The 2016 District of Columbia State Sales Tax
What is the 2016 District of Columbia Sales Tax Rate?
The District of Columbia state sales tax rate is 5.75%, and the average DC sales tax after local surtaxes is 5.75%.
- Groceries, prescription drugs and non-prescription drugs are exempt from the District of Columbia sales tax
- Counties and cities are not allowed to collect local sales taxes
- District of Columbia has no special sales tax jurisdictions with local sales taxes in addition to the state sales tax
- District of Columbia has a higher state sales tax than 78.8% of states
Washington, DC recently lowered the district sales tax by a quarter of a percent from 6% to 5.75%. The District of Columbia's sales tax is imposed on all sales of tangible property as well as on certain services. There is an additional sales tax of 9% on liquor and alcohol, 12% on parking fees, 10% on restaurant meals and rental cars, and 14% on hotel fees. There is one yearly "tax holiday" during the winter holiday season, during which no sales taxes are collected on any purchases.
If you are a District of Columbia business owner, you can learn more about how to collect and file your District of Columbia sales tax return at the 2016 District of Columbia Sales Tax Handbook .
District of Columbia Sales Tax Exemptions
District of Columbia doesn't collect sales tax on purchases of most groceries, non-prescription drugs and prescription drugs. Prepared Food is subject to special sales tax rates under District of Columbia law. In most states, necessities such as groceries, clothes, and drugs are exempted from the sales tax or charged at a lower sales tax rate.
Some items may not be eligible for these reduced sales tax rates, such as expensive clothing, unhealthy food or drinks like soda, and certain non-essential pharmaceuticals. For sales tax purposes, District of Columbia treats candy as a grocery, and does treat soda as a grocery. Other items including gasoline, alcohol, and cigarettes are subject to various District of Columbia excise taxes in addition to the sales tax.
In some states, items like alcohol and prepared food (including restaurant meals and some premade supermarket items) are charged at a higher sales tax rate. Prepared Food is subject to a higher state sales tax then other items. The DC sales tax applicable to the sale of cars, boats, and real estate sales may also vary by jurisdiction. District of Columbia's sales tax rates for commonly exempted items are as follows:
$100 Restaurant Dinner
$100 of groceries
$100 in clothes
$100 of consumer products
$10.00 sales tax
$0.00 sales tax
$5.75 sales tax
$5.75 sales tax
District of Columbia Sales Tax Exemption Certificate
Unlike a Value Added Tax (VAT), the District of Columbia sales tax only applies to end consumers of the product. Individuals and companies who are purchasing goods for resale, improvement, or as raw materials can use a District of Columbia Sales Tax Exemption Form to buy these goods tax-free.
Companies or individuals who wish to make a qualifying purchase tax-free must have a District of Columbia state sales tax exemption certificate, which can be obtained from the District of Columbia Office of Taxpayer Revenue. On making an exempt purchase, Exemption Certificate holders may submit a completed District of Columbia Sales Tax Exemption Form to the vendor instead of paying sales tax.
Sales tax exemption forms (as well as business sales tax id applications, sales tax returns, and the full District of Columbia sales tax code) can be downloaded from the District of Columbia Office of Taxpayer Revenue here .
District of Columbia Sales Tax Calculator
Whenever you make a purchase at a licensed District of Columbia retailer, your sales tax will be automatically calculated and added to your bill. To lookup the sales tax due on any purchase, use our District of Columbia sales tax calculator.
District of Columbia Use Tax
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If you buy goods and are not charged the District of Columbia Sales Tax by the retailer, such as with online and out-of-state purchases, you are supposed to pay the 5.75% sales tax (less any foreign sales tax paid) for these items yourself as the District of Columbia Use Tax.
Your are expected to voluntarily list your liable purchases on a District of Columbia Use Tax Return, which should be attached with payment to your District of Columbia Income Tax Return. Historically, compliance rates with with the District of Columbia Use Tax have been low.
District of Columbia Local Sales Taxes
District of Columbia does not allow local jurisdictions like cities or counties to collect a local sales tax. The District of Columbia state sales tax of 5.75% is applicable statewide. You can view the sales tax rates for various cities in District of Columbia here.
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