Washington DC District of Colombia Sales Tax Information

Any business that sells goods or taxable services within Washington DC to customers located in Washington DC is required to collect sales tax from that buyer. This will include all online businesses. Any seller which conducts business and has a major presence within the state must collect sales tax in Washington DC must pay taxes to the state. Therefore, these sellers required to file for a Sales tax certificate. By not doing so the business may face sanctions or other types of penalties. Additionally, depending on the businesses location and tax jurisdiction, localities such as counties, cities, and other districts can also add additional sales and use taxes.

Do you need to get a Sales Tax certificate in Washington DC?

You may need a Sales Tax Certificate if any of the following apply your business:

  • You have a physical office or place you conduct
  • You sell or ship products to a buyer in Washington DC
  • You have a distribution location such as a storage area or warehouse space
  • You have employees physically present in Washington DC (including independent contractors, sales persons, representatives, or agents)
  • Your business has taxable services in the state of Washington DC

What constitutes taxable services in the state of Washington DC?

The majority of service businesses are not taxable in Washington DC. The exceptions would be service business that manufactures or fabricates a product.

Why do you need a Sales Tax Certificate to purchase wholesale items for Resale in the State of Washington DC?

As a wholesale company conducting business in the state of Washington DC, you are required to have a sales tax certificate when purchasing items at wholesale prices, Therefore, suppliers must request a copy of your resale certificate before selling you items at wholesale prices.

Do you need to collect sales tax on shipping and handling of merchandise?

If you sell tangible goods in Washington DC that are taxable than you would charge sales tax on shipping and handling charges.

Is there sales tax on drop shipments in the state of Washington DC?

A drop shipment is where a seller (most times out of state) sells a product which is then delivered to a consumer by a third-party shipper. In most instances, drop shipments in Washington DC are required to have sales tax added

Are there any exemptions to taxable items sold?

Grocery foods, raw materials used in manufacturing, medical devices, prescription medicines, general pollution control equipment, and certain equipment sold to businesses are tax exempt

Register for a Washington DC sales/use tax number

Sales Tax Rates

  • 5.75% – General rate for tangible personal property and selected services
  • 10% – Liquor sold for off-the-premises consumption
  • 10% – Restaurant meals, liquor for consumption on the premises, and rental vehicles
  • 18% – Parking motor vehicles in commercial lots
  • 14.8% – Hotels (transient accommodations)
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