’ names, and telephone numbers. This list is due at least 30 calendar days before the special event occurs. A final list is due within 10 calendar days after the last day of the special event, unless previously submitted.
• Before the special event, a promoter must provide vendors and exhibitors with information regarding their District tax obligations, filing deadlines, and any other requirements supplied by the District after the preliminary list of vendors and exhibitors is submitted.
• The penalty for failing to provide the preliminary list is $1,000 plus $50 for each day the list is late. The penalty is capped at $2,500. The penalty for failing to provide the final list is $1,000 plus $50 for each day the list is late. The penalty is capped at $10,000.

What is a Use Tax?
The use tax is a tax imposed at the same rate as the sales tax. It is imposed on the purchase or rental of tangible personal property that will be used, stored or consumed in the District by a buyer who did not pay sales tax to the District or any other taxing jurisdiction at the time of the purchase or rental.

What is the street and mobile food services vendor quarterly minimum sales tax?
The Vendor Sales Tax Collection and Remittance Act of 2012 requires street and mobile food services vendors to collect the 10 percent sales tax on the sale of food and 6 percent sales tax on other sales beginning October 1, 2012. Affected taxpayers are required to remit, each quarter, the amount of sales tax collected, or $375, whichever is higher. A return must be filed to pay the minimum sales tax of $375, even if no sales were made.

When is my quarterly minimum sales tax return due?
Quarterly minimum sales tax returns are due on or before January 20, April 20, July 20 and October 20 of each year.

If I have two (2) licenses (Class A and Class C) and operate at one location, what do I pay the Office of Tax and Revenue?
You pay the Office of Tax and Revenue 10 percent on the sales of food and 6 percent sale on all other sales, or $375.00 per quarter, whichever is higher. You must pay at least $375.00 per quarter, whether or not you had any sales.

If I operate at more than one location, must I secure different licenses for each location, and what is my quarterly liability?
You must have a license for each location, and your quarterly payment to the Office of Tax and Revenue is $375.00 per license.

Under what circumstances do I file a D-30 Unincorporated Franchise Tax Return?
If your annual gross income from your vendor business is more than $12,000, you must file and pay franchise taxes.

When must I file the D-30 Unincorporated Franchise Tax Return?
The due date for filing the D-30 unincorporated franchise tax return is April 15 for calendar year filers.

How can I pay my quarterly minimum sales tax?
You can pay your quarterly minimum sales tax by check or money order if filing by paper. If filing electronically using the DC website, you have the option of Echeck or Credit Card. If paying by credit card, there is a fee that is paid by the taxpayer to the District’s third-party provider.

What is a Business Beneficial License Holder?
A Business Beneficial License Holder is an individual street vendor who holds a vending license as an employee, agent, or representative, or for the ultimate benefit, of a corporation, limited liability company, partnership, or other business entity.

What form is used to remit the minimum sales tax?
The FR-800V, Street and Mobile Food Services Vendors Minimum Sales Tax Quarterly Booklet. The booklet will be mailed to all registered vendors. The return and payment must be sent to the Office of Tax and Revenue, P.O. Box 96384, Washington, DC 20090-6384. Beginning with the remittance due January 20, 2013, DO NOT MAKE PAYMENT AT THE CASHIER’s OFFICE OR ANY BANKING FACILITY. The return must accompany the payment. You will also have the option of filing and paying using the DC website, MyTax.DC.gov.

What is the Street Vendor Amnesty Program?
For information about the Street Vendor Amnesty Program administered by the Department of Licensing and Consumer Protection (DLCP), please go to the DLCP website at https://dlcp.dc.gov/service/vending-services.

What information do I need from OTR before applying to the Street Vendor Amnesty Program?
For information about specific documentation needed from OTR before applying to the Street Vendor Amnesty Program, please review the Street Vendor Amnesty Program Frequently Asked Questions.

Who needs to file a Street Vendor (FR-800V) return?
Anyone licensed to vend on a public space under Chapter 1A of Title 37.

What is the minimum tax due on a Street Vendor tax return?
The minimum tax due is $375.00 per period, even if the tax amount due is less.

How do I file a Street Vendor tax return?
Follow the instructions in the following hyperlink: How to File a Street Vendors and Mobile Food Services Tax Return.

Can I file a paper Street Vendor tax return?
No; Street Vendor returns (form FR-800V) are required to be filed electronically through www.MyTax.DC.gov.

What if my Street Vendor license is on hold?
Please contact the Department of Licensing and Consumer Protection (DLCP) via email at [email protected] to obtain a license on hold status letter.

Can I request an extension to file a Street Vendor return?
No; there is no extension on the time to file or pay a Street Vendor tax return.

Is there an amnesty program for Street Vendors?
Yes, there is an amnesty program available for eligible taxpayers. To qualify for the amnesty program, a taxpayer must apply for a new or renew a vending license. For more information, please contact the Collection and Enforcement Administration (CEA) by telephone at (202) 724-5045.

Will I be penalized for a late filing?
Yes, if a return was filed with a balance due, a late file or payment penalty of 5% penalty for each month late, up to a maximum penalty of 25%, will be charged. Interest will accrue on the balance due at 10% per year compounded daily.

Who is a remote seller?
A remote seller is an out-of-state retailer (i.e., a person engaged in the business of making sales at retail) that has no physical presence in the District of Columbia.

What responsibilities does a remote seller have under the new sales tax law?
Beginning on January 1, 2019, remote sellers must collect and remit District sales tax if they had, in the previous calendar year, or will have, in the current calendar year, more than $100,000 of gross receipts from retail sales delivered into the District or more than 200 separate retail sales delivered in the District.

What is the economic nexus standard in the District that will require a remote seller to obtain a retail license and begin collecting and remitting the District sales tax?
In the District, a remote seller whose gross revenue from sales is delivered into the District exceeds $100,000 or who has more than 200 separate retail sales delivered in the District in the previous calendar year or the current calendar year has economic nexus with the District and is responsible for obtaining a retail license, as well as remitting District sales and use tax.

When does a remote seller’s obligation to collect the sales tax begin?
If a remote seller had more than $100,000 of gross receipts from retail sales delivered into the District or more than 200 separate retail sales delivered in the District in 2018, that remote seller’s obligation to collect District sales tax began on January 1, 2019.

If a remote seller did not have more than $100,000 of gross receipts from retail sales delivered into the District or more than 200 separate retail sales delivered in the District in 2018, that remote seller must begin collecting District sales tax in 2019 as soon as its sales into the District exceed the $100,000 gross receipts threshold or 200 transaction threshold. No tax will be owed on those transactions occurring in 2019 before the applicable threshold is crossed. That remote seller must also continue to collect District sales tax for 2020 because it crossed one or both thresholds the previous year in 2019.

For example, assuming a remote seller had not yet received more than $100,000 of District gross receipts, a remote seller must begin collecting sales tax on its 201st sale. The remote seller’s obligation will also extend to the following calendar year, even if sales in that year are below the applicable thresholds.

Do sales to purchasers in the District with valid District sales tax exemption certificates count towards the economic nexus thresholds?
Yes, sales to District purchasers with valid District sales tax exemption certificates count when determining whether the more than $100,000 gross receipts threshold or the more than 200 separate retail sales threshold has been met.

If a remote seller makes sales on its own website and on a marketplace, do both sales streams count towards determining if the economic threshold has been met?
Yes, if a remote seller makes sales on its own website and on a marketplace, both sales streams count when determining if the economic threshold has been met.

For example, if a remote seller makes 100 sales to the District on its website, and 150 sales to the District through a marketplace, the total sales exceed 200, and the remote seller must collect tax on the sales made on its website.

Are foreign remote sellers required to collect District sales tax?
Yes, a foreign remote seller is required to register and collect and remit District sales tax if the remote seller meets the thresholds for economic nexus in the District.

May a remote seller who does not have more than $100,000 of gross receipts or more than 200 transactions in the District voluntarily obtain a retail license and begin collecting the District Sales and Use Tax?
Yes. Any remote seller whose activity in the District does not exceed the relevant thresholds may voluntarily obtain a retail license and remit sales and use tax at any time.

Are out-of-state sellers who deliver goods or taxable services in the District through employees or independent contractors considered “remote sellers?”
No, sellers who deliver goods or taxable services in the District through employees or independent contractors have a physical presence in the District regardless of whether they have a location in the District and must collect and remit District sales tax on its gross receipt for all sales in the District. Because these sellers have a physical presence in the District, they are not remote sellers and the applicable sales thresholds for remote sellers do not apply.

Is a “marketplace facilitator” required to collect District of Columbia sales tax on behalf of “marketplace sellers?”
Beginning on April 1, 2019, a “marketplace facilitator” is required to collect District sales tax on behalf of its “marketplace sellers.”

A “marketplace facilitator” is a person that provides a marketplace that lists, advertises, stores, or processes orders for retail sales subject to tax under this chapter for sale by such marketplace sellers, and directly or indirectly collects payment from a purchaser and remits payment to a marketplace seller regardless of whether the marketplace facilitator receives compensation or other consideration in exchange for its services.

A “marketplace seller” is a person that makes retail sales through a marketplace operated by a marketplace facilitator.”

Any agreement between a marketplace facilitator and a marketplace seller regarding the collection and remittance of District sales tax does not relieve either the marketplace facilitator or the marketplace seller from liability for any District sales tax due.

How should remote sellers register with OTR to collect and remit District sales tax?
Remote sellers should register as a new business online using Form FR-500 and indicate that they are a remote seller when prompted.

How should a marketplace facilitator register with OTR to collect and remit District sales tax?
Marketplace facilitators should register for a marketplace sales tax account with the District of Columbia and begin collecting and remitting tax immediately on their marketplace sales. Those marketplaces that are already registered with the District as a vendor or a remote seller should add an additional marketplace account to their customer profile.

How should sellers register with OTR if they operate as both a remote seller and as a marketplace facilitator?
Sellers operating as both a remote seller and as a marketplace facilitator should register for two sales and use tax accounts and report their remote sales and their marketplace sales separately.

How should sellers register with OTR if they operate as both a retailer with a location in the District and as a marketplace facilitator?
Sellers operating as both a traditional vendor and as a marketplace facilitator should register for two sales and use tax accounts and report their traditional brick and mortar sales and their marketplace sales separately.

Where can I get assistance in registering with OTR to collect District sales tax?
Taxpayers can contact OTR’s e-Services Unit Monday through Friday from 8:15 a.m. to 5:30 p.m. by utilizing the web message feature available in MyTax.DC.gov. They may also call (202) 759-1946 or send an email to [email protected].