The digital goods listed below are subject to Sales tax effective January 1, 2019:
- Applications – Taxable digital goods under D.C. Code §47-2001(d-1).
- Software (Canned, Prepackaged, or Customized) – Taxable as data processing services under D.C. Mun. Regs. §9-474.4.
- Digital News and Periodicals – Taxable as “the furnishing of general or specialized news or current information” and “news clipping service” under D.C. Code §47-2001(n)(1)(N)(ii).
- Digital Books – Taxable digital goods under D.C. Code §47-2001(d-1).
- Digital Audiobooks – Taxable digital goods under D.C. Code §47-2001(d-1).
- Digital Music (Downloads and Streaming) – Taxable digital goods under D.C. Code §47-2001(d-1).
- Digital Video Downloads – Taxable digital goods under D.C. Code §47-2001(d-1).
- Streaming Video Services – Taxable digital goods under D.C. Code §47-2001(d-1).
Please note that the new legislation did not affect the taxation of software in the District. Under D.C. Mun. Regs. 9 §474.4, the sale, rental, or maintenance of computer software continues to be subject to sales tax in the District whether the software is canned, prepackaged, or customized. Taxable computer software and software services include system software, application software, computer programming, software modification, or software updating. The new legislation does not affect D.C. Mun. Regs. 9 §474.4.
This Notice supersedes prior OTR Notice 2017-06.
Questions should be directed to the Office of the General Counsel at (202) 442-6500.
Click here to read South Dakota v. Wayfair, Inc.