Washington D.C. Sales Tax Guide for Businesses
- Sales Tax Rate
- Local Taxes
- Office of Tax and Revenue
We wrote this guide for online sellers who want to know if they even have to bother with sales tax in Washington D.C., and if so, how best to tackle the sales tax situation in the United States’ Capitol.
After reading this, you’ll know:
- Do you or don’t you need to collect Washington D.C. sales tax?
- Which customers do you collect from?
- How much do you collect?
- What do you do with all the sales tax you’ve collected?
- Way more than you probably ever wanted to know about Washington D.C. sales tax!
Do you have sales tax nexus in Washington D.C.?
Good news! You only have to begin thinking about Washington D.C. sales tax if you have sales tax nexus in Washington D.C.
“Sales tax nexus” is just a fancy way of saying “significant presence” in a state.
Washington D.C. considers a seller to have sales tax nexus in the state if you have any of the following in the state:
- 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
You can click here to read exactly what the Washington D.C. Department of Revenue (Washington D.C.’s taxing authority) has to say about what constitutes sales tax nexus in Washington D.C.
Is what you’re selling even taxable?
You’ve probably read this far because you realized you have sales tax nexus in Washington D.C. Your next step is to determine if what you’re selling is even taxable.
Services in Washington D.C. are generally not taxable. So if you’re a freelance writer or a plumber, you’re in luck and you don’t have to worry about sales tax. But watch out – if the service you provide includes creating or manufacturing a product, you may have to deal with the sales tax on products.
Tangible products are taxable in Washington D.C. , with a few exceptions. These exceptions include certain groceries, and certain equipment sold to businesses. If you’re wondering if you need to charge sales tax on items you sell in Washington D.C. you can contact the District of Columbia Office of Tax and Revenue.
So if you sell shoes, then charge sales tax to your Washington D.C. customers.
But if you’re a graphic designer, don’t charge sales tax to your Washington D.C. customers.
If you have sales tax nexus in Washington D.C. and your products are taxable, your next step is to register for a sales tax permit.
How to Register for a Sales Tax Permit in Washington D.C.
Sellers with sales tax nexus in Washington D.C. must apply for a Washington D.C. sales tax permit.
Don’t skip this step! Many states consider it unlawful to collect sales tax in their name without a permit. Go here for more on how to register for a sales tax permit in Washington D.C.
How to Collect Sales Tax in Washington D.C.
So you’ve determined that you have sales tax nexus in Washington D.C. and what you’re selling is taxable. And you’re all set and registered for your Washington D.C. sales tax permit.
The next step is to determine how much sales tax to collect.
Luckily, collecting sales tax in Washington D.C. is fairly simple. There’s only one sales tax rate - 5.75%.
So if you have sales tax nexus in Washington D.C. and sell to a buyer in Washington you would charge them the 5.75% sales tax rate.
When are Washington D.C. Sales Tax Returns Due?
Washington D.C. sales tax returns are always due the 20th of the month following the reporting period. You’ll be assigned a sales tax filing frequency when you apply for your Washington D.C. sales tax permit.
To break it down:
2016 District of Columbia Monthly Sales Tax Filing Due Dates
If your sales tax due is $1201 or greater during the filing period then you’ll probably be required to file a monthly return in Washington D.C.
|Taxable Period||Due Date|
|January||February 22, 2016*|
|February||March 21, 2016*|
|March||April 20, 2016|
|April||May 20, 2016|
|May||June 20, 2016|
|June||July 20, 2016|
|July||August 22, 2016*|
|August||September 20, 2016|
|September||October 20, 2016|
|October||November 21, 2016*|
|November||December 20, 2016|
|December||January 20, 2017|
*indicates a due date pushed back due to a weekend or holiday
2016 District of Columbia Quarterly Sales Tax Filing Due Dates
If your sales tax due for the taxable period is between $201 and $1200 you’ll probably be required to file quarterly sales tax returns in Washington D.C.
|Taxable Period||Due Date|
|Q1 (Jan - Mar)||April 20, 2016|
|Q2 (Apr - Jun)||July 20, 2016|
|Q3 (Jul - Sep)||October 20, 2016|
|Q4 (Oct - Dec)||January 20, 2017|
2016 District of Columbia Annual Sales Tax Filing Due Date
If your sales tax liability in the taxable period is $200 or less you’ll probably be required to file an annual sales tax return in Washington D.C.
|Taxable Period||Due Date|
|Year 2016||January 20, 2017|
How to File Sales Tax in Washington D.C.
When it comes time to file sales tax in Washington D.C. you must do three things:
- Calculate how much sales tax you owe
- File a sales tax return
- Make a payment
We’ll walk you through these steps.
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.
All you do is 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. All you have to do is login!
How to File and Pay Sales Tax in Washington D.C.
You have three options for filing and paying your Washington D.C. sales tax:
- File online – File online with D.C. Freefile. 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](http://otr.cfo.dc.gov/sites/default/files/dc/sites/otr/publication/attachments/2015FR-800Q_0002081514.pdf} to file and pay quarterly, and FR-800M to file and pay monthly. You can find all your Washington D.C. sales tax forms here.
Keep in mind that if your sales tax liability is $5,000 or greater, you are required to file and pay electronically.
Other Facts You Should Know about Washington D.C. Sales Tax Filing
There are a few more things you should know about sales tax in Washington D.C.:
- Late Filing Penalty – 5% of tax due per month or fraction (maximum 25%)
- Late Payment Penalty – 5% of tax due per month or fraction (maximum 25%)
Other penalties for fraud or serial offenses include higher penalties and even criminal charges.
Many states require that any seller with a sales tax permit file a sales tax return on your due date even if you don’t have any sales tax to report or pay. Washington D.C. doesn’t explicitly state that online sellers should file a sales tax return if they haven’t collect any sales tax. Click here for a list of states that require zero sales tax returns.
Many states understand that collecting sales tax is a difficult burden on merchants, and will provide a discount to help alleviate some of this burden. Washington D.C. doesn’t provide a sales tax discount, but you can click here for more about state sales tax discounts from other states.
And that’s it. You’ve mastered Washington D.C. sales tax filing! Now that sales tax is out of the way, you can get back to what you do best – running your business.
Washington D.C. Sales Tax Resources
For more about Washington D.C. sales tax, check out the Washington D.C. section of the TaxJar blog.