District of Columbia Sales Tax and Use Tax
What is the District of Columbia sales tax?
Taxes in District of Columbia are destination-based, meaning the District of Columbia sales tax rate is based, or determined from, the destination location an item is shipped to. This complicates business for retailers who need to have the exact and up-to-date sales tax rate for every shipment they make.
To see a full breakout of District of Columbia sales tax rates by state, county, city and special district, use our easy District of Columbia sales tax calculator. After putting in any ZIP code, you can enter a retail price to calculate District of Columbia sales tax totals.
What is the District of Columbia use tax?
The District of Columbia state use tax rate is the same as the state rate, but there is no use tax collected for county, city or special districts.
If you reside in DC, use tax is due to the state on any and all transactions where sales tax has not been paid, even out-of-state internet sales.
Who has to pay District of Columbia sales tax or use tax?
In general, a business must collect and remit all applicable District of Columbia sales taxes if that business has nexus, a physical presence such as a brick-and-mortar location, within a given state. The presence of an employee or salesperson, delivery by the seller's vehicle, and storage of materials usually establishes nexus as well.
District of Columbia says that an out-of-state seller is required to collect tax if they can be defined as a "retailer engaging in business". District of Columbia has certain additional laws establishing nexus for other reasons such as out-of-state businesses using in-state affiliates, advertisers or vendors, or businesses that make internet sales or mail catalogs.
If you are not sure if you have established nexus in District of Columbia, you can usually get free help by contacting the District of Columbia Office of Tax and Revenue. Click here for an updated listing of direct phone numbers. You could also contact a qualified certified public accountant or lawyer who specializes in tax law in District of Columbia. Click here for listing of recommended resources.
Special rules applying to District of Columbia sales tax and use taxes
- Shipping is not taxable if separately stated and other specific terms are met.
- Finance charges are exempt from sales tax, when stated separately.
- Clothing is taxed at the same rate as the general sales tax.
- District of Columbia Sales tax holidays are not planned for this state .
Since District of Columbia legislators can vote to change the District of Columbia sales tax and use tax rates at any time, it is very difficult for individuals to keep track of the changes. The population of DC state is also rapidly changing, which can cause frequent updates to the ZIP codes and local municipality names and complicates the job of keeping track of District of Columbia sales tax jurisdictions.