Taxes in DC apply to a variety of items, including income, property, and retail sales. According to figures reduced by the nonprofit Tax Foundation, DC’s local tax burden is 9.6%, which places DC in the bottom third of all states. Here is a breakdown of the types of taxes collected in DC:
DC income tax
The District of Columbia collects income taxes from residents using three tax brackets:
- 4 percent on the first $ 10,000 of taxable income
- 6 percent on taxable income between $ 10,001 and $ 40,000
- 8.5 percent on taxable income of $ 40,001 and more.
Social Security income and up to $ 3,000 in withdrawn military pay, pension income or annuity income are excluded.
For 2016, the standard deduction is $ 4,150 for a single individual, head of household, surviving spouse, married person filing jointly, or registered domestic partner filing jointly or separately. For a married person filing a separate return or a registered domestic partner, the standard deduction is $ 2,075.
Electronic filing is available and you can also find tax forms online. You can also print your state tax forms and publications in PDF format for your local tax return.
The mailing address for D-40 and D-40EZ individual income tax returns is Office of Tax and Revenue, PO Box 96169, Washington, DC 20090-6169. If you mail a refund or do not receive payment, send it to the Office of Tax and Revenue, PO Box 96145, Washington, DC 20090-6145.
DC sales tax
DC imposes a 5.75% sales tax on taxable goods and services (sales tax exemptions include groceries, prescription and non-prescription drugs, and residential utility services).
DC Property Tax
Property tax rates are set by the Council of the District of Columbia and may change from year to year. The amount of tax owed is determined by dividing the property’s assessed value by $ 100, then multiplying that amount by the rate. The current tax rate on residential real estate is $ 0.85 including multi-family units.
Inheritance and inheritance tax
DC collects an inheritance tax ranging from 6% for direct heirs to 15% for all other beneficiaries. Property inherited from a spouse or parent of a child under the age of 21 is exempt from tax.
Other DC taxes
- Liquor sold for consumption outside the premises – 9%
- Cigarettes: $ 2.00 per pack of 20 and $ 2.50 per pack of 25
- Meals in restaurants, liquors for consumption on the premises and vehicle rental: 10%
- Motor vehicle parking on commercial lots – 12%
- Hotels – 14.5% – Sales or charges for any room or rooms furnished to one person for 90 days or less anywhere rooms are regularly furnished for consideration are subject to 14.5% district sales tax.
For more information on DC taxes, visit the DC Office of Tax and Revenue website or call (202) 727-4TAX. MyTax.DC.gov is the District’s new online tax portal for viewing and paying your taxes.
The Tax and Revenue Office is located at 1101 4th St SW, Suite 270. Washington DC 20024. Hours of operation are Monday through Friday, 8:15 am to 5:30 pm
Also read, DC Government 101 – Things You Should Know About DC Laws, Officials, Agencies and More
