Navigating Washington, D.C.’s sales tax guidelines
The District of Columbia offers guidelines for businesses and remote sellers to help them understand sales tax obligations when sales are made within Washington, D.C. Businesses and online sellers must understand these laws and guidelines, ensuring they remain tax compliant. Use TaxJar’s sales tax guide to learn more about sales tax directives in Washington, D.C., and estimate your potential tax liabilities with the sales tax calculator.
Do you need to collect sales tax in Washington, D.C.?
You’ll need to collect sales tax in Washington, D.C. if your business has either physical or economic nexus. Businesses with tangible presence or activity in the District of Columbia have physical nexus, while businesses (or remote sellers) who meet Washington, D.C.’s economic threshold for total revenue or total number of transactions have an economic nexus.
Do you have physical nexus in Washington, D.C.?
Washington, D.C. considers a seller to have physical nexus under these conditions: :
- having an office, place of distribution, sales or sample room or place, warehouse or storage place, or other place of business
- having a representative, agent, salesman, canvasser, or solicitor for the purpose of making sales at retail, or the taking of orders for such sales.
The Washington, D.C. Office of Tax and Revenue offers additional insights about what constitutes sales tax nexus in Washington, D.C.
Do you have economic nexus in Washington, D.C.?
Effective January 1, 2019, remote sellers in Washington, D.C. who exceed the $100K gross sales or the 200 transactions number are required to register, collect sales tax on sales that ship to Washington, D.C., and remit the sales tax to the state.
Is what you’re selling taxable?
Services in Washington, D.C. are generally not taxable, with some exceptions. However, if the service you provide includes creating or manufacturing a product, you may have to assess the sales tax on products.
Tangible products are taxable in Washington, D.C. , with a few exceptions, including certain groceries and certain equipment sold to businesses. If you’re unsure if you need to charge sales tax on items you sell in Washington, D.C., contact the District of Columbia Office of Tax and Revenue.
Is SaaS taxable in Washington, D.C.?
SaaS is considered taxable in the District of Columbia.
How to get a sales tax permit in Washington, D.C.
You can register for a sales tax permit online at My Tax DC. You need the following information to register for a sales tax permit in Washington, D.C.:
- Your Federal Employer Identification Number and/or Social Security Number and the info for anyone authorized on your account
- Your legal form of business (e.g. partnership, corporation, sole proprietor)
- Your business address
- The names, titles, home address, and Social Security number of the proprietor, partners, or principal officers (mandatory)
- The former Entity Information if previously registered with the District
- The addresses for all locations where you will collect sales tax in the District of Columbia
It’s free to apply for a sales tax permit, but other business registration fees may apply.
Collecting sales tax in Washington, D.C.
Collecting sales tax in Washington, D.C. is fairly simple. There’s only one sales tax rate – 6%. If you have sales tax nexus in Washington, D.C. and sell to a buyer in D.C., then you would charge them the 6% sales tax rate.
Should you collect sales tax on shipping charges in Washington, D.C.?
If you have nexus in Washington, D.C. and are shipping goods to Washington D.C. then shipping is taxable.
When are Washington, D.C. sales tax returns due?
When you file and pay Washington, D.C. sales tax depends on your assigned filing frequency and your state’s due dates.
How often will you file sales tax returns in Washington, D.C.?
States assign you a filing frequency when you register for your sales tax permit. In most states, how often you file sales tax is based on the amount of sales tax you collect from buyers in the state.
In Washington D.C., you will be required to file and remit sales tax either monthly, quarterly or annually.
Washington D.C. sales tax returns are always due the 20th of the month following the reporting period. If the filing due date falls on a weekend or holiday, sales tax is generally due the next business day.
Filing sales tax in Washington, D.C.
When it’s time to file sales tax in Washington, D.C., follow these simple steps:
- Calculate how much sales tax you owe
- File a sales tax return
- Make a payment
How to calculate how much sales tax you owe in Washington, D.C.
Calculating how much sales tax you should remit to the state of Washington, D.C. is easy with TaxJar’s Washington, D.C. sales tax report.
Connect the channels through which you sell – including Amazon, eBay, Shopify, Square and more – and we’ll calculate exactly how much sales tax you collected. All the information you need to file your Washington, D.C. sales tax return will be waiting for you in TaxJar.
How to file and pay sales tax in Washington, D.C.
You have a few options for filing and paying your Washington, D.C. sales tax:
- File online with MyTax DC. You can remit your payment through their online system.
- File by mail – You can use paper form FR-800A to file and pay annually, FR-800Q to file and pay quarterly, and FR-800M to file and pay monthly.
- AutoFile – Let TaxJar file your sales tax for you. We take care of the payments, too. You’ll never have to worry about spreadsheets, calculations, or filling out complex sales tax returns.
Keep in mind that if your sales tax liability is $5,000 or greater, you are required to file and pay electronically.
