On June 29, the Mayor signed the FY 2012 Emergency Budget Support Act, which included the sales tax increase on off-premise alcoholic beverages. Today, the Office of Tax and Revenue has begun to mail notices on implementation of this increase to applicable vendors in the District of Columbia.

Rate Increase

Effective July 1, 2011, vendors shall collect a sales tax of 10 percent on the sale of alcoholic beverages for off-premise consumption, an increase of one percent.

Off -premise alcoholic beverage is defined as spirits, wine and beer sold at a licensed establishment, other than a restaurant, tavern, nightclub, hotel, club, or multipurpose facility.

The Office of Tax and Revenue recognizes that this is short notice for this tax rate change.  Vendors are expected to make this change effective as soon as possible.  To avoid liability for a brief period of inability to change to the new 10 percent tax rate, vendors must be able to demonstrate a good faith effort was made to implement the new tax rate promptly.

Procedures for Remitting the Additional Alcoholic Beverage Sales Tax

Revised booklets will not be mailed before new booklets are issued for the fiscal year beginning October 1, 2011.
The new tax rate will be reflected on revised FR-800M, FR-800Q, and FR-800SE forms that will be available before the end of July on OTR’s website at www.taxpayerservicecenter.com.

Taxpayers may also use the forms in their existing sales tax booklet.  The 10 percent tax on sales of off premise alcoholic beverages can be reported on Line 4, “Sales and Purchases Taxable at 9 percent” but must be calculated at the 10 percent rate.  Do not use Line 5. Line 5 is not for off-premise alcoholic beverages. If the correct rate is not used for amounts reported on Line 4, taxpayers will be billed for the difference.

For additional information, please contact OTR’s Customer Service Center at (202) 727-4TAX (4829).