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DC Business Franchise Tax Rates

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

Tax rates. The tax rates for corporations are:

Tax Year Rate
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
2019 8.25%
2018 8.25%
2017 9.0%
2016 9.2%
2015 9.4%

DC Code Citation: Title 47, Chapter 18.

Qualified High Technology Companies

Please consult OTR publication FR-399 for information regarding the special tax rates for corporations and unincorporated businesses that are eligible Qualified High Technology Companies (“QHTCs”). https://otr.cfo.dc.gov/page/qualified-high-tech-companies-tax-forms

DC Code Citation: Title 47, Chapter 18.