Corporate Franchise Tax
Corporations must report income as follows:
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
*Note - Corporations or financial institutions, including International Banking Facilities, shall not be exempt from the minimum tax payable even if the business or source income is exempt under other provisions of the DC Code.
Tax rates. The tax rates for corporations are:
| Tax Year | Rate |
|---|---|
| 2025 | 8.25% |
| 2024 | 8.25% |
| 2023 | 8.25% |
| 2022 | 8.25% |
| 2021 | 8.25% |
| 2020 | 8.25% |
| 2019 | 8.25% |
| 2018 | 8.25% |
| 2017 | 9.0% |
| 2016 | 9.2% |
| 2015 | 9.4% |
DC Code Citation: Title 47, Chapter 18.
Unincorporated Business Franchise Tax
Unincorporated business must report income as follows:
Net income of unincorporated businesses on a combined reporting basis with gross receipts more than $12,000. A 30% salary allowance for owners and a $5,000 exemption are deductible from net income to arrive at taxable income.
A business is exempt if more than 80% of gross income is derived from personal services rendered by the members of the entity and capital is not a material income-producing factor. A trade, business or professional organization that by law, customs or ethics cannot be incorporated is exempt.
Unincorporated business 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 greater than $1 million
Tax rates. The tax rates for unincorporated businesses are:
| Tax Year | Rate |
|---|---|
| 2025 | 8.25% |
| 2024 | 8.25% |
| 2023 | 8.25% |
| 2022 | 8.25% |
| 2021 | 8.25% |
| 2020 | 8.25% |
| 2019 | 8.25% |
| 2018 | 8.25% |
| 2017 | 9.0% |
| 2016 | 9.2% |
| 2015 | 9.4% |
DC Code Citation: Title 47, Chapter 18.