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 |
|---|---|
| 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.