Government of the District of Columbia
Office of the Chief Financial Officer
Office of Revenue Analysis
D.C. Tax Facts
2016
Muriel Bowser
Mayor
Phil Mendelson, Chairman
Council of the District of Columbia
Jeffrey DeWitt
Chief Financial Officer
i
TABLE OF CONTENTS
SUBJECT PAGE
MESSAGE FROM THE CFO ......................................................................................................... iii
CORRECTION ................................................................................................................................ v
INTRODUCTION ........................................................................................................................... vi
PART I
-- D.C. GENERAL FUND REVENUE
FY 2015 ......................................................................................................................................... 1
FY 2016 AND FY 2017 ESTIMATES ........................................................................................... 2
PART II
-- DISTRICT TAXES AND NON-TAX REVENUE SOURCES
ALCOHOLIC BEVERAGE TAX ................................................................................................. 4
CIGARETTE TAX ....................................................................................................................... 5
ESTATE TAX ............................................................................................................................. 7
INCOME TAXES
CORPORATION AND UB FRANCHISE TAXES .................................................................. 8
INDIVIDUAL INCOME TAX ................................................................................................. 10
INSURANCE PREMIUMS TAX ................................................................................................. 12
MOTOR VEHICLE TAXES
MOTOR VEHICLE EXCISE TAX .......................................................................................... 13
MOTOR VEHICLE FUEL TAX .............................................................................................. 14
MOTOR VEHICLE REGISTRATION FEES ......................................................................... 15
PROPERTY TAXES
PERSONAL PROPERTY TAX ............................................................................................. 17
REAL PROPERTY TAX........................................................................................................ 19
PUBLIC SPACE RENTAL ......................................................................................................... 22
PUBLIC UTILITY TAX ............................................................................................................... 23
RECORDATION AND TRANSFER TAXES ............................................................................. 25
SALES AND USE TAX .............................................................................................................. 28
TOLL TELECOMMUNICATIONS TAX ..................................................................................... 31
BASEBALL GROSS RECEIPTS TAX ...................................................................................... 33
HEALTHCARE PROVIDER TAX .............................................................................................. 34
ICF-IDD ASSESSMENT ........................................................................................................... 34
MEDICAID HOSPITAL INPATIENT RATE SUPPLEMENT ..................................................... 34
MEDICAID HOSPITAL OUTPATIENT SUPPLEMENT PAYMENT ......................................... 35
NON-TAX REVENUE AND LOTTERY ..................................................................................... 36
SPECIAL PURPOSE NON-TAX REVENUE ............................................................................ 37
PART III
--SELECTED D.C. TAX STATISTICS ........................................................................................ 38
PART IV
-- HISTORY OF MAJOR CHANGES IN D.C.
TAX STRUCTURE, FY 1970 TO FY 2016 ................................................................................. 42
PART V
-- FILING AND PAYMENT DATES FY 2016 ............................................................................. 69
OFFICE LOCATIONS AND TELEPHONE NUMBERS ............................................................... 74
ii
STATISTICAL TABLES
SUBJECT PAGE
TABLE 1
D.C. GENERAL FUND REVENUE
FY 2015 REVENUE ...................................................................................................................... 1
TABLE 2
D.C. GENERAL FUND REVENUE
FY 2016 AND FY 2017 REVENUE ESTIMATES ......................................................................... 2
TABLE 3
D.C. TAX REVENUE, 1993-2015 ................................................................................................ 39
TABLE 4
2013 D.C. INCOME TAX DISTRIBUTION ................................................................................... 40
TABLE 5
D.C. REAL PROPERTY ASSESSMENTS-TAXABLE, EXEMPT AND TOTALS
TAX YEAR 2015 .......................................................................................................................... 41
iii
MESSAGE FROM THE CFO
The District of Columbia is a single unit of government that provides many of the services
typically provided by and shared between state and local levels of government in the fifty states.
Typical local-level revenue sources used by the District include the real property tax, personal
property tax, deed transfer and recordation taxes, traffic fines, and a variety of other taxes and
fees. D.C. also uses many state-level revenue sources, including the individual income tax, the
general sales and use tax, motor vehicle license fees, business net income taxes and various
excise taxes. The District levies various taxes and a great number of fees in support of General
Fund revenue each year. With over $7 billion in revenue flowing into the General Fund, our
taxpayers are important investors in the nation’s capital city.
The District’s principal local revenue producers are the individual income tax, real property
taxes, sales tax, and gross receipts taxes. The real property tax, which is generally administered
by local jurisdictions, is the largest source of tax receipts for the District government, accounting
for 27.7 percent of total local-source General Fund revenues in fiscal year 2015. Several
property tax relief options are available to eligible property owners. The most widely used is the
Homestead Deduction Program. For owner-occupied residences of five units or less, the
homestead program provides a $71,700 deduction from the assessed value. Other property tax
relief measures include a 10 percent cap on the annual growth of real property tax liability for
homeowners and the Senior Citizen and Disabled Homeowner Tax Relief Program, which
allows certain senior citizens and persons with disabilities to claim a 50 percent reduction in
property taxes.
The individual income tax, which generally is administered by state governments, is the second
largest source of tax revenue for the District, providing 23.6 percent of the total local-source
General Fund revenues for fiscal year 2015. Because the individual income tax is progressive,
the rate of increase for income tax revenues is greater than the rate of increase in income
subject to the tax. Personal income tax credits include: out-of-state tax credit, credit for child
and dependent care expenses, D.C. low income credit, property tax credit, and D.C. earned
income tax credit.
The District’s third largest revenue producer, the sales and use tax, is based on taxable sales in
the District, which include most retail items, construction materials, and utilities used by
business entities. Groceries, prescription and non-prescription drugs, and professional services
such as consulting, engineering, legal, and physician services, are exempt from the sales and
use tax. The sales and use tax is generally administered by state and local governments. This
tax provided 16.6 percent of the District’s fiscal year 2015 local revenue.
iv
Although the District has features of a complete state/local revenue structure, it does not have
the mix of economic activity of a typical state or city revenue base. Manufacturing, which
enhances the tax bases of most major cities and states, is largely lacking in the District.
The federal presence in the District further compounds the disparity between the revenue-
raising capacity of the District and that of many state and local governments. Some of the
revenue implications due to the extraordinary federal presence include: (1) a narrower property
tax base because of the substantial amount of federally owned tax-exempt property in the city;
(2) a reduced income and sales tax base because of the tax-exempt status of the federal
government, which is the city’s largest employer, and (3) a significant amount of tax-exempt
property due to the presence of foreign embassies. Federal actions that limit the District’s tax
revenues include: (1) prohibition of taxing non-resident income earned in the District; and (2)
congressional limitations on the height of buildings in the District, which restrain economic
development.
Details concerning the various taxes used by the District are presented in this publication for the
purpose of taxpayer education and to enhance citizens’ awareness of their tax responsibilities.
The Office of Revenue Analysis welcomes comments on this document and how it could be
made more useful to the public.
Jeffrey S. DeWitt
Chief Financial Officer
Government of the District of Columbia
v
CORRECTIONS
The tax rates edited include the following:
Corporate franchise rate (page 8):
9.2% as of January 2016 instead of 9.0%
Public utility tax (page 23):
Maryland Natural Gas and Electricity tax rate are:
Natural gas: $0.00402 per therm
Electricity: $0.00062 per kwh
Footnote added that reads: “All local telephone utility taxes in Virginia are taxed with 5%
statewide communications sales and use tax.”
Motor vehicle registration fees (page 16):
Footnote added that reads: 1/ “Vehicles are registered for two (2) years at time of titling or at the
time registration is renewed. The fees shown include a $34.00 surcharge for the EMS system”.
This applies to Charles County, MD, Montgomery County, MD, and Prince George’s County,
MD.
vi
INTRODUCTION
Each year the Office of Revenue Analysis in the Office of the Chief Financial Officer receives
numerous requests from citizens, legislators and the general public for statistics relating to
District tax collections, tax burdens and tax rates.
D.C. Tax Facts presents a brief summary of information on the District's tax structure, tax rates,
legal references and other comparative tax data. Tax rates used in this publication are those in
effect as of January 1, 2016. More detailed information on these subjects may be obtained
online from other publications of this office, including: (1) A Comparison of Tax Rates and
Burdens in the Washington Metropolitan Area, (2) Tax Rates and Tax Burdens in the District of
Columbia: A Nationwide Comparison, and 3) the biannual Tax Expenditure Report. These
publications are available on the Internet at www.cfo.dc.gov.
The primary source for the 2016 revenue numbers presented in this report is the District of
Columbia FY 2017 Proposed Budget and Financial Plan.
District of Columbia revenues (including non-tax revenues) totaled $7.91 billion in FY 2015.
Details concerning the various taxes used by the District are presented in this publication for the
purpose of taxpayer education and to enhance citizens’ awareness of their tax responsibilities.
Questions regarding this report should be directed to: Charlotte Otabor, Fiscal Analyst, Office of
the Chief Financial Officer, Office of Revenue Analysis, 1101 4
th
Street, SW, Suite W770,
Washington, DC 20024. Telephone: (202) 727-4054.
Fitzroy Lee, Ph. D.
Deputy Chief Financial Officer and Chief Economist
Office of Revenue Analysis
vii
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PART I -- D.C. GENERAL FUND REVENUE, FY 2015,
FY 2016 and FY 2017 (Estimated)
TABLE 1
GENERAL FUND
FISCAL YEAR 2015 REVENUE
(In Thousands of Dollars and Percent Composition)
Tax
FY 2015
Revenue
Percent of General Fund
Own Source Revenue
Real Property 1/
2,194,500
27.73%
Personal Property
57,225
0.72%
Public Space Rental
36,122
0.46%
General Sales 2/
1,315,295
16.62%
Alcoholic Beverages
6,244
0.08%
Cigarette
31,492
0.40%
Motor Vehicle
46,607
0.59%
Motor Fuel Tax 3/
25,256
0.32%
Individual Income
1,868,037
23.60%
Corporate Franchise
308,027
3.89%
U.B. Franchise
139,778
1.77%
Public Utility 4/
145,852
1.84%
Toll Telecommunications 4/
56,205
0.71%
Insurance Premiums 5/
104,507
1.32%
Healthcare Provider Tax 6/
12,854
0.16%
Ballpark fee 4/
34,942
0.44%
ICF-IDD Assessment 7/
5,032
0.06%
Estate
48,274
0.61%
Deed Recordation 8/
257,865
3.26%
Deed Transfer 8/
198,315
2.51%
Economic Interest 9/
24,412
0.31%
Total Taxes 10/
6,916,841
87.40%
Total Non-Tax
416,557
5.26%
Other Sources 11/
55,586
0.70%
Special Purpose (O Type) 12/
524,826
6.63%
Total General Fund 10/
7,913,810
100.00%
1/ Gross of transfer to the TIF Fund.
2/ Gross of legislated transfers to the Washington Convention Center Authority (WCCA) for retirement of debt, and to the Tax
Increment Financing (TIF) Fund, Ballpark Fund, Healthy Schools, ABRA, Healthy DC Fund, and WMATA.
3/ Gross of transfer to the Highway Trust Fund.
4/ Gross of transfer to the Ballpark Fund.
5/ Gross of transfer to the Healthy DC Fund.
6/ Gross of transfer to the Nursing Facility Quality of Care Fund.
7/ ICF-IDD Assessment transfers to Stevie Sellows Quality Improvement Fund.
8/ Gross of transfer to the Housing Production Trust Fund (HPTF)/ Bond repayment/ West End.
9/ Includes Coop Recordation Tax.
10/ Includes transfer of Dedicated Tax Revenue to Enterprise Funds in Fiscal Year 2015.
11/ Legalized gambling transfer (lottery).
12/ Special-Purpose Revenues, which are generated from fees, fines, assessments, or reimbursements that are dedicated to the
agency that collects the revenues, are often called “Other-Type,” or “O-Type” Funds.
Note: Some figures may differ from reported CAFR numbers as specific definitions of funds may vary.
2
TABLE 2
GENERAL FUND
FY 2016 and FY 2017 REVENUE ESTIMATES
(In Thousands of Dollars)
Tax
FY 2016
Estimates
FY 2017
Estimates
Real Property 1/
2,357,202
2,456,722
Personal Property
58,370
60,529
Public Space Rental
37,242
38,247
General Sales 2/
1,290,847
1,344,385
Alcoholic Beverages
6,369
6,618
Cigarette
30,623
29,398
Motor Vehicle
47,725
49,589
Motor Fuel Tax 3/
25,004
24,754
Individual Income
1,856,982
1,930,426
Corporate Franchise
287,766
284,516
U.B. Franchise
133,159
133,135
Public Utility 4/
146,582
147,315
Toll Telecommunications 4/
58,003
60,033
Insurance Premiums 5/
102,642
97,918
Healthcare Provider Tax 6/
14,591
14,883
Ballpark fee 4/
31,800
32,754
Hospital Inpatient Fee 7/
10,400
-
Hospital Outpatient Fee 8/
6,700
-
ICF-IDD Assessment 9/
5,478
5,519
Estate
34,521
29,519
Deed Recordation 10/
200,687
205,303
Deed Transfer 10/
143,697
146,571
Economic Interest11/
16,789
15,800
Total Taxes 12/
6,903,180
7,113,934
Total Non-Tax
422,082
422,779
Other Sources 13/
55,000
55,500
Special Purpose (O Type) 14/
524,376
537,854
Total General Fund 12/
7,904,637
8,130,067
1/ Gross of transfer to the TIF Fund.
2/ Gross of legislated transfers to the Washington Convention Center Authority (WCCA) for retirement of debt, and to the
Tax Increment Financing (TIF) Fund, Ballpark Fund, Healthy Schools, ABRA, Healthy DC Fund, and WMATA.
3/ Gross of transfer to the Highway Trust Fund.
4/ Gross of transfer to the Ballpark Fund.
5/ Gross of transfer to the Healthy DC Fund.
6/ Gross of transfer to the Nursing Facility Quality of Care Fund.
7/ Hospital Inpatient Fee transfers to Hospital Fund.
8/ Hospital Outpatient Fee transfers to Hospital Provider Fee Fund.
9/ ICF-MR Assessment transfers to Stevie Sellows Quality Improvement Fund.
10/ Gross of transfer to the Housing Production Trust Fund (HPTF)/ Bond repayment/ West End.
11/ Includes Coop Recordation Tax.
12/ Includes transfer of Dedicated Tax Revenue to Enterprise Funds in Fiscal Years 2016 and 2017.
13/ Legalized gambling transfer (lottery).
14/ Special-Purpose Revenues, which are generated from fees, fines, assessments, or reimbursements that are dedicated
to the agency that collects the revenues, are often called “Other-Type,” or “O-Type” Funds.
Note: March 24, 2016 estimates.
3
PART II – DISTRICT OF COLUMBIA TAXES AND NON-TAX REVENUE SOURCES
4
ALCOHOLIC BEVERAGE TAX
GENERAL LIABILITY:
The tax is levied on all alcoholic beverages manufactured by a holder of a manufacturer's
license and on all beverages brought into the District by the holder of a wholesaler's or retailer’s
license.
D.C. Code Citation: Title 25, Chapter 9.
PRESENT RATES: (January 1, 2016)
Beer -- $2.79 per 31 gallon barrel
Light wine (14% alcohol or less) -- 30¢ per gallon
Heavy wine (over 14% alcohol) -- 40¢ per gallon
Champagne and sparkling wine -- 45¢ per gallon
Spirits -- $1.50 per gallon
REVENUE:
Fiscal Year
Revenue
2015
$6,244,227
2016 (Estimate)
$6,369,111
2017 (Estimate)
$6,617,890
COMPARATIVE DATA: (January 1, 2016)
Metropolitan Area
Alcoholic Beverage Tax Facts
ITEM
DC
MD
VA
Beer (per barrel)
$2.79
1/
$2.79
1/
$8.06
Spirits (per gallon)
1.50
1/
1.50
1/
20% of retail price
Wine (per gallon)
14% or less alcohol
.30
1/
.40
1/
1.51
2/ 3/
More than 14% alcohol
.40
1/
.40
1/
1.51
2/ 3/
Sparkling wine (per gallon)
.45
1/
.40
1/
1.51
2/ 3/
1/ In addition, a 10% off- and on- premise sales tax applies in DC and a 9% sales tax applies in MD.
2/ In addition, state sales tax applies. This includes a $.40 per liter wine tax, and the 5.3% state sales tax applied at ABC
stores, except in Northern Virginia and Hampton Roads regions where the state sales tax rate applied is 6%. Wines with
under 4% of alcohol- $0.2565/gallon
3/ Some localities may apply additional tax.
5
CIGARETTE TAX
GENERAL LIABILITY:
The cigarette tax is levied on the sale or possession of all cigarettes in the District. Cigarettes
sold to the military and to Congress are exempt from the tax.
D.C. Code Citation: Title 47, Chapter 24.
PRESENT RATES: (January 1, 2016)
Tax on a pack of twenty or fewer cigarettes is $2.91 per package or 14.6¢ per cigarette, and on
little cigars that weigh no more than 4.5 pounds per thousand. The tax includes a $0.41 per pack
surtax in lieu of a retail sales tax. For more than 20 per pack, the surtax will be incrementally
increased by $0.0205 per each cigarette above 20.
Tax on “other tobacco products,” which are any product containing, made from, or derived from
tobacco, other than cigarettes or a $2.00-plus premium cigar, are taxed at 67% of the wholesale
sales of other tobacco products. The Vapor Product Amendment Act of 2015 expanded the term
“other tobacco product” to include vapor product which results in e-cigarettes being taxed at the
same rate as “other tobacco products”. The term “vapor product” means any non-lighting,
noncombustible product that uses a mechanical heating element, battery, or electronic circuit,
regardless of shape or size that can be used to produce aerosol from nicotine in a solution. This
includes any vapor cartridge or other container of nicotine in a solution or other form that is used
with or in an electronic cigarette, electronic cigar, electronic cigarillo, electronic pipe, or similar
product or device.
The term “other tobacco product” does not include any other product that has been approved by
the United States Food and Drug Administration for sale as a tobacco cessation product, as a
tobacco dependence product, or for other medical purposes and that is being marketed and sold
solely for such an approved purpose.
REVENUE:
Fiscal Year
Revenue
2015
$31,491,836
2016 (Estimate)
$30,622,661
2017 (Estimate)
$29,397,755
6
COMPARATIVE DATA: (January 1, 2016)
Metropolitan Area
Cigarette Tax Facts
State
Tax Per Pack of 20
DC
$2.91 1/
Maryland
$2.00
Virginia 2/
$0.30
Alexandria
$1.15
Arlington County 2/
$0.30
Fairfax City
$0.85
1/ Includes a per pack surtax in lieu of a retail sales tax
calculated every March 31. The current rate is 41¢.
2/ Plus additional local rates. Arlington county tax rate is
$0.375 on each pack containing 25 cigarettes
7
ESTATE TAX
GENERAL LIABILITY:
The estate tax is imposed on the estate of every decedent who died while still a resident of the
District, and on the estate of every nonresident decedent owning property having a taxable situs
in the District at the time of his or her death.
In response to the Federal Economic Growth and Tax Relief Reconciliation Act (EGTRRA) of
2001, the District decoupled from federal estate tax rules. The federal legislation gradually
eliminated the federal estate tax over the next several years, with full repeal taking effect in year
2010. However, the estate tax elimination was only temporary, as the full estate tax returned in
2011. The American Taxpayer Relief Act of 2012 permanently changed the estate tax after a
decade of flux. The federal estate tax rate is 40 percent and the exemption level ($5.45 million in
2016) is indexed for inflation.
By decoupling, the District has chosen to create its estate tax threshold. Hence, some District
estate tax payers may be required to file and pay District estate taxes even when no federal
filing or tax is due. The District’s estate tax rates are linked to federal estate tax credits that
were available prior to the enactment of EGTRRA. The highest rate of 16.0 percent applies to
estates valued at more than $10,000,000 (after allowable federal credits are taken).
The FY15 Budget Support Act instituted a revenue trigger for implementation of tax policy
changes recommended by the District’s Tax Revision Commission beyond FY 2015, one of
which raised the estate tax threshold from $1 million to $2 million. This change is stipulated
upon meeting some revenue triggers that would go into effect before the increase in the estate
tax threshold. This increase in the estate tax threshold became effective in FY 2016 based on
the February 2016 revenue forecast for the period FY 2016-FY 2020.
Virginia repealed its estate tax by the 2006 General Assembly for decedents whose date of
death occurs on or after July 1, 2007. Maryland estate tax rate is similar to the District of
Columbia. The highest Maryland tax rate is 16.0 percent of the amount by which the decedent’s
taxable estate exceeds the Maryland estate tax exemption ($2 million) amount for the year of the
decedent’s death (after allowable federal credits are taken).
There is no inheritance or gift tax in the District of Columbia.
D.C. Code Citation: Title 47, Chapter 37.
REVENUE:
Fiscal Year
Revenue
2015
$48,273,641
2016 (Estimate)
$34,521,000
2017 (Estimate)
$29,518,694
8
INCOME TAXES
CORPORATION AND UNINCORPORATED BUSINESS FRANCHISE TAXES
GENERAL LIABILITY:
The corporation franchise tax is imposed on corporations carrying on a trade, business or
profession in the District or receiving income from District sources. Whoever engages in a trade,
business or profession in the District of Columbia must register. Failure to register may result in
a fine of not more than $500 and a civil penalty of $50 for each and every separate day that
such failure to register continues.
The tax on unincorporated businesses is imposed on businesses with gross income over
$12,000. A 30% salary allowance for owners and a $5,000 exemption are deductible from net
income to arrive at taxable income. No person other than a corporation shall engage in or
conduct a trade, business or profession. A person who fails to obtain a trade or business license
may be fined not more than $300 for each day that such failure continues. The minimum tax is
$250 if DC gross receipts are less than $1 million and $1,000 if DC gross receipts are greater
than $1million.
Generally, persons exempt from filing an unincorporated business franchise tax return include
trade, business, or professional organizations having a gross income not in excess of $12,000
for the taxable year, and trade, business, or professional organizations which by law, customs,
or ethics cannot be incorporated, such as doctors and lawyers. A business is also exempt if
more than 80% of gross income is derived from personal services rendered by the members of
the entity and capital is not a material income-producing factor. Federal conformity is maintained
pursuant to Public Law 105-100.
D.C. Code Citation: Title 47, Chapter 18.
PRESENT RATES: (January 1, 2016)
The franchise tax rate was reduced, beginning January 1, 2016, to 9.2 percent through the
Fiscal Year 2015 Budget Support Act of 2014. Subject to availability of funding, the tax rate
would be further reduced to 9.0%, 8.75%, 8.5%, or 8.25%. Per Subchapter 17, Qualified High
Technology Companies are taxed at a rate of 6.0 percent after 5 years following the date that
the Qualified High Technology Company has taxable income. The tax credit for a Qualified High
Technology Company cannot exceed $15 million in total exemptions.
REVENUE:
Fiscal Year
Corporation
Unincorporated
Business
2015
$308,027,017
$139,778,436
2016 (Estimate)
$287,766,000
$133,159,358
2017 (Estimate)
$284,515,740
$133,135,137
9
INCOME TAXES—Continued
YEAR
DC BUSINESS FRANCHISE TAX
REVENUE ADJUSTED FOR
INFLATION (IN 2012 DOLLARS)
($000,000)
PERCENT OF
TOTAL TAX
COLLECTED
1995
$246.8
6.7%
1996
$229.0
6.3%
1997
$265.6
7.3%
1998
$315.7
7.9%
1999
$303.8
7.6%
2000
$355.0
8.4%
2001
$398.6
9.2%
2002
$275.3
6.5%
2003
$302.9
7.0%
2004
$318.4
6.7%
2005
$374.8
7.4%
2006
$413.8
7.9%
2007
$476.6
8.2%
2008
$443.6
7.8%
2009
$366.2
6.8%
2010
$338.3
6.5%
2011
$366.6
6.8%
2012
$465.9
8.0%
2013
$447.7
7.4%
2014
$404.0
6.6%
2015
$434.0
6.5%
10
INDIVIDUAL INCOME TAX
GENERAL LIABILITY:
The tax is imposed on every resident, defined as any individual who is domiciled in the District at
any time during the tax year, or who maintains an abode in the District for 183 or more days
during the year. On June 11, 1982, D.C. Law 4-118, the District of Columbia Individual, Estates,
and Trusts Federal Conformity Tax Act, which adopted the federal definition of income and
made other modifications to the D.C. income tax, became law. Provisions of this legislation are
effective for tax years beginning after December 31, 1981.
Further conformity to federal provisions was made pursuant to D.C. Law 5-32, the District of
Columbia Income and Franchise Tax Conformity Act of 1983; the Conformity Act of 1984; the
Income and Franchise Tax Conformity and Revision Amendment Act of 1987.
Under current District law (DC Law 13-175) federal changes in income and deductions are
adopted automatically. The latest conformity legislation is Public Law 105-100. It maintains the
District’s limited conformity with the Internal Revenue Code (IRC) of 1986 as amended through
August 20, 1996.
D.C. Code Citation: Title 47, Chapter 18.
PRESENT RATES: (January 1, 2016)
Taxable Income
Tax Rate
First $10,000
4.0%
Over $10,000, but not over $40,000
$400 + 6.0% of excess>$10,000
Over $40,000, but not over $60,000
$2,200 + 6.5% of excess>$40,000
Over $60,000, but not over $350,000
$3,500 + 8.5% of excess>$60,000
Over $350,000, but not over $1,000,000
$28,150 + 8.75% of excess > $350,000
Over $1,000,000
$85,025 + 8.95% of excess > $1,000,000
Standard Deduction/Exemption*
Standard Deduction
Single/Married Filing Separate
Married Filing Jointly
Head of Household
$5,200
$8,350
$6,500
Exemptions
Personal Exemption
$1,775
*Beginning January 1, 2013, the standard deduction and personal exemption amounts are increased annually
by a cost-of-living adjustment.
REVENUE:
Fiscal Year
Revenue
2015
$1,868,037,067
2016 (Estimate)
$1,856,982,173
2017 (Estimate)
$1,930,425,864
11
INDIVIDUAL INCOME TAX-Continued
YEAR
DC INDIVIDUAL INCOME TAX
REVENUE ADJUSTED FOR
INFLATION (IN 2012 DOLLARS)
($000,000)
PERCENT OF TOTAL
TAX COLLECTED
1995
$988.5
26.9%
1996
$1,024.0
28.3%
1997
$1,090.6
29.9%
1998
$1,227.3
30.7%
1999
$1,329.4
33.1%
2000
$1,464.0
34.6%
2001
$1,449.3
33.3%
2002
$1,236.9
29.4%
2003
$1,180.0
27.5%
2004
$1,292.9
27.4%
2005
$1,392.1
27.3%
2006
$1,426.5
27.3%
2007
$1,482.1
25.5%
2008
$1,442.0
25.2%
2009
$1,215.8
22.5%
2010
$1,160.6
22.2%
2011
$1,321.4
24.3%
2012
$1,490.7
25.5%
2013
$1,620.6
26.9%
2014
$1,632.4
26.7%
2015
$1,810.6
27.0%
12
INSURANCE PREMIUMS TAX
GENERAL LIABILITY:
The tax is imposed on the gross insurance premiums received for insuring against risks in the
District, less premiums received for reinsurance assumed, returned premiums and dividends
paid to policyholders. All domestic and foreign insurance companies are liable for the tax, which
is in lieu of all other taxes except real estate taxes and fees provided for by the District's
insurance law.
D.C. Code Citation: Title 31; Title 47, Chapter 26.
REVENUE:
Fiscal Year
Gross Revenue
Net Revenue
2015
$104,507,000
$59,702,000
2016 (Estimate)
$102,642,495
$57,250,236
2017 (Estimate)
$97,918,165
$51,618,061
TRANSFER TO HEALTHY DC and HEALTH CARE EXPANSION FUND:
Fiscal Year
Transfer Amount
2015
$44,805,000
2016 (Estimate)
$45,392,259
2017 (Estimate)
$46,300,104
COMPARATIVE DATA: (January 1, 2016)
Insurance Premiums Tax Facts
Type of Company/Policy
DC
1/
MD
VA
Life insurance companies
1.7%
2.00%
2.25%
Life insurance special benefits
1.7%
2.00%
2.25%
Domestic mutual companies
1.7%
2.00%
1.00%
Industrial sick benefit companies
1.7%
2.00%
1.00%
Worker’s compensation
1.7%
2.00%
2.50%
Other
2.00%
2/
2.00%
3/
2.25%
4/
Legal service insurance companies
---
---
2.25%
1/ Of insurance premium taxes generated by policies with health maintenance organizations
(HMO), 75% of the 2.00% is distributed to the Healthy DC fund for the purpose of providing affordable health
benefits to eligible individuals.
2/ 2.0% on accident and health insurance policy.
3/ 3.0% on unauthorized insurers and surplus line brokers.
4/ Includes surplus line brokers.
13
MOTOR VEHICLE TAXES
MOTOR VEHICLE EXCISE TAX
GENERAL LIABILITY:
The excise tax is imposed on the issuance of every original and subsequent certificate of title on
motor vehicles and trailers. Vehicles brought into the District by new residents, who have been
titled elsewhere, are exempt from the tax.
D.C. Code Citation: Title 50, Chapter 22.
PRESENT RATES: (January 1, 2016)
Based on manufacturer's shipping weight
6% of fair market value-3,499 pounds or less
7% of fair market value-3,500 - 4,999 pounds
8% of fair market value-5,000 pounds or more
0% for hybrid vehicles
REVENUE:
Fiscal Year
Revenue
2015
$46,606,745
2016 (Estimate)
$47,725,307
2017 (Estimate)
$49,589,469
COMPARATIVE DATA: (January 1, 2016)
Metropolitan Area Motor Vehicle
Excise Tax Facts
State
Rate
(based on FMV)
DC 1/
6-8%
Maryland 1/
6%
Virginia 2/
4.10%
1/ Based on fair market value. In Maryland, there is a minimum tax of $38.40.
2/ Based on vehicle’s gross sales price, or $75, whichever is greater. An additional $64 fee applies to hybrid and electric
vehicles, excluding mopeds.
14
MOTOR VEHICLE FUEL TAX
GENERAL LIABILITY:
The tax is imposed on every importer of motor vehicle fuels, including gasoline, diesel fuel,
benzol, benzene, naphtha, kerosene, heating oils, all liquefied petroleum gases and all
combustible gases and liquids suitable for the generation of power for the propulsion of motor
vehicles. Since October 1, 1996, the revenue from the motor vehicle fuel tax has been deposited
into the Highway Trust Fund, rather than the General Fund.
Effective October 1, 2013, the District levies the motor fuel vehicle tax at the wholesale level,
equal to 8 percent of the average wholesale price of a gallon of regular unleaded gasoline. The
average wholesale price will be calculated for adjustment twice a year. As a result, the tax rate
may change each year. The average wholesale price will be determined by the District and
published by February 1 and August 1 of each year. The floor on the wholesale price for the
calculation of the tax is $2.94, or 23.5 cents per gallon. This is the average wholesale price in
effect as of January 2016; it may increase in the future.
D.C. Code Citation: Title 47, Chapter 23.
PRESENT RATES: (January 1, 2016)
23.5¢ per gallon
REVENUE:
Fiscal Year
Revenue
2015
$25,256,173
2016 (Estimate)
$25,003,611
2017 (Estimate)
$24,753,575
COMPARATIVE DATA: (January 1, 2016)
Metropolitan Area Gasoline Tax Facts
State
Rate per Gallon
DC
$0.235
Maryland
$0.326
Virginia*
$0.162
* Virginia also has a 2.1% local wholesale sales tax on fuel sold in the Northern Virginia and Hampton Roads
Planning District Commission areas.
15
MOTOR VEHICLE REGISTRATION FEES
GENERAL LIABILITY:
Fees are imposed on every vehicle operated over the highways of the District of Columbia by a
resident. A resident has the option of registering every two years.
D.C. Code Citation: Title 50, Chapter 15.
PRESENT RATES: (January 1, 2016) - Based on manufacturer's shipping weight
PASSENGER CARS – Class A
Class I (3,499 pounds or less)
$ 72
Class II (3,500 – 4,999 pounds)
$115
Class III (5,000 pounds or greater)
$155
Class IV (clean fuel or electric vehicle [Hybrid])
$ 36
Motorized bicycle
$ 30
Motorcycles
$ 52
Antique vehicles
$ 25
TRUCKS AND BUSES – Class B
Class I (3,499 pounds or less)
$125
Class II (3,500 – 4,999 pounds)
$160
Class III (5,000 – 6,999 pounds)
$220
Class IV (7,000 – 9,999 pounds)
$300
Class V (10,000 pounds or greater) 1/
$575
TRAILERS – Class C
Class I (1,499 pounds or less)
$ 50
Class II (1,500 – 3,499 pounds)
$125
Class III (3,500 – 4,999 pounds)
$250
Class IV (5,000 – 6,999 pounds)
$400
Class V (7,000 – 9,999 pounds)
$500
Class VI (10,000 pounds – or greater) 2/
$500
Driver’s license (1
st
time & renewal) 3/
$ 47
Learner’s permit
$ 20
Driver’s license reinstatement
$ 98
Driver’s instructor license
$ 78
Vehicle titles:
New titles
Duplicate titles
Lien recordation (per lien)
$ 26
$ 26
$ 20
Temporary tags
$ 13
Inspection fee 4/
$ 35
Residential parking permits
$ 35
Reciprocity parking permit for students
$338
1/ Additional $25 per 1,000 pounds over 10,000 pounds.
2/ Additional $50 per 1,000 pounds over 10,000 pounds.
3/ Eight years.
4/ Two years.
Source: DC Department of Motor Vehicles, www.dmv.dc.gov.
16
MOTOR VEHICLE REGISTRATION FEES-Continued
REVENUE:
Fiscal Year
Revenue
2015
$28,001,000
2016 (Estimate)
$26,875,000
2017 (Estimate)
$27,212,000
COMPARATIVE DATA: (January 1, 2016)
METROPOLITAN AREA MOTOR VEHICLE REGISTRATION FEES
PASSENGER VEHICLE WEIGHTS
JURISDICTION
3,499 lbs.
OR LESS
3,500–
3,700 lbs.
3,701–
4,999 lbs.
OVER
5,000 lbs.
District of Columbia
$72.00
$115.00
$115.00
$155.00
Charles County, MD 1/
135.00
135.00
187.00
187.00
Montgomery County, MD 1/
135.00
135.00
187.00
187.00
Prince George’s County, MD 1/
135.00
135.00
187.00
187.00
Alexandria, VA 2/
73.75
73.75
78.75
78.75
Arlington County, VA 2/
73.75
73.75
78.75
78.75
Fairfax, VA 2/
73.75
73.75
78.75
78.75
Fairfax County, VA 2/
73.75
73.75
83.75
83.75
Falls Church, VA 2/
73.75
73.75
78.75
78.75
Loudoun County, VA 2/
65.75
65.75
70.75
70.75
Prince William County, VA 2/
64.75
64.75
69.75
69.75
1/ Vehicles are registered for two (2) years at time of titling or at the time registration is renewed. The fees shown
include a $34.00 surcharge for the EMS system
2/ Autos also subject to personal property tax. Rates shown include a $40.75 state fee on vehicles weighing 4,000
pounds or less and a $45.75 fee on vehicles weighing more than 4,000 pounds.
17
PROPERTY TAXES
PERSONAL PROPERTY TAX
GENERAL LIABILITY:
The tax is levied on all tangible property, except inventories, used in a trade or business. Such
property includes machinery, equipment, furniture and fixtures.
D.C. Code Citation: Title 47, Chapter 15.
PRESENT RATE:
$3.40 per $100 of assessed value; the first $225,000 of taxable value is excluded from tax.
REVENUE:
Fiscal Year
Gross Revenue
2015
$57,225,000
2016 (Estimate)
$58,369,500
2017 (Estimate)
$60,529,172
COMPARATIVE DATA: (January 1, 2016)
Metropolitan Area Personal Property Tax
Facts 1/
Jurisdiction
Rate
District of Columbia
$3.4000
Charles County, MD
$3.0125
2/
Montgomery County, MD
$1.8075
2/
Prince George’s County, MD
$4.2500
2/
Alexandria, VA
$5.0000
3/
4/
Arlington County, VA
$5.0000
3/
Fairfax City, VA
$4.1300
3/
Fairfax County, VA
$4.5700
3/
Falls Church, VA
$4.8400
3/
Loudoun County, VA
$4.2000
3/
Prince William County, VA
$3.7000
3/
1/ Personal property tax year in the Virginia area jurisdictions is on a calendar year basis. The rates submitted by
Virginia jurisdictions for this report are applicable to calendar year 2014. The District of Columbia tax rate is from D.C.
Official Code. In the Maryland area jurisdictions, the 2015 personal property year tax is July 1, 2015 to June 30, 2016.
The rates presented are those in effect for this period. Since 2001, the Virginia personal property tax relief varies by
jurisdiction for qualifying vehicles.
2/ Rate applied to non-town businesses. Maryland property tax rate is not levied against personal property; the 2015
personal property year tax is July 1, 2015 to June 30, 2016.
3/ Rate applied to regular individual personal property, and business tangible personal property.
4/ Personal property rate of $3.55 for vehicles with specially-designed equipment for disabled persons.
Note: The above rates are per $100 of assessed value.
18
PERSONAL PROPERTY TAX-continued
YEAR
DC PERSONAL PROPERTY TAX
REVENUE ADJUSTED FOR INFLATION
(IN 2012 DOLLARS)
($000,000)
PERCENT OF
TOTAL TAX
COLLECTED
1995
$94.1
2.6%
1996
$96.8
2.7%
1997
$87.4
2.4%
1998
$97.5
2.4%
1999
$103.2
2.6%
2000
$95.3
2.3%
2001
$84.7
1.9%
2002
$85.0
2.0%
2003
$85.5
2.0%
2004
$78.8
1.7%
2005
$86.5
1.7%
2006
$75.8
1.5%
2007
$76.0
1.3%
2008
$64.1
1.1%
2009
$74.0
1.4%
2010
$54.4
1.0%
2011
$53.7
1.0%
2012
$55.7
1.0%
2013
$54.2
0.9%
2014
$53.9
0.9%
2015
$55.5
0.8%
19
REAL PROPERTY TAX
GENERAL LIABILITY:
The District of Columbia property tax uses four classifications of real property: Class I--
residential real property; Class II--commercial and industrial property, including hotels and
motels; Class III—vacant property; and Class IV—blighted property. All real properties, other
than expressly exempted properties, are subject to taxation at 100% of estimated market value.
The assessed value for each Class I owner-occupied residence (including condominiums) which
qualifies as a homestead is reduced by a $71,700 homestead deduction. Homestead properties
are also subject to a 10% property tax cap whereby the property tax paid on the property is
limited to at most 110% of the tax paid the previous year. This exemption is indexed annually
(by the CPI) on October 1st of each year. For qualified senior homeowners, as well as
homeowners with a disability, the District allows an additional 50 percent reduction in the
amount of real property taxes that would otherwise be payable. In addition, a property tax
deferral program allows qualified low income homeowners, with total household Adjusted Gross
Income (AGI) of $50,000 or less, to defer a portion of their taxes.
First-time homeowners may be eligible for abatement of real property taxes for a period of five
years under the First Time Homebuyers Lower Income Home Ownership Tax Abatement
program. Another Lower Income, Long-term Homeowners Tax Credit was passed by the DC
Council to ease the effect of rising assessments and taxes on low-income residents who have
lived in their homes seven consecutive years or more. To access this credit, homeowners must
have occupied the property as their principal residence for at least the last seven (7)
consecutive years, be receiving the Homestead Deduction, and must meet specific income
requirements. Owners of certain certified historic buildings may receive property tax relief
through a special assessment if the owners enter an agreement with the city for at least twenty
years. The District also has a property tax relief "circuit-breaker" program for qualified
homeowners and renters (with adjusted gross income of $40,000 or less), which provides a tax
credit for those with low and moderate income, the elderly, blind and disabled.
District law limits the estimated amount of total real property taxes collected from all residential
properties (Class I) by limiting the annual growth in total real property taxes from all residential
properties, by way of a calculated tax rate. If, just before the start of the fiscal year, it is
estimated that actual Class I revenue will exceed the targeted growth amount, the residential tax
rate is to be lowered to achieve only the statutorily specified revenue amount.
Class II properties are subject to a split tax rate structure. The tax rate for the first $3 million in
assessed value for Class II properties is set at $1.65 per $100 of assessed value and the tax
rate for assessed valued greater than $3 million is $1.85 per $100 of assessed value.
Additionally, legislation limits the growth in total Class II revenue to 10 percent annually. If, just
before the start of the fiscal year, it is estimated that actual Class II revenue will exceed the
targeted growth amount, the tax rate for the first $3 million of assessed value is to be lowered to
achieve only the statutorily specified revenue amount for all of Class II properties.
D.C. Code Citation: Title 47, Chapters 7-10, 13, 13A.
The District's Real Property Tax Year is October 1 through September 30.
20
REAL PROPERTY TAX- Continued
REVENUE:
Fiscal Year
Gross Revenue
Net Revenue
2015
$2,194,499,764
$2,154,319,715
2016 (Estimate)
$2,357,202,000
$2,310,808,000
2017 (Estimate)
$2,456,722,000
$2,417,103,000
Tax Increment Financing (TIF) Program and PILOT Transfers:
Fiscal Year
Transfer
Amount
2015
$40,180,050
2016 (Estimate)
$46,394,000
2017 (Estimate)
$39,619,000
COMPARATIVE DATA: (January 1, 2016)
METROPOLITAN AREA REAL PROPERTY TAX FACTS
JURISDICTION
NOMINAL TAX
PER $100
VALUE
LEGAL
ASSESSMENT
(% of estimated
market value)
TAX RATE PER
$100 VALUE 6/
D.C.
Class I (residential) 1/
Class II (commercial) 2/
Class III (vacant)
Class IV (blighted)
$ 0.850
$ 1.850
$ 5.000
$10.00
100%
100%
100%
100%
$ 0.850
$ 1.850
$ 5.000
$10.00
MARYLAND 8/
Charles Co. 3/ 4/
Montgomery Co. 5/
Prince George’s Co. 3/
$ 1.317
$ 1.099
$ 1.112
100%
100%
100%
$ 1.317
$ 1.099
$ 1.112
VIRGINIA 8/
Alexandria 6/ 7/
Arlington Co.
Fairfax City
Fairfax Co.
Falls Church
Loudoun Co.
Prince William Co.
$ 1.073
$ 0.996
$ 1.062
$ 1.090
$ 1.315
$ 1.145
$ 1.122
100%
100%
100%
100%
100%
100%
100%
$ 1.073
$ 0.996
$ 1.062
$ 1.090
$ 1.315
$ 1.145
$ 1.122
1/ The first $71,700 of assessed value is exempt from the tax on owner-occupied housing.
2/ 1st $3(M) rate is $1.65 per $100 of assessed value.
3/ Rates shown include a state rate of 11.2 cents per $100 of assessed value.
4/ Rates are different in tax districts with various levies for fire, rescue and recreation.
5/ Montgomery County property tax rate is a weighted rate.
6/ Nominal tax rate x assessment = tax rate.
7/ On March 15, 2016, the Alexandria City Council voted unanimously that it will consider a 2016 calendar
year real estate tax rate of up to $1.073 per $100 of assessed value. The 2016 real property tax rate of
$1.043 might therefore be temporary.
8/ Virginia and Maryland’s fiscal year cycle is from July 1
st
through June 30
th
, while the District of Columbia’s
fiscal year cycle is from October 1
st
through September 30
th
. The rates for Virginia and Maryland will
therefore be a fiscal year behind to match D.C’s fiscal year.
21
REAL PROPERTY TAX-Continued
YEAR
DC REAL PROPERTY TAX
REVENUE ADJUSTED FOR
INFLATION (IN 2012
DOLLARS)
($000,000)
PERCENT OF TOTAL
TAX COLLECTED
1995
$1,004.8
27.4%
1996
$927.4
25.7%
1997
$894.1
24.5%
1998
$878.8
22.0%
1999
$834.3
20.8%
2000
$830.1
19.6%
2001
$835.6
19.2%
2002
$946.1
22.5%
2003
$1,045.2
24.3%
2004
$1,175.5
24.9%
2005
$1,272.8
25.0%
2006
$1,334.2
25.5%
2007
$1,634.2
28.1%
2008
$1,796.6
31.4%
2009
$1,950.9
36.1%
2010
$1,903.7
36.4%
2011
$1,747.8
32.2%
2012
$1,822.0
31.1%
2013
$1,891.2
31.4%
2014
$1,959.4
32.0%
2015
$2,127.0
31.7%
22
PUBLIC SPACE RENTAL
GENERAL LIABILITY:
The tax is imposed on commercial use of publicly-owned property between the property line and
the street
D.C. Code Citation: Title 10, Chapter 11.
PRESENT RATE: (January 1, 2016)
Various rates for the following: vault, sidewalk (enclosed and unenclosed cafes), surface and
fuel oil tank.
Calculation of Vault Rental Fees
Vault Rental Fee = (assessed value of the land by square foot) x (vault square footage) x
(utilization factor)
Note: The assessed value of the land is determined by the Office of Tax & Revenue; the vault square footage is supplied
by the D.C. Department of Transportation’s Public Space Regulation Administration (PSRA); rent per fuel oil tank is $100;
and the utilization factor is currently 1.2% for vaults with a single level and .30% for additional levels (which is applied
based on information supplied by PSRA).
REVENUE:
Fiscal Year
Gross Revenue
2015
$36,122,000
2016 (Estimate)
$37,241,782
2017 (Estimate)
$38,247,310
23
PUBLIC UTILITY TAX
GENERAL LIABILITY:
The tax is imposed on the gross receipts of telephone, television and radio companies and on
the units delivered to customers of natural gas, electricity and heating oil.
D.C. Code Citation: Title 47, Chapter 25.
PRESENT RATE: (January 1, 2016)
Note: Non-residential rates are 10% (1% for television, radio and telephone) greater than the
residential rates. The 10% surcharge on non-residential customers is dedicated to the Ballpark
Revenue Fund.
REVENUE:
Fiscal Year
Gross Revenues
Net Revenues
2015
$145,852,364
$137,171,085
2016 (Estimate)
$146,581,625
$137,813,534
2017 (Estimate)
$147,314,534
$138,458,761
Transfer to Ballpark Revenue Fund:
Fiscal Year
Transfer Amount
2015
$8,681,279
2016 (Estimate)
$8,768,092
2017 (Estimate)
$8,855,773
COMPARATIVE DATA: (January 1, 2016)
METROPOLITAN AREA UTILITY TAX FACTS
JURISDICTION
UTILITIES SUBJECT TO
TAX
RATE
BASIS
District of Columbia
Television, radio and
telephone
10.0%
11.0%
Gross receipts
Residential
Non-residential
Heating oil
$0.170
$0.187
Per Gallon
Residential
Non-residential
Natural gas
$0.0707
$0.07777
Per Therm
Residential
Non-residential
Electric distribution
$0.0070
$0.0077
Per Kilowatt Hr
Residential
Non-residential.
Maryland
Electric, light and power, gas,
oil pipeline , telegraph and
telephone companies
2.0%
Gross receipts
Natural gas
$0.00402
Per Therm
Electricity
$0.00062
Per Kilowatt Hr
Virginia 3/
Water
2.0%
Gross receipts
Electric 1/
Less than 2,500 kWh
2,500 – 50,000 kWh
Above 50,000 kWh
Gas 1/
Below 500 CCF
$0.00155/kWh
$0.00099/kWh
$0.00075/kWh
$0.0135/CCF
Utility Consumption
1/ Local consumption tax rates and a special regulatory tax rate may also apply.
2/ Telephone companies are subject to the corporate income tax, not the utility gross receipts tax.
3/ All local telephone utility taxes in Virginia are taxed with a 5% statewide communications sales and use tax.
24
PUBLIC UTILITY TAX-continued
YEAR
DC PUBLIC UTILITY TAX REVENUE
ADJUSTED FOR INFLATION
(IN 2012 DOLLARS)
($000,000)
PERCENT OF
TOTAL TAX
COLLECTED
1995
$201.2
5.5%
1996
$215.1
6.0%
1997
$205.4
5.6%
1998
$201.0
5.0%
1999
$179.4
4.5%
2000
$180.5
4.3%
2001
$196.8
4.5%
2002
$183.7
4.4%
2003
$211.8
4.9%
2004
$210.2
4.5%
2005
$208.9
4.1%
2006
$179.4
3.4%
2007
$184.8
3.2%
2008
$164.9
2.9%
2009
$161.7
3.0%
2010
$156.6
3.0%
2011
$152.6
2.8%
2012
$139.8
2.4%
2013
$140.7
2.3%
2014
$141.6
2.3%
2015
$141.4
2.1%
25
RECORDATION AND TRANSFER TAXES
GENERAL LIABILITY:
Recordation Tax
The recordation tax is imposed on the recording of all deeds to real estate in the District. The
basis of the tax is the amount of consideration given for the property, including cash, property
other than cash, mortgages, liens and security interest in non-residential property. Where there
is no consideration or where the consideration is nominal, the tax is imposed on the basis of the
fair market value of the property.
D.C. Code Citation: Title 42, Chapter 11.
PRESENT RATE: (January 1, 2016)
Deed Recordation
1.1% of consideration or fair market value for residential property transfers < $400,000
1.45% of consideration or fair market value on the entire amount for all other deed transfers is ≥
$400,000
REVENUE:
Fiscal Year
Gross Revenue
Net Revenue
2015
$257,865,239
$219,185,453
2016 (Estimate)
$200,687,246
$170,584,159
2017 (Estimate)
$205,303,053
$174,507,595
Transfer Tax
The transfer tax is imposed on each transfer of real property at the time the deed is submitted
for recordation. The tax is based upon the consideration paid for the transfer. Where there is
no consideration or where the amount is nominal, the basis of the transfer tax is the fair market
value of the property conveyed.
D.C. Code Citation: Title 47, Chapter 9.
PRESENT RATE: (January 1, 2016)
Deed Transfer
1.1% of consideration or fair market value for residential property transfers < $400,000
1.45% of consideration or fair market value on the entire amount all other deed transfers is ≥
$400,000
REVENUE:
Fiscal Year
Gross Revenue
Net Revenue
2015
$198,314,992
$168,567,743
2016 (Estimate)
$143,697,105
$122,142,539
2017 (Estimate)
$146,571,047
$124,585,390
Note: All property other than Class 1 taxed at 1.45% of consideration or full market value of transfer.
26
RECORDATION AND TRANSFER TAXES
Fifteen percent of the District’s real estate transfer taxes and 15 percent of deed recordation
taxes are deposited into the Housing Production Trust Fund.
Housing Production Trust Fund Transfers/ Bond repayment/ West End:
Fiscal Year
Recordation
Tax
Transfer
Tax
2015
$38,679,786
$29,747,249
2016 (Estimate)
$30,103,087
$21,554,566
2017 (Estimate)
$30,795,458
$21,985,657
Economic Interest Tax
The economic interest tax is triggered by either one of the following two elements: 1) more than
50% of the controlling interest of the property owner is transferred; and 2) 80% of the assets of
the property owner consist of real property located in DC.
A transfer of shares in a cooperative housing association in connection with the grant, transfer
or assignment of proprietary leasehold or other proprietary interest, in whole or in part, is defined
as a transfer of an economic interest and subject to the tax.
D.C. Code Citation: Title 42, Chapter 11.
PRESENT RATE: (January 1, 2016)
2.9% of consideration or fair market value, except that in the case of a transfer of economic
interest in a cooperative housing association where the consideration is less than $400,000, the
rate of taxation shall be 2.2%
REVENUE:
Fiscal Year
Economic Interest
Transfer
2015
$24,411,923
2016 (Estimate)
$16,789,000
2017 (Estimate)
$15,800,000
27
RECORDATION AND TRANSFER TAXES-continued
YEAR
DC DEED RECORDATION
& TRANSFER TAX REVENUE ADJUSTED
FOR INFLATION (IN 2012 DOLLARS)
($000,000)
PERCENT OF
TOTAL TAX
COLLECTED
1995
$68.4
1.9%
1996
$88.8
2.5%
1997
$83.9
2.3%
1998
$137.4
3.4%
1999
$163.9
4.1%
2000
$142.8
3.4%
2001
$182.2
4.2%
2002
$198.3
4.7%
2003
$302.7
7.0%
2004
$417.8
8.9%
2005
$404.4
7.9%
2006
$381.8
7.3%
2007
$427.7
7.4%
2008
$288.2
5.0%
2009
$191.6
3.5%
2010
$216.8
4.1%
2011
$301.9
5.6%
2012
$284.9
4.9%
2013
$357.0
5.9%
2014
$350.0
5.7%
2015
$442.2
6.6%
28
SALES AND USE TAX
GENERAL LIABILITY:
The District of Columbia has five tax categories that fall under the general sales and use tax.
The retail sales tax rate of 5.75% is imposed on all tangible personal property sold or rented at
retail in the District and on certain selected services. Grocery-type foods, prescription and non-
prescription drugs, and professional services such as consulting, engineering, legal, and
physician services, are among the items exempt from the sales tax. Construction materials and
business purchases of public utility services are among those included. The Tax Revision
Commission Implementation Amendment Act of 2014 (BSA Subtitle (VII) (B)) expanded the
sales tax base to include some services not taxed in the District of Columba. These include
bottled water delivery services and other direct selling establishments, carpet and upholstery
cleaning services, fitness and recreational sports centers, and other personal care services
such as tanning, car washes, bowling centers and billiard parlors. The other rate categories
apply to goods and services as indicated below.
The use tax is imposed at the same rate on property sold or purchased outside the District and
then brought into the District to be used, stored or consumed. Vendors subject to the jurisdiction
of the District are required to collect and pay the use tax. When the vendor is not subject to the
jurisdiction of the District, or when the purchaser brings the property into the District, the
purchaser is required to pay the tax.
D.C. Code Citation: Title 47, Chapters 20 and 22.
PRESENT RATES: (January 1, 2016)
A five-tier rate structure is presently in effect:
5.75% Retail rate for sales of certain tangible personal property and selected services, non-
alcoholic soft drinks, food, or drinks sold in vending machines
6.0% Medical marijuana
10.0% Restaurant meals, liquor sold for consumption on and off the premises, rental vehicles,
prepaid telephone cards, tickets sold for baseball games, merchandise sold at the
baseball stadium, tickets sold for events at the Verizon Center and merchandise sold at
the Verizon Center
14.5% Hotels (transient accommodations)
18.0% Parking of motor vehicles in commercial lots
Note: The following portions of the sales tax go to the Convention Center Fund: 1% from restaurant meals and 4.45%
from transient accommodations. The 18% parking tax in commercial lots tax is dedicated to WMATA. The 6% tax on
medical marijuana is dedicated to the Healthy DC and Health Care Expansion Fund.
There are other transfers from gross sales and use tax including Tax Increment Financing Funds, Ballpark Fund,
Healthy Schools and ABRA.
29
REVENUE:
Fiscal Year
Gross Revenue
Net Revenue
2015
$1,315,294,853
$1,073,401,642
2016 (Estimate)
$1,290,847,232
$1,057,023,225
2017 (Estimate)
$1,344,385,219
$1,106,148,031
Transfers to:
Fiscal Year
Convention Center
Tax Increment Financing (TIF)
2015
$116,448,328
$37,554,203
2016 (Estimate)
$113,971,472
$29,603,000
2017 (Estimate)
$119,100,188
$28,095,000
Fiscal Year
Ballpark Fund
Healthy DC Fund
2015
$14,904,089
$106,000
2016 (Estimate)
$17,900,000
$250,000
2017 (Estimate)
$18,509,000
$427,000
Fiscal Year
WMATA
Healthy Schools
2015
$67,445,591
$4,265,000
2016 (Estimate)
$66,663,535
$4,266,000
2017 (Estimate)
$66,670,000
$4,266,000
Fiscal Year
ABRA
2015
$1,170,000
2016 (Estimate)
$1,170,000
2017 (Estimate)
$1,170,000
30
SALES AND USE TAX—Continued
YEAR
DC SALES & USE TAX REVENUE ADJUSTED
FOR INFLATION (IN 2012 DOLLARS)
($000,000)
PERCENT OF
TOTAL TAX
COLLECTED
1995
$745.8
20.3%
1996
$694.4
19.2%
1997
$698.2
19.1%
1998
$793.6
19.8%
1999
$827.5
20.6%
2000
$870.0
20.5%
2001
$888.3
20.4%
2002
$868.2
20.6%
2003
$876.9
20.4%
2004
$909.5
19.3%
2005
$1,033.3
20.3%
2006
$1,051.0
20.1%
2007
$1,082.9
18.6%
2008
$1,090.2
19.1%
2009
$1,041.9
19.3%
2010
$1,020.8
19.5%
2011
$1,034.3
19.1%
2012
$1,111.0
19.0%
2013
$1,123.8
18.7%
2014
$1,139.4
18.6%
2015
$1,274.8
19.0%
31
TOLL TELECOMMUNICATIONS TAX
GENERAL LIABILITY:
The tax is imposed on telecommunication companies, including wireless telecommunications
providers, for the privilege of providing toll telecommunication service in the District. The service
charge is on any sound, vision or speech communication for which there is a toll charge that
varies in amount with the distance or elapsed transmission time of each individual
communication or the transmission or reception of any sound, vision or speech communication
that entitles a person upon the payment of a periodic charge that is determined as a flat amount
or upon the basis of a total elapsed transmission time, to an unlimited number of
communications to or from all or a substantial portion of persons who have telephone or radio
telephone stations in a specified area outside the local telephone system area in which the
station that provides the service is located.
The items clearly omitted from this tax are anything to do with equipment sales, rental,
maintenance, repair or charges.
D.C. Code Citation: Title 47, Chapter 39.
PRESENT RATE: (January 1, 2016)
10% of gross charges – residential
11% of gross charges – non-residential
Note: Non-residential rates are 1% greater than the residential rates. The incremental revenue from the non-residential
rate is dedicated to the Ballpark Revenue Fund established by [D.C. Code 10-1601.02].
REVENUE:
Fiscal Year
Gross Revenue
Net Revenue
2015
$56,204,730
$53,524,028
2016 (Estimate)
$58,003,281
$55,770,847
2017 (Estimate)
$60,033,396
$57,722,826
Transfer to Ballpark Fund:
Fiscal Year
Transfer Amount
2015
$2,680,702
2016 (Estimate)
$2,232,434
2017 (Estimate)
$2,310,570
Metropolitan Area:
TOLL TELECOMMUNICATIONS TAX RATES
District of Columbia
Maryland
1
Virginia
2
10.0% Residential
11.0% Non-residential
4.0%
4.0%
5%
5%
1
Maryland’s tax is a public service company franchise tax on gross receipts.
2
Virginia’s tax is a communications sales tax, which is listed on consumers’ bills.
32
TOLL TELECOMMUNICATIONS TAX-continued
YEAR
DC TOLL TELECOMMUNICATIONS
TAX REVENUE ADJUSTED FOR
INFLATION (IN 2012 DOLLARS)
($000,000)
PERCENT OF
TOTAL TAX
COLLECTED
1995
$68.4
1.9%
1996
$67.5
1.9%
1997
$76.7
2.1%
1998
$80.8
2.0%
1999
$72.4
1.8%
2000
$65.6
1.5%
2001
$67.6
1.6%
2002
$72.1
1.7%
2003
$67.7
1.6%
2004
$68.2
1.4%
2005
$66.6
1.3%
2006
$65.5
1.3%
2007
$66.6
1.1%
2008
$70.6
1.2%
2009
$71.3
1.3%
2010
$65.7
1.3%
2011
$62.0
1.1%
2012
$58.6
1.0%
2013
$56.1
0.9%
2014
$51.1
0.8%
2015
$54.5
0.8%
33
BASEBALL GROSS RECEIPTS TAX
(Transferred to Ballpark Revenue Fund)
GENERAL LIABILITY:
The Ballpark Omnibus Financing and Revenue Act of 2004 requires that a Ballpark Fee must be
paid by certain businesses on June 15th of every District fiscal year until the bonds issued to
build the ballpark are re-paid. To determine if a business is subject to the Ballpark Fee, that
business must compute its annual District gross receipts for the most recent taxable year ending
before June 15th.
The persons subject to the Ballpark Fee are persons that have income of $5,000,000 or more in
annual District gross receipts and either are subject to filing franchise tax returns (whether
Corporate or Unincorporated) or are employers required to make unemployment insurance
contributions.
An entity granted an exemption from the DC Franchise Tax pursuant to DC Code § 47-1802.01,
is not subject to the Ballpark Fee, unless it has unrelated business taxable income. A tax
exempt entity with unrelated business taxable income must pay the Ballpark Fee if $5,000,000
or more of its annual DC Gross Receipts are attributable to any unrelated business taxable
income for its most recent calendar or fiscal year.
D.C. Code Citation: Title 47, Chapter 27B
PRESENT RATE: (January 1, 2016)
BALLPARK FEE SCHEDULE
DC Gross Receipts
Ballpark Fee
Less than $ 5,000,000
$ 5,000,000 to $ 8,000,000
$ 8,000,001 to $12,000,000
$12,000,001 to $16,000,000
$16,000,001 and greater
$0
$5,500
$10,800
$14,000
$16,500
REVENUE:
Fiscal Year
Revenue
2015
$34,942,000
2016 (Estimate)
$31,800,000
2017 (Estimate)
$32,754,000
34
HEALTHCARE PROVIDER TAX
(Transferred to Nursing Facility Quality of Care Fund)
The Healthcare Provider Tax imposes a 6% tax on the District’s nursing homes (tax is per
annum of net resident revenue) in monthly installments. All of the funds raised are designated
to go to the Nursing Facility Quality of Care Fund.
D.C. Code Citation: Title 47, Chapter 12C
REVENUE:
Fiscal Year
Revenue
2015
$12,854,240
2016 (Estimate)
$14,591,396
2017 (Estimate)
$14,883,224
ICF-IDD ASSESSMENT (Transferred to Stevie Sellows Quality Improvement Fund)
Each intermediate care facility for individuals with intellectual or developmental disabilities (ICF-
IDD) in DC must pay an assessment of 5.5% of gross revenue in quarterly installments. All
assessments shall be transferred to the Stevie Sellows Quality Improvement Fund which is used
to fund quality of care improvements at ICF-IDDs.
D.C. Code Citation: Title 47, Chapter 12D
REVENUE:
Fiscal Year
Revenue
2015
$5,032,000
2016 (Estimate)
$5,477,809
2017 (Estimate)
$5,519,000
MEDICAID HOSPITAL INPATIENT RATE SUPPLEMENT
(Transferred to Hospital Fund)
Hospitals in the District are charged a 0.52% fee based on the hospital’s inpatient net patient
revenue. The fee is in effect for the fiscal year beginning October 1, 2016. It sunsets
September 30, 2016. The revenue collected is deposited in the Hospital Fund.
D.C. Code Citation: Title 44, Chapter 6D
REVENUE:
Fiscal Year
Revenue
2015
-
2016 (Estimate)
$10,400,000
2017 (Estimate)
-
35
MEDICAID HOSPITAL OUTPATIENT SUPPLEMENTAL PAYMENT
(Transferred to Hospital Provider Fee Fund)
Hospitals in the District are charged a 0.16% fee based on the hospital’s outpatient gross
patient revenue. The fee is in effect for the fiscal year beginning October 1, 2016. It sunsets
September 30, 2016. The revenue collected is deposited in the Hospital Provider Fee Fund.
D.C. Code Citation: Title 44, Chapter 6C
REVENUE:
Fiscal Year
Revenue
2015
-
2016 (Estimate)
$6,700,000
2017 (Estimate)
-
36
NON-TAX REVENUE AND LOTTERY
NON-TAX REVENUE
GENERAL LIABILITY:
Local non-tax revenue refers to fines, fees, and other charges that flow into the District of
Columbia’s general fund. These revenues are categorized into four major categories; licenses
and permits, fines and forfeitures, charges for services, and miscellaneous revenues, which
includes interest income, unclaimed property, payment in lieu of taxes, and other revenue
sources.
REVENUE:
Fiscal Year
Revenue
2015
$416,556,860
2016 (Estimate)
$422,082,000
2017 (Estimate)
$422,779,000
LOTTERY
GENERAL LIABILITY:
Every year, the District of Columbia Lottery and Charitable Games Control Board transfers the
net proceeds of receipts from lottery gaming to the General Fund. The proceeds are equal to
gross receipts net of payouts and administrative costs. The transfer is based primarily on ticket
sales and prize payout. Games included as part of the DC Lottery are DC 3, DC 4, DC 5,
Race2Riches, DC Fast Play, Lucky for Life, Powerball, Mega Millions, Hot Lotto, DC Scratchers,
DC Keno, and Tap-N-Play.
REVENUE:
Fiscal Year
Revenue
2015
$55,586,000
2016 (Estimate)
$55,000,000
2017 (Estimate)
$55,500,000
37
SPECIAL PURPOSE NON-TAX REVENUE
GENERAL LIABILITY:
Special purpose non-tax revenues, often times referred to as “Other” or “O-Type” revenues, are
funds generated from fees, fines, assessments or reimbursements that are dedicated to the
District agency that collects the revenues to cover the cost of performing the function. The
“dedication” of the revenue to the collecting agency is what distinguishes this revenue from the
general-purpose non-tax revenues. The legislation that creates the fee, fine or assessment
must stipulate its purpose-designation and must also state whether any unspent funds are to
retain designation at the conclusion of the fiscal year or revert to general-purpose funds.
Unspent revenue in certain funds cannot revert to general purpose funds.
REVENUE:
Fiscal Year
Revenue
2015
$524,825,811
2016 (Estimate)
$524,376,035
2017 (Estimate)
$537,853,866
38
PART III -- SELECTED D.C. TAX STATISTICS
39
TABLE 3
D.C. TAX REVENUE
Budgetary Basis
(In Thousands of Nominal Dollars)
FISCAL
YEAR
TOTAL
COLLECTIONS
INCOME
TAXES /1
PROPERTY
TAXES /2
EXCISE AND
SALES AND
USE TAXES /3
GROSS
RECEIPTS
TAXES /4
OTHER
TAXES
/5
1993
2,557,852
730,519
1,011,663
504,735 a
229,593
a
81,342
1994
2,470,053
800,868
811,009
557,474 a
243,199
b
57,503
1995
2,391,041
804,355
730,343
584,107 a
210,912
c
61,324
1996
2,434,196
843,553
701,635
562,066 a
234,957
a
91,985
1997
2,522,304
936,980
687,599
573,105 a
229,242
a
95,378
1998
2,807,659
1,083,102
695,440
652,598 a
236,637
a
139,882
1999
2,879,765
1,169,751
679,550
675,841 a
207,290
147,333
2000
3,116,477
1,338,564
692,781
731,511
212,011
141,610
2001
3,293,608
1,400,237
707,423
761,474 a
233,740
190,734
2002
3,228,804
1,160,424
803,389
750,059
231,786
283,146
2003
3,384,087
1,167,452
901,888
780,207
261,348
273,192
2004
3,804,572
1,299,009
1,027,976
826,169
271,897
379,521
2005
4,249,024
1,472,432
1,148,333
956,767
294,665
d
376,827
2006
4,516,332
1,591,483
1,241,515
1,004,470
288,322
e
390,542
2007
5,154,830
1,736,361
1,548,331
1,056,780
315,160
e
498,198
2008
5,324,683
1,755,894
1,760,356
1,107,631
310,680
e
390,122
2009
5,052,140
1,478,068
1,924,468
1,072,353
315,341
e
261,910
2010
5,005,153
1,434,131
1,907,755
1,075,730
322,578
f
264,959
2011
5,325,261
1,656,282
1,800,745
1,127,502
342,316
g
398,416
2012
5,861,807
1,956,590
1,910,254
1,218,577
360,874
g
415,512
2013
6,100,486
2,094,179
2,003,088
1,246,803
343,891
g
412,525
2014
6,297,282
2,094,754
2,104,171
1,281,998
385,182
g
431,177
2015
6,916,841
2,315,842
2,287,847
1,424,894
359,392
h
528,866
/1 Income Taxes: Includes Individual Income, Corporation Franchise, and Unincorporated Business Franchise taxes.
/2 Property Taxes: Includes Real Property, Personal Property, and Public Space Rental taxes.
/3 Excise and Sales and Use Taxes: Includes General Sales and Use Taxes; Alcoholic Beverage, Cigarette, and Motor Vehicle Excise
taxes; and Motor Vehicle Fuel tax.
a/ Also includes Hotel Occupancy tax.
/4 Gross Receipts Taxes: Includes Public Utility, Toll Telecommunications, and Insurance Premiums taxes.
a/ Also includes Health Care Provider tax.
b/ Also includes Health Care Provider tax and Public Safety fee.
c/ Also includes Health Care Provider tax and Arena fee.
d/ Also includes Baseball Gross Receipts tax.
e/ Also includes Baseball Gross Receipts tax and Healthcare Provider tax.
f/ Also includes Baseball Gross Receipts tax, Healthcare Provider tax, and Hospital and Medical Services Corporation (HMSC)
contribution.
g/ Also includes Baseball Gross Receipts tax, Healthcare Provider tax, HMSC contribution, Hospital Bed tax, and Intermediate Care
Facility for Individuals with Intellectual or Developmental Disabilities (ICF-IDD) assessment.
h/ Also includes Baseball Gross Receipts tax, Healthcare Provider tax, and Intermediate Care Facility for Individuals with Intellectual or
Developmental Disabilities (ICF-IDD) assessment.
/5 Other Taxes: Includes Estate, Deed Recordation, Deed Transfer, and Economic Interest taxes.
Source: Government of the District of Columbia Comprehensive Annual Financial Report (various years)
40
TABLE 4
2013 D.C. INCOME TAX DISTRIBUTION
ADJUSTED
GROSS INCOME
CLASS
NO. OF
RETURNS
PERCENT
1/
ADJUSTED
GROSS
INCOME
AMOUNT
PERCENT
1/
NET TAXABLE
INCOME
AMOUNT
PERCENT
1/
RETURNS WITH ITEMIZED DEDUCTIONS
Less than $0
1,487
1.2%
0
0.0%
0
0.0%
$0 - $9,999
2,503
2.0%
13,151,471
0.1%
-16,129,858
-0.1%
$10,000 -$19,999
4,778
3.8%
74,164,868
0.5%
11,689,081
0.1%
$20,000 -$29,999
7,549
6.0%
191,116,925
1.2%
76,902,347
0.6%
$30,000 -$39,999
8,770
7.0%
307,946,992
1.9%
177,859,074
1.3%
$40,000 -$49,999
9,126
7.2%
409,967,253
2.6%
254,027,278
1.9%
$50,000 and Over
91,941
72.9%
14,953,566,878
93.8%
13,083,084,629
96.3%
Total
126,154
100.0%
15,949,914,387
100.0%
13,587,432,551
100.0%
RETURNS WITH STANDARD DEDUCTIONS
Less than $0
5,880
2.9%
0
0.0%
0
0.0%
$0 - $9,999
38,737
19.0%
213,812,882
3.3%
-14,027,872
-0.3%
$10,000 -$19,999
42,861
21.0%
633,732,173
9.8%
320,857,286
6.3%
$20,000 -$29,999
31,368
15.4%
775,959,855
12.0%
551,070,800
10.8%
$30,000 -$39,999
24,600
12.1%
857,226,646
13.3%
685,569,494
13.4%
$40,000 -$49,999
20,077
9.8%
898,710,201
13.9%
767,193,528
15.0%
$50,000 and Over
40,603
19.9%
3,071,534,458
47.6%
2,805,607,684
54.8%
Total
204,126
100.0%
6,450,976,215
100.0%
5,116,270,920
100.0%
1/ Detail may not add to total due to rounding.
41
TABLE 5
DISTRICT OF COLUMBIA REAL PROPERTY ASSESSMENTS - TAXABLE, EXEMPT AND TOTALS
TAX YEAR 2015
Type of Property
Total
Acres
Land
Value
Improvements
Total
Value
Gross Tax
Liability 1/
% of All
Properties
Number of
Properties
Land
Acres
Total
Value
Total Taxable
13,047
72,406,067,704
109,377,752,282
181,783,819,986
2,339,193,332
44.1
66.2
188,543
Class One
10,694
42,659,912,747
58,853,329,755
101,513,242,502
862,862,561
36.1
36.9
178,865
Residential/Single
Family
8,830
34,958,594,997
43,335,357,671
78,293,952,668
665,498,598
29.8
28.5
163,533
Homestead
6,117
24,677,190,758
29,272,772,347
53,949,963,105
458,574,686
20.7
19.6
95,972
Non-seniors
4,785
20,434,379,058
25,585,689,897
46,020,068,955
391,170,586
16.2
16.7
76,781
Seniors
1,332
4,242,811,700
3,687,082,450
7,929,894,150
67,404,100
4.5
2.9
19,191
Non-Homestead
2,713
10,281,404,239
14,062,585,324
24,343,989,563
206,923,911
9.2
8.9
67,561
Residential/
Multifamily
1,864
7,701,317,750
15,517,972,084
23,219,289,834
197,363,964
6.3
8.5
15,332
Class Two
2,273
29,533,200,777
50,376,926,342
79,910,127,119
1,457,032,099
7.7
29.1
8,583
Large Office
Buildings
394
17,926,710,575
38,637,194,507
56,563,905,082
1,042,325,044
1.3
20.6
614
Hotels/Motels
97
2,216,429,302
4,102,427,857
6,318,857,159
115,841,571
0.3
2.3
149
Other Commercial
1,782
9,390,060,900
7,637,303,978
17,027,364,878
298,865,484
6.0
6.2
7,820
Class Three
71
197,008,600
137,918,705
334,927,305
16,746,365
0.2
0.1
991
Class Four
8
15,945,580
9,577,480
25,523,060
2,552,306
0.0
0.0
104
Total Exempt
16,563
56,771,444,602
36,212,519,722
92,983,964,324
1,592,075,472
55.9
33.8
12,511
Total US/DC
Government
12,651
42,289,522,046
18,666,954,569
60,956,476,615
1,066,859,991
42.7
22.2
5,264
United States
10,499
34,918,322,401
12,598,299,381
47,516,621,782
850,931,521
35.5
17.3
2,783
District of
Columbia
2,153
7,371,199,645
6,068,655,188
13,439,854,833
215,928,470
7.3
4.9
2,481
Total Non-US/DC
Exempt
3,912
14,481,922,556
17,545,565,153
32,027,487,709
525,215,482
13.2
11.7
7,247
Low-Income
71
173,634,830
222,888,720
396,523,550
3,408,528
0.2
0.1
1,674
Religious
584
2,100,637,855
1,736,213,407
3,836,851,262
66,237,886
2.0
1.4
1,158
Educational
741
3,503,333,184
3,141,453,610
6,644,786,794
119,730,209
2.5
2.4
472
Charitable
161
481,397,004
606,385,150
1,087,782,154
15,564,101
0.5
0.4
462
Hospitals
90
239,477,380
617,623,330
857,100,710
15,790,363
0.3
0.3
11
Libraries
1
13,375,960
10,645,040
24,021,000
438,389
0.0
0.0
1
Foreign
Governments
294
1,351,063,760
1,905,904,650
3,256,968,410
48,995,617
1.0
1.2
600
Cemeteries
346
331,918,850
20,855,590
352,774,440
6,415,500
1.2
0.1
24
Miscellaneous
541
3,308,643,585
5,373,539,997
8,682,183,582
133,318,478
1.8
3.2
2,138
WMATA
198
430,165,518
115,457,150
545,622,668
6,231
0.7
0.2
393
Partially Exempt
883
2,548,274,630
3,794,598,509
6,342,873,139
115,310,180
3.0
2.3
314
Total Taxable &
Exempt 2/ 3/
29,610
129,177,512,306
145,590,272,004
274,767,784,310
3,931,268,804
100.0
100.0
201,054
1/ Gross tax revenue does not include eligible tax abatements, credits, exemptions, real property account adjustments or refunds.
2/ Detail may not add to total due to rounding.
3/ The data in this table represent approximately 46 square miles of land area. The District of Columbia has a total of approximately 69 square miles of
total land area including 7 square miles of water area and 16 miles of highways, streets, roads, and alleys.
42
PART IV -- HISTORY OF MAJOR CHANGES IN D.C. TAX STRUCTURE,
FY 1970 TO FY 2016
43
HISTORY OF MAJOR CHANGES IN THE DISTRICT OF COLUMBIA TAX STRUCTURE
FISCAL YEAR 1970 – FISCAL YEAR 2016
FISCAL
YEAR
OF
ENACTMENT
FISCAL
YEAR
EFFECTIVE
CHANGE
FULL YEAR
REVENUE
EFFECT AT
TIME OF
CHANGE 1/
ALCOHOLIC BEVERAGES:
Beer
1970
1970
Rate increased 25¢/barrel to $2.25/barrel
+$
150,000
1989
1989
Rate increased 54¢/barrel to $2.79/barrel
+$
250,000
Sparkling Wine
1989
1989
Rate decreased 5¢/gal to 40¢/gal
-$
25,000
1990
1990
Rate increased 5¢/gal to 45¢/gal
+$
20,000
Spirits
1970
1970
Rate increased 25¢/gal to $2.00/gal
+$
1,500,000
1978
1978
Rate decreased 50¢/gal to $1.50/gal
-$
1,800,000
Wine (14% or Less Alcohol)
1989
1989
Rate increased 25¢/gal to 40¢/gal
+$
750,000
1990
1990
Rate decreased 10¢/gal to 30¢/gal
-$
300,000
(More than 14% Alcohol)
1989
1989
Rate increased 7¢/gal to 40¢/gal
+$
25,000
CIGARETTES
1970
Rate increased from 3¢/pk to 4¢/pk
+$
1,050,000
1973
1973
Rate increased from 4¢/pk to 6¢/pk
+$
1,800,000
1976
1976
Rate increased from 6¢/pk to 10¢/pk
+$
2,600,000
1977
1977
Rate increased from 10¢/pk to 13¢/pk
+$
2,400,000
1987
1987
Rate increased from 13¢/pk to 17¢/pk
(April 1987)
+$
1,200,000
1991
1992
Rate increased from 17¢/pk to 30¢/pk
(April 1991)
+$
5,200,000
1992
1992
Rate increased from 30¢/pk to 50¢/pk
(April 1992)
+$
4,500,000
1993
1993
Rate increased from 50¢/pk to 65¢/pk
(July 1993)
+$
4,500,000
2002
2003
Rate increased from 65¢/pk to $1.00/pk
(January 2003)
+$
5,800,000
2008
2009
Rate increased from $1.00/pk to $2.00/pk
(October 2008)
+$
12,530,000
2009
2010
Rate increased from $2.00/pk to $2.50/pk
(October 2009)
+$
10,215,000
2012
2012
Rate increased from $2.50 to $2.86/pk
(October 2011)
+$
1,080,000
44
HISTORY OF MAJOR CHANGES IN THE DISTRICT OF COLUMBIA TAX STRUCTURE
FISCAL YEAR 1970 – FISCAL YEAR 2016
FISCAL
YEAR OF
ENACTMENT
FISCAL
YEAR
EFFECTIVE
CHANGE
FULL YEAR
REVENUE
EFFECT AT
TIME OF
CHANGE 1/
DEED RECORDATION AND TRANSFER
Recordation
1976
1976
Rate increased from 0.5% to 1.0% of
consideration.
+$
1,200,000
1978
1978
An excise tax is imposed on the transferrers of
residential real property containing 4 or fewer
dwelling units at rates ranging from 3% to 97%
of gain.
---
1978
1978
Excise tax on transferrers of residential real
property expired.
---
1980
1980
Tax base expanded to include construction loan
deeds of trust on mortgages, permanent loan
deeds of trust on mortgages and purchase
mortgages.
+$
1,000,000
1989
1989
Rate increased from 1.0% to 1.1% of
consideration.
+$
4,000,000
1989
1990
Established recordation tax on transfers of
economic interests at the rate of 2.2%.
+$
5,500,000
1994
1994
Expand recordation tax base to security interest
(June 1994).
+$
1,800,000
2002
2003
Rate increased from 1.1% to 1.5% 7/
+$
16,722,000
2002
2003
15% of the District’s real estate recordation
taxes will be deposited in the Housing
Production Trust Fund to provide financial
assistance for housing available to low and
moderate-income families and individuals.
-$
2,529,000
2004
2005
Rate decreased from 1.5% to 1.1%.
-$
53,862,000
2006
2007
Rate increased from 1.1% to 1.45% 11/
+$
43,472,000
2006
2007
40% of the revenue generated by increasing the
deed recordation tax to 1.45% will be deposited
in the Comprehensive Housing Strategy Fund to
provide housing assistance to low- and
moderate-income households.
$
---
2008
2009
The dedication of revenue to the
Comprehensive Housing Strategy Fund was
repealed.
$
---
45
HISTORY OF MAJOR CHANGES IN THE DISTRICT OF COLUMBIA TAX STRUCTURE
FISCAL YEAR 1970 – FISCAL YEAR 2016
FISCAL
YEAR OF
ENACTMENT
FISCAL
YEAR
EFFECTIVE
CHANGE
FULL YEAR
REVENUE
EFFECT AT
TIME OF
CHANGE 1/
DEED RECORDATION AND TRANSFER-continued:
Transfer
1980
1980
A transfer tax is imposed on each transfer of real
property at the rate of 1.0% of the consideration
paid.
+$
12,000,000
1989
1989
Rate increased from 1.0% to 1.1% of
consideration.
+$
3,300,000
2000
2000
Clarifies that the transfer tax will be based on the
sales price of real property.
---
2002
2003
Rate increased from 1.1% to 1.5%. 7/
+$
11,072,000
2002
2003
15% of the District’s real estate transfer taxes
will be deposited in the Housing Production
Trust Fund to provide financial assistance for
housing available to low and moderate-income
families and individuals.
-$
2,471,000
2004
2005
Rate decreased from 1.5% to 1.1%.
-$
35,663,000
2006
2007
Rate increased from 1.1% to 1.45% 11/
+$
26,643,000
2006
2007
40% of the difference between the 1.1% and the
1.45% increase in the District’s real estate
transfer taxes will be deposited in the Comp.
Housing Strategy Fund to provide financial
assistance for housing available to low and
moderate-income families and individuals.
-$
9,558,000
ECONOMIC INTEREST
1989
1990
A recordation tax of 2.2% is imposed on
transfers of economic interest occurring on or
after October 1, 1989
+$
1,525,000
2008
2009
Rate increased from 2.2% to 2.9%
+$
8,000,000
FINANCIAL INSTITUTIONS
Banks and Building Association Gross Earnings
1976
1976
Rate on banks increased from 4% to 6%; rate on
building associations increased from 2% to 3%.
+$
5,600,000
1977
1977
Rate on building associations decreased from
3% to 2%.
-$
2,500,000
1980
1981
Financial institutions added to corporation
franchise base/gross earning tax phased out. 2/
+$
3,569,000
HEALTH EXCHANGE ASSESSMENT:
2014
2015
Assess health insurance carriers at a rate just
under 1 percent to cover FY 2015 operating
expenses.
+$
28,751,244
46
HISTORY OF MAJOR CHANGES IN THE DISTRICT OF COLUMBIA TAX STRUCTURE
FISCAL YEAR 1970 – FISCAL YEAR 2016
FISCAL
YEAR OF
ENACTMENT
FISCAL
YEAR
EFFECTIVE
CHANGE
FULL YEAR
REVENUE
EFFECT AT
TIME OF
CHANGE 1/
INCOME TAXES:
Individual Income: 3/
1970
1970
New rates and brackets:
From % 2 3 4 5 6
$000 1 2 2 5 over 10
To % 2 3 4 5 6 7 8 9 10
$000 1 1 1 2 3 4 5 8 over 25
1975
1976
Income tax credit for excess property taxes paid
by low income persons.
1976
1976
Personal exemptions and child care deduction
conformed to federal law.
+$
1,500,000
New rates and brackets
% 2 3 4 5 6 7 8 9 10 11
$000 1 1 1 1 1 5 3 4 8 over 25
+$
14,900,000
1977
1977
Income tax credit for excess property taxes paid:
a) Over 62, blind, disabled-income limit
$20,000-credit limit $750
b) Under 62-income limit $7,000-credit limit
$320.
-$
3,917,000
1978
1978
Income tax credit for excess property taxes paid:
a) Over 62, blind, disabled-income limit
$20,000-credit limit $750
b) Under 62-income limit $10,000-credit limit
$400.
-$
2,309,000
1978
1979
Income tax credit for excess property taxes
raised to $750 and income cap raised to
$20,000 for claimants under age 62 who are not
blind or disabled.
-$
1,000,000
1980
1980
Installment dates for payments and declarations
of estimated tax changed from July 15
th
to June
15
th
and from October 15
th
to September 15
th
.
+$
2,500,000
1982
1982
Conformity to federal income tax law with certain
modifications.
-$
6,200,000
1982
1983
Conformity to federal law on medical and dental
expenses, and casualty losses.
+$
3,015,000
1987
1987
Require seizure of individual income tax refunds
of the University of the District of Columbia
adjudicated student loan defaulters.
---
47
HISTORY OF MAJOR CHANGES IN THE DISTRICT OF COLUMBIA TAX STRUCTURE
FISCAL YEAR 1970 – FISCAL YEAR 2016
FISCAL
YEAR OF
ENACTMENT
CHANGE
FULL YEAR REVENUE EFFECT AT TIME OF CHANGE 1/
(MILLIONS OF DOLLARS)
FY
87
FY
88
FY
89
FY
90
FY
91
FY
92
FY
93
FY
94
FY
95
INCOME TAXES-continued:
Individual Income-continued:
1987
1987 new rates and brackets
% 6 8 10
$000 10 10 over 20 for CY 1987
% 6 8 9.5 for CY 1988
$000 10 10 over 20 and subsequent
years
2.9
17.7
19.9
23.0
26.0
1987
Increased personal exemption to $885 for
1987;
$1,025 for 1988;
$1,160 for 1989;
$1,270 for 1990; and
$1,370 for 1991 and subsequent calendar
years
-7.6
-11.9
-
17.7
-
22.5
-26.8
1987
Increased standard deduction from $1,000 to
$2,000.
-10.0
-10.0
-
10.0
-
10.0
-10.0
1987
Retain $3,000 exclusion for certain retirees.
-5.0
-5.0
-5.0
-5.0
-5.0
1987
Established low-income credit.
-2.0
-1.0
-1.0
-1.0
-1.0
1989
Repealed Political Contribution Credit
---
---
0.2
1.0
1.0
1.0
1.0
1.0
1.0
Required same deduction method used
when filing federal return.
---
---
1.5
3.0
3.0
3.0
3.0
3.0
3.0
Begin taxation of lottery winnings.
---
---
0.5
1.0
1.0
1.0
1.0
1.0
1.0
FY 00
FY 01
FY 02
FY 03
FY 04
1999
Tax Parity Act of 1999 (estimates assume full
enactment)
21.2
56.2
77.2
99.9
148.7
REDUCED TAX RATES AS FOLLOWS:
Lowest Rate: $0 - $10,000 (currently 6.0%)
5.0%
5.0%
5.0%
4.5%
4.0%
Middle Rate: $10,001 - $20,000 (currently
8.0%)
7.5%
$10-$30K
7.5%
$10-$30K
7.0%
$10-
$40K
7.0%
$10-$40K
6.0%
$10-$40K
Top Rate 4/: Over $20,000 (currently 9.5%)
9.5%
9.3%
9.0%
8.7%
8.5%
Top Bracket
$20K
$30K
$30K
$40K
$40K
48
HISTORY OF MAJOR CHANGES IN THE DISTRICT OF COLUMBIA TAX STRUCTURE
FISCAL YEAR 1970 – FISCAL YEAR 2016
FISCAL YEAR
OF
ENACTMENT
FISCAL
YEAR
EFFECTIVE
CHANGE
FULL YEAR
REVENUE
EFFECT AT
TIME OF
CHANGE 1/
INCOME TAXES-Individual Income continued:
2003
Tax Parity Act of 1999 Suspended
---
2000
2001
Earned Income Tax Credit:
Tax Year 2001 – 10% of federal credit
Tax Year 2002 – 25% of federal credit
-$
18,711,000
2004
2005
Top rate decrease from 9.3% to 9.0%
-$
24,000,000
2005
2005
Long-term care insurance premiums paid after
04/11/05, total deduction amount limited to $500.
-$
146,475
2006
2006
Lowest, middle and top rates decrease from 5.0% to
4.5%, 7.5% to 7.0%, and 9.0% to 8.7%,
respectively. The middle rate range increased from
$30,000 to $40,000 and the top rate will begin at
$40,001.
-$
53,000,000
2006
2006
Expansion of EITC to non-custodial parents
-$
3,000,000
2006
2006
Raise standard deduction from $2,000 to $2,500
and personal exemptions from $1,370 to $1,500 and
conform with IRS extension of time to file return from
August to October.
-$
6,900,000
2006
2006
Increase EITC match from 25% to 35% of federal
credit
-$
7,100,000
2006
2007
Lowest, middle and top rates decrease from 4.5% to
4.0%, 7.0% to 6.0%, and 8.7% to 8.5%, respectively
-$
64,000,000
2007
2008
Raise standard deduction from $2,500 to $4,000
and personal exemptions from $1,500 to $1,675.
-$
17,084,000
2007
2008
Expansion of first-time homebuyer credit to all DC
Government employees.
-$
700,000
2007
2008
Domestic partners may file either a joint return or file
separately on the DC Individual tax return.
---
2009
2009
Increase EITC match from 35% to 40% of federal
credit
-$
1,870,000
2009
2010
Delay implementation of standard deduction
indexing through FY2013.
+$
2,900,000
2009
2010
Delay implementation of personal exemption
indexing through FY2013.
+$
2,300,000
2011
2012
Added a new bracket at 8.95% for DC Adjusted
Gross Income in excess of $350,000.
+$
17,300,000
2011
2012
Exempt outstanding out of state bonds purchased
before January 1, 2012.
-$
13,400,000
49
HISTORY OF MAJOR CHANGES IN THE DISTRICT OF COLUMBIA TAX STRUCTURE
FISCAL YEAR 1970 – FISCAL YEAR 2016
FISCAL YEAR
OF
ENACTMENT
FISCAL
YEAR
EFFECTIVE
CHANGE
FULL YEAR
REVENUE
EFFECT AT
TIME OF
CHANGE 1/
INCOME TAXES-Individual Income continued:
2012
2012
Itemized deductions limited – filers with DC AGI over
$200,000 ($100,000 for married filing separately) would
be required to reduce itemized deductions by 5%.
Deductions relating to medical and dental expenses,
investment interest deductions, and casualty or theft
losses are excluded.
+$
16,720,000
2012
2014
Change eligibility requirements and calculation
methodology for the Schedule H credit by: increasing
maximum credit to $1,000; allowing annual cost of living
adjustments; increasing the property tax equivalent of
rent to 20% of annual rent paid; basing calculation of
credit on FAGI of a tax filing unit; allowing one Sch. H
filer per year for each tax filing unit, no matter how many
share same household; increasing household income,
simplifying credit calculation; and eliminating alternative
brackets for the elderly, blind, and disabled.
-$
10,937,383
2013
2013
Raise standard deduction married filing joint filers from
$4,000 to $4,100 and married filing separate filers from
$2,000 to $2,050.
-$
17,084,000
2014
2015
Reduce marginal tax rate on income between $40,000
and $60,000 from 8.5% to 7.0%.
-$
37,518,000
2014
2015
Expand Schedule H Credit for Seniors aged 70+
-$
2,023,000
2014
2016
Keep marginal tax rate on incomes above $350,000 at
the current statutory rate of 8.95%.
+$
18,773,000**
2014
2016
Expand Earned Income Tax Credit for childless workers.
-$
10,834,000**
2014
2016
Raise the standard deduction to $5,200 for
singles/married filing separately, $8,350 for married and
$6,500 for Head of Household.
-$
15,618,000**
2014
2016
Phase Out Personal Exemptions by 2% for each $2,500
above $150,000, with complete phase out at $275,000.
+$
4,718,000**
2015
2016*
Reduce marginal tax rate on income between $40,000
and $60,000 from 7.0% to 6.5%.
-$
14,232,000**
2015
2016*
Added a new bracket at 8.95% marginal tax rate on
income above $1,000,000. Reduce marginal tax rate on
income above $350,000 and less than $1,000,000 from
8.95% to 8.75%.
-$
4,734,000**
2015
2016*
Eliminate exclusions for part-year residents and business
and fiduciary income in determining the low income tax
credit
+$
457,000**
2015
2016
Increase statute of limitations on audits
+$
2,000,000**
*Effective Tax Year 2016
50
HISTORY OF MAJOR CHANGES IN THE DISTRICT OF COLUMBIA TAX STRUCTURE
FISCAL YEAR 1970 – FISCAL YEAR 2016
FISCAL YEAR
OF
ENACTMENT
FISCAL
YEAR
EFFECTIVE
CHANGE
FULL YEAR
REVENUE
EFFECT AT
TIME OF
CHANGE 1/
INCOME TAXES-continued:
Corporation and Unincorporated
1970
1970
$25 minimum tax and quarterly declaration payment
requirements.
+$
2,500,000
1972
1972
Rate increased to 7%.
+$
3,000,000
1974
1974
Rate increased to 8%.
+$
3,000,000
1976
1976
Professionals added to unincorporated business
franchise tax base at 12% rate with new exemption and
salary allowance amounts (gross amount before
individual income tax impact).
+$
8,250,000
1976
1976
Permanent corporate and unincorporated business tax
rate increase from 8% to 9%.
+$
3,675,000
1976
1976
Temporary increase for calendar year 1975 from 9% to
12%.
+$
11,025,000
1976
1976
Require professional corporations to file as
unincorporated business.
+$
1,250,000
1976
1976
10% surtax imposed; effective rate for fiscal year 1976
returns became 9.9%.
+$
6,000,000
1977
1977
Only unincorporated businesses with gross incomes in
excess of $12,000 must file a return.
-$
40,000
1978
1978
10% surtax continued indefinitely.
+$
5,600,000
1980
1980
Installment dates for payments and declarations of
estimated tax changed from July 15
th
to June 15
th
and
from October 15
th
to September 15
th
.
+$
2,500,000
1980
1980
Professionals deleted from unincorporated business
franchise tax base.
-$
10,410,000
1980
1981
Financial institutions added to corporation franchise tax
base.
+$
3,569,000
1983
1983
Minimum tax increased from $25 to $100.
+$
800,000
1984
1985
Rate increased from 9% to 10%, surtax decreased from
10% to 5% for an effective rate of 10.5%.
+$
7,000,000
1986
1986
Nondeductible expenses incurred to produce, treated as
exempt income.
+$
---
1987
1987
FY FY FY FY FY FY
87 88 89 90 91 92
Surtax decreased from 5% to 2.5%
0 -4.4 -4.8 -5.3 -5.8 ---
1987
1987
Established net operating loss.
-0.5 -5.0 -5.0 -5.0 -5.0 ---
1989
1989
Surtax increased from 2.5% to 5%.
0 4.3 4.7 5.1 --- ---
1993
1993
Surtax decreased from 5% to 2.5%, effective October 1,
1992.
-$
2,950,000
51
HISTORY OF MAJOR CHANGES IN THE DISTRICT OF COLUMBIA TAX STRUCTURE
FISCAL YEAR 1970 – FISCAL YEAR 2016
FISCAL YEAR
OF
ENACTMENT
FISCAL
YEAR
EFFECTIVE
CHANGE
FULL YEAR
REVENUE
EFFECT AT
TIME OF
CHANGE 1/
INCOME TAXES-continued:
Corporation and Unincorporated-continued:
1994
1994
Reduce franchise tax rate to 9.5%.
-$
6,400,000
1994
1995
Allow a deduction for Subpart F income.
-$
3,000,000
1994
1994
Conform to provisions of Omnibus Budget Reconciliation
Act of 1993.
+$
100,000
1994
1994
Add a 2.5% surtax to finance the Convention Center.
+$
3,143,000
1999
1999
Surtax (2.5%) financing the Convention Center shifted to
general fund. 5/
+$
6,200,000
1999
2000
Eliminate carry back of net operating losses (NOLs) and
adjust NOL provisions to reflect single-entity filing.
---
1999
2003
Reduce 9.975% rate to 9.0%.
-$
16,700,000
1999
2004
Reduce 9.0% rate to 8.5% (rate reduction impact is
cumulative).
-$
28,700,000
2002
2003
Tax Parity Act suspended, rate increased to 9.975%.
+$
17,500,000
2002
2003
Decoupling from federal bonus depreciation
+$
24,000,000
2008
2008
Reduced taxable income for certain UB taxpayers.
-$
35,000
2009
2011
Require combined reporting of income for corporate
entities.
+$
22,600,000
2011
2011
Change apportionment of business income to double-
weight the sales factor.
+$
7,230,000
2011
2011
Increase minimum tax to $250 for firms with gross
receipts up to $1 million, and $1,000 for firms with gross
receipts over $1 million.
+$
12,000,000
2014
2015
Use Single Weighted Sales Apportionment Factor.
+$
20,000,000
2014
2015
Reduce Business Income Tax Rate from 9.975% to
9.4%.
-$
20,000,000
2014
2015
Exempt entities that trade on their own accounts from
unincorporated business franchise tax.
-$
4,400,000
2016
2016
Delay FAS 109 deductions by five years for combined
reporting files.
+$
3,721,000
INHERITANCE AND ESTATE
1972
1972
Rates increased to a range of 1% - 23%, Class B merged
with Class C and exemption lowered.
-$
2,800,000
1987
1987
Inheritance Tax abolished for decedents dying on or after
April 1, 1987.
-$
15,000,000
2002
2002
DC Estate Tax is decoupled from the Federal Estate Tax,
and the filing threshold increases from $600,000 to
$675,000, on Jan. 1, 2002.
---
2003
2003
Filing threshold increases from $675,000 to $1,000,000,
effective Jan. 1, 2003.
---
2014
2016
If certain revenue triggers are met, threshold increases from
$1 million to $2 million.
-$
6,194,000
52
HISTORY OF MAJOR CHANGES IN THE DISTRICT OF COLUMBIA TAX STRUCTURE
FISCAL YEAR 1970 – FISCAL YEAR 2016
FISCAL YEAR
OF
ENACTMENT
FISCAL
YEAR
EFFECTIVE
CHANGE
FULL YEAR
REVENUE
EFFECT AT
TIME OF
CHANGE 1/
INSURANCE PREMIUMS
1977
1977
Payments dates changed. If liability is over $2,000, at
least 25% of tax must be paid in each of 3 installments
during the year taxable income is received. Remainder is
due by March 1
st
following close of calendar year.
---
1992
1993
Tax rate increased from 2% to 2.25%, effective October
1, 1992.
+$
4,000000
1999
1999
Tax rate decreased from 2.25% to 1.7%, effective
January 1, 1999.
-$
6,000,000
2006
2006
Cost of any health-care insurance premium, paid by an
employer for a non-employee domestic partner registered
with the Vital Records Division of DC Department of
Health, is excluded from the calculation of the employee
domestic partner’s District gross income.
---
2009
2009
Insurance premiums tax on health insurers increased
from 1.7% to 2.0%.
+$
1,983,000
2009
2009
Insurance premiums tax applied to HMOs for the first
time at a rate of 2.0%. 75% of the revenue was
dedicated to the Healthy D.C. Fund and the other 25%
was allocated to the general fund.
+$
9,893,000
2009
2009
Insurance premiums tax on CareFirst increased from
1.7% to 2.0%. All of the revenue is dedicated to Healthy
D.C. Fund.
+$
1,129,000
2010
2011
Insurance premiums tax rate of 2.0% is now applied to all
types of insurance, including life and property insurance.
Previously, the 2.0% percent rate had only applied to
health insurers and HMOs.
+$
4,747,000
2014
2015
Insurance premiums tax rate of 1.7% is now applied to all
types of insurance, except health insurers and HMOs.
The tax rate for health insurers and HMOs is still at 2.0%.
---
53
HISTORY OF MAJOR CHANGES IN THE DISTRICT OF COLUMBIA TAX STRUCTURE
FISCAL YEAR 1970 – FISCAL YEAR 2016
FISCAL YEAR
OF
ENACTMENT
FISCAL
YEAR
EFFECTIVE
CHANGE
FULL YEAR
REVENUE
EFFECT AT
TIME OF
CHANGE 1/
MOTOR VEHICLES:
Motor Vehicle Excise:
1970
1970
Rate increased from 3% to 4%.
+$
1,700,000
1973
1973
Rate increased from 4% to 5%.
+$
1,900,000
1976
1976
Rate increased from 5% to 6%.
+$
1,800,000
New rates and weight classes instituted
4% 2,799 lbs. or less
5% 2,800 – 3,499 lbs.
6% 3,500 – 3,999 lbs.
7% 4,000 lbs. or over
+$
550,000
1983
1983
New rates and weight classes instituted (June 1983).
6% 3,499 or less.
7% 3,500 lbs. or over
+$
2,000,000
1990
1990
Exempted taxicabs from motor vehicle excise tax and
required new residents to pay excise tax on motor
vehicles transferred into the District.
+$
700,000
1999
1999
Repeal requirement that new residents pay second
excise tax on vehicles transferred into the District. 6/
-$
12,000,000
2005
2005
New rates and weight classes instituted (June 2005).
6% 3,499 or less.
7% 3,500 lbs. – 4,999 lbs.
8% 5,000 lbs. or more
+$
2,000,000
Motor Vehicle Fuel:
1972
1972
Rate increased from 1¢/gallon to 8¢/gallon.
+$
2,400,000
1976
1976
Rate increased from 8¢/gallon to 10¢/gallon.
+$
4,825,000
1980
1980
Rate increased from 10¢/gallon to 11¢/gallon.
+$
1,512,000
1980
1981
Rate increased from 11¢/gallon to 13¢/gallon (June
1981).
+$
3,024,000
1980
1982
The gasoline excise tax rate becomes indexed to the
consumer price index for all urban consumers (CPI-U).
---
1982
1982
Rate increased from 13¢/gallon to 14¢/gallon after
indexing (June 1982).
+$
1,600,000
1983
1983
Rate increased from 14¢/gallon to 14.8¢/gallon.
+$
1,300,000
1984
1984
Rate increased from 14.8¢/gallon to 15.5¢/gallon.
+$
1,100,000
1985
1985
Rate set at 15.5¢/gallon (June 1985), indexing repealed.
-$
1,700,000
54
HISTORY OF MAJOR CHANGES IN THE DISTRICT OF COLUMBIA TAX STRUCTURE
FISCAL YEAR 1970 – FISCAL YEAR 2016
FISCAL YEAR
OF
ENACTMENT
FISCAL
YEAR
EFFECTIVE
CHANGE
FULL YEAR
REVENUE
EFFECT AT
TIME OF
CHANGE 1/
MOTOR VEHICLES-continued:
Motor Vehicle Fuel-continued
1989
1989
Rate increased from 15.5¢/gallon to 18¢/gallon (June
1989).
+$
4,000,000
1992
1993
Rate increased from 18¢/gallon to 20¢/gallon (October
1992).
+$
3,300,000
1994
1994
Temporary rate increase (4 months) from 20¢/gallon to
22.5¢/gallon (June 1994).
+$
1,300,000
2009
2010
Rate increased from 20¢/gallon to 23.5¢/gallon (October
2009).
+$
3,500,000
2013
2014
Replace the 23.5 cent per gallon excise tax on motor fuel
with an ad valorem tax of 8.0% of the wholesale price.
Proposed floor of $2.94 allows D.C. to collect at least the
projected revenue of current motor fuel excise tax.
---
Motor Vehicle Registration:
1970
1970
Rate increased:
Less than 3,500 lbs. from $22.50 to $30.00
More than 3,499 lbs. from $32.50 to $50.00
Rate on other vehicles increased by ⅓.
+$
3,300,000
1976
1976
New rates and weight classes instituted
$50 2,800 lbs. or less
$57 2,801 – 3,499 lbs.
$83 3,500 – 3,999 lbs.
$96 4,000 lbs. and over
Rates on other vehicles increased by ⅓.
+$
3,850,000
1977
1977
New rates instituted
$35 2,800 lbs. or less
$42 2,801 – 3,499 lbs.
$68 3,500 – 3,999 lbs.
$76 4,000 lbs. and over
-$
3,900,000
1983
1983
New rates and weight classes instituted
$45 3,499 lbs. or less
$78 3,500 lbs. and over
+$
1,400,000
1991
1991
New rates instituted
$55 3,499 lbs. or less
$88 3,500 lbs. and over
+$
3,000,000
2003
2003
New rates instituted
$72 3,499 lbs. or less
$115 3,500 lbs. and over
+$
10,900,000
2004
2005
New rates and weight classes instituted
$72 for 3,499 lbs. or less
$115 for 3,500 – 4,999 lbs.
$155 for 5,000 lbs. and over
$36 for clean fuel or electric vehicle
+$
2,800,000
55
HISTORY OF MAJOR CHANGES IN THE DISTRICT OF COLUMBIA TAX STRUCTURE
FISCAL YEAR 1970 – FISCAL YEAR 2016
FISCAL YEAR
OF
ENACTMENT
FISCAL
YEAR
EFFECTIVE
CHANGE
FULL YEAR
REVENUE
EFFECT AT
TIME OF
CHANGE 1/
PROPERTY TAXES:
Personal Property
1970
1970
Rate increased 10¢/$100 assessed value $2.40/$100
+$
700,000
1973
1973
Phase-out of tax applicable to business inventories
FY 1973 ⅔ rate applies
FY 1974 ⅓ rate applies
FY 1975 phase-out completed
-$
-$
-$
2,600,000
5,300,000
8,500,000
1976
1977
Rate increased 42¢/$100 of assessed value to
$2.82/$100.
+$
2,300,000
1977
1977
Payment due with return-July 31
st
.
---
1980
1980
Rate increased 28¢/$100 of assessed value to
$3.10/$100.
+$
2,200,000
1987
1987
Created a retroactive personal property tax credit to all
telecommunication providers.
---
1992
1992
Rate increased 30¢/$100 of assessed value to
$3.40/$100 (July 1992).
+$
6,400,000
1999
2000
Provide $50,000 taxable value threshold (revenue impact
is full year for FY 2001).
-$
6,000,000
1999
2000
Accelerated depreciation for computer equipment
(revenue impact is full year for FY 2001).
-$
9,000,000
2004
2005
15% of the District’s annual personal property tax (not to
exceed $10,000,000 per year) will be deposited in The
Neighborhood Investment Fund.
-$
9,547,000
2008
2008
Exemption amount increased from $50,000 to $225,000.
-$
11,07,000
2009
2009
17.4% (increased from 15%) of the District’s annual
personal property tax (not to exceed $10,000,000 per
year) will be deposited in The Neighborhood Investment
Fund.
---
2012
2012
Statutory transfer to The Neighborhood Investment Fund
suspended in FY 2012.
+$
10,000,000
56
HISTORY OF MAJOR CHANGES IN THE DISTRICT OF COLUMBIA TAX STRUCTURE
FISCAL YEAR 1970 – FISCAL YEAR 2016
FISCAL YEAR
OF
ENACTMENT
FISCAL
YEAR
EFFECTIVE
CHANGE
FULL YEAR
REVENUE
EFFECT AT
TIME OF
CHANGE 1/
PROPERTY TAXES-continued:
Real Property
1970
1970
Rate increased 10¢/$100 of assessed value to
$3.10/$100.
+$
3,600,000
1972
1972
Rate increased 10¢/$100 of assessed value to
$3.20/$100.
+$
3,900,000
1973
1973
Rate increased 12¢/$100 of assessed value to
$3.32/$100.
+$
4,700,000
1975
1975
Assessment level increased to 100% of estimated market
value; rate dropped to $1.83/$100.
---
1976
1976
First half real estate payment advance to September 15
th
from September 30
th
.
---
1977
1978
Single-family homes, condominiums and cooperatives
assessed value reduced by $6,000.
-$
11,650,000
1977
1978
Single-family homes, condominiums and cooperatives
must be owner-occupied in order to receive $6,000
Homestead Exemption.
-$
8,500,000
1978
1979
Increased owner-occupied single-family homes, condos
and cooperatives Homestead Exemption to $9,000.
-$
3,000,000
1979
1979
Three classifications of real property established for
determining the applicable property tax rate.
---
1980
1980
Class 3 rate increased 30¢/$100 of assessed value to
$2.13/$100.
+$
15,800,000
1982
1982
A quinquennial (every 5 years) filing permitted for the
$9,000 Homeowner’s Exemption.
---
1984
1984
Class 3 rate decreased 10¢/$100 of assessed value to
$2.03/$100.
-$
11,200,000
1984
1984
Public space rental formula changed from a fractional
assessment basis (65%) to a method based upon the
property’s full assessed value.
+$
900,000
1985
1985
Four classifications of real property established for
determining the applicable property tax rate.
-$
3,400,000
1986
1987
Established a July Nuisance Tax Sale in addition to the
annual January Real Property Tax Sale.
---
57
HISTORY OF MAJOR CHANGES IN THE DISTRICT OF COLUMBIA TAX STRUCTURE
FISCAL YEAR 1970 – FISCAL YEAR 2016
FISCAL YEAR
OF
ENACTMENT
FISCAL
YEAR
EFFECTIVE
CHANGE
FULL YEAR
REVENUE
EFFECT AT
TIME OF
CHANGE 1/
PROPERTY TAXES-continued:
Real Property-continued
1986
1987
Retired Senior citizens, 65 or older, receive 50%
reduction on real property taxes (01/87).
-$
6,400,000
1987
1987
Increased owner-occupied single-family homes,
condominiums and cooperatives Homestead Exemption
to $15,000 (01/87).
-$
6,500,000
1988
1989
Increased owner-occupied single-family homes,
condominiums and cooperatives Homestead Exemption
to $22,000 (06/88).
-$
7,600,000
1990
1990
Increased owner-occupied single-family homes,
condominiums and cooperatives Homestead Exemption
to $30,000 (06/90).
-$
7,100,000
1990
1990
Class 1 rate decreased from $1.06 to $0.96.
-$
14,100,000
1990
1990
Established Class 5 for unimproved vacant land at rate of
$3.29.
+$
5,800,000
1992
1992
Expand eligibility for senior citizen property tax relief and
cap eligibility at $100,000 income (07/92).
+$
2,500,000
1993
1994
Increase Class 5 rate from $3.29 to $5.00.
+$
5,100,000
1995
1995
Calculated rates go into effect for the 1
st
half of year.
Class 1 rate = $0.96
Class 2 rate = $1.62
Class 3 rate = $1.81
Class 4 rate = $2.31
Class 5 rate = $5.35
+$
40,100,000
1996
1996
Eliminated July Nuisance Tax Sale.
---
1997
1997
Replace January Real Property Sale with a July Real
Property Tax Sale.
---
1997
1999
The District began 3-year phase-in of a triennial
assessment system. Properties were divided into three
triennial groups for assessment purposes. One tri-group
is reassessed each year. Tri-group I in Fiscal Year 1999,
tri-group II in Fiscal Year 2000, and tri-group III in Fiscal
Year 2001.
---
1999
2000
Reduce Class 2 rate as follows:
FY 2000 – from $1.54 to $1.34
FY 2001 – from $1.34 to $1.15
FY 2002 – from $1.15 to $0.96 (combined with Class 1
as Residential)
-$
-$
-$
13,100,000
25,600,000
38,100,000
58
HISTORY OF MAJOR CHANGES IN THE DISTRICT OF COLUMBIA TAX STRUCTURE
FISCAL YEAR 1970 – FISCAL YEAR 2016
FISCAL YEAR
OF
ENACTMENT
FISCAL
YEAR
EFFECTIVE
CHANGE
FULL YEAR
REVENUE
EFFECT AT
TIME OF
CHANGE 1/
PROPERTY TAXES-continued:
Real Property-continued
1999
2000
Reduce Class 4 rate as follows:
FY 2000 – from $2.15 to $2.05
FY 2001 – from $2.05 to $1.95
FY 2002 – from $1.95 to $1.85 (reclassified as Class 2-
non-residential)
-$
-$
-$
16,800,000
33,500,000
50,300,000
1999
2000
Reduce Class 5 rate as follows:
FY 2000 – from $5.00 to $2.05
FY 2001 – from $2.05 to $1.95
FY 2002 – from $1.95 to $1.85 (reclassified as Class 2-
non-residential)
-$
-$
-$
4,100,000
4,300,000
4,400,000
2000
2000
Purchaser of tax sale property does not receive deed until
Court judgment forecloses right of redemption.
---
2002
2003
Return to annual assessment and instituting a 25% cap
on annual tax growth of residential properties. One
triennial group shifts into annual assessment each year
through FY 2004, beginning with tri-group I, tri-group II in
FY 2003, and tri-group III in FY 2004. By FY 2004, all
property in the District will once again be reassessed on
an annual basis.
+$
55,000,000
2002
2003
Created a new Class 3 for abandoned and vacant
property, rate increased from $1.85 to $5.00
+$
15,900,000
2003
2004
Homestead exemption increased from $30,000 to
$38,000.
-$
6,653,000
2003
2004
Cap on Real Property value decreased from 25% to 12%.
-$
20,932,000
2005
2006
Reduce Class 1 rate from $0.96 to $0.92
-$
17,553,000
2005
2006
Homestead exemption increased from $38,000 to
$60,000.
-$
16,542,000
2006
2006
Cap on Real Property value decreased from 12% to 10%.
-$
3,300,000
2006
2006
Low income property tax deferred
-$
2,000,000
2006
2007
Reduce Class 1 rate from $0.92 to $0.88
-$
17,100,000
2008
2008
Homestead exemption increased from $60,000 to
$64,000.
-$
4,000,000
2008
2008
Reduce Class 1 rate from $0.88 to $0.85
-$
17,500,000
59
HISTORY OF MAJOR CHANGES IN THE DISTRICT OF COLUMBIA TAX STRUCTURE
FISCAL YEAR 1970 – FISCAL YEAR 2016
FISCAL YEAR
OF
ENACTMENT
FISCAL
YEAR
EFFECTIVE
CHANGE
FULL YEAR
REVENUE
EFFECT AT
TIME OF
CHANGE 1/
PROPERTY TAXES-continued:
Real Property-continued
2008
2009
Class 2 properties will be subject to a split tax rate
structure. Tax rate for the 1
st
$3 million in assessed
value would be taxed at $1.65 per $100 and excess of $3
million in assessed value would be taxed at $1.85 per
$100.
-$
20,200,000
2008
2009
Increased Class 3 rate from $5.00 to $10.00.
+$
8,000,000
2009
2009
Homestead exemption increased from $64,000 to
$67,500.
-$
4,000,000
2009
2010
Delayed homestead deduction indexing through FY2013
+$
4,000,000
2009
2010
Reclassified Class 3 properties to only include improved
blighted property
-$
12,756,000
2010
2011
Reclassified Class 3 properties to only include improved
vacant property
---
2010
2011
Created a new Class 4 for improved blighted property,
rate $10.00
+$
3,182,918
2013
2013
Homestead exemption increased from $67,500 to
$69,100.
-$
1,217,431
2014
2014
Homestead exemption increased from $69,100 to
$70,200
-$
844,688
2014
2015
Interest-free real property tax deferral for seniors over 75
and with AGI less than $60,000 and interest and dividend
income less than $12,500, if they have owned a house in
the District for 25 years or more.
-$
2,795,000
2015
2015
Homestead exemption increased from $70,200 to
$71,400
-$
964,073
2015
2016
Homestead exemption increased from $71,400 to
$71,700
-$
247,376
PUBLIC SPACE RENTAL
2005
2006
Public Space Rental will be dedicated to DDOT as
Special Purpose Revenue.
-$
17,077,000
2010
2012
DDOT Unified Fund was repealed and all Public Space
Rental revenue will now remain in the local fund.
+$
33,456,000
60
HISTORY OF MAJOR CHANGES IN THE DISTRICT OF COLUMBIA TAX STRUCTURE
FISCAL YEAR 1970 – FISCAL YEAR 2016
FISCAL
YEAR OF
ENACTMENT
FISCAL
YEAR
EFFECTIVE
CHANGE
FULL YEAR
REVENUE
EFFECT AT
TIME OF
CHANGE 1/
PUBLIC UTILITIES
1973
1973
Rate increased from 4% to 5%.
+$
3,000,000
1976
1976
Rate increased from 5% to 6%.
+$
4,800,000
1977
1977
Payment due with return August 1
st
.
---
1983
1983
Rate increased from 6% to 6.7%.
+$
8,200,000
1983
1984
Repealed estimated reporting and payment provisions.
---
1983
1984
Payment dates changed from annually on or before August
1
st
to monthly by the 20
th
day of each month.
---
1987
1987
Gross receipts tax imposed on all telecommunications
service providers.
+$
20,000,000
1989
1989
Gross receipts tax repealed on all telecommunications
service providers.
-$
20,000,000
1991
1991
Gross receipts tax rate increased, by temporary legislation,
from 6.7% to 9.7% (estimated revenue effect is for three
months).
+$
12,200,000
1992
1992
Gross receipts tax rate of 9.7% made permanent (April
1992).
+$
44,300,000
1992
1992
Expand public utility gross receipts tax to include cable TV,
video, radio and other services (July 1992).
+$
4,200,000
1994
1994
Gross receipts rate increases to 10% (June 1994).
+$
3,900,000
1994
1994
Expand gross receipts tax to heating oil (June 1994).
+$
1,800,000
1997
1997
Tax base expanded to 3
rd
party providers of natural gas.
+$
800,000
1998
1999
Tax base narrowed to exclude gross receipts tax collected
from consumers.
-$
14,000,000
2002
2003
Rate increased from 10% to 11%.
+$
10,400,000
2004
2005
Rate decrease from 11% to 10% for residential. Non-
residential will remain at 11% with 1% going to finance the
construction of the baseball stadium.
-$
9,000,000
Electric rate for nonresidential increase from $.0070 to
$.0077. The $.0007 surcharge is dedicated to the
construction of the baseball stadium.
Natural Gas basis for taxable was changed to per therm of
natural gas delivered to end-users.
Residential
$0.0703 from 12/02/05
to 09/28/06
$0.0707 from 09/29/06
Nonresidential
$0.0703 plus $0.00983
from 12/02/05 to 09/28/06
$0.0707 plus $0.00707
from 09/29/06
---
2006
2006
Heating oil changed from rate based on gross receipts to
rate based on gallons used. New rate $0.17 for residential
and $0.187 for non-residential.
---
61
HISTORY OF MAJOR CHANGES IN THE DISTRICT OF COLUMBIA TAX STRUCTURE
FISCAL YEAR 1970 – FISCAL YEAR 2016
FISCAL YEAR
OF
ENACTMENT
FISCAL
YEAR
EFFECTIVE
CHANGE
FULL YEAR
REVENUE
EFFECT AT TIME
OF CHANGE 1/
TOLL TELECOMMUNICATIONS-continued:
1989
1989
Effective March 3, 1989, toll telecommunications gross
charges subjected to a tax of 6.7%. This replaced the
gross receipts tax on all telecommunication service
providers and also provided partial sales and personal
property tax exemptions.
+$
20,000,000
1991
1991
Toll telecommunication gross charges tax rate increased
by temporary legislation from 6.7% to 9.7%.
+$
2,500,000
1992
1992
Gross charges rate of 9.7% made permanent (April
1992).
+$
10,000,000
1994
1994
Gross charges tax rate increased to 10% (June 1994).
+$
2,700,000
1996
1997
Toll telecommunications tax base expanded to include
commercial mobile cellular service.
+$
4,800,000
1998
1999
Toll telecommunications tax base for commercial mobile
cellular service changed.
-$
500,000
1998
1999
Tax base narrowed to exclude gross receipts tax
collected from consumers.
-$
5,000,000
2002
2003
Rate increased from 10% to 11%.
+$
4,900,000
2004
2005
Rate decrease from 11% to 10% for residential. Non-
residential will remain at 11% with 1% going to finance
the construction of the baseball stadium.
-$
9,000,000
SALES AND USE TAX
1970
1970
Rate of 5.0% imposed on all restaurant meals and sales
of alcoholic beverages.
+$
3,400,000
1970
1970
Rate of 2.0% applies to:
Groceries-with a sales tax credit for residents earnings
below $6,000;
Laundry and dry cleaning;
Non-prescription drugs.
+$
+$
+$
1,300,000
1,000,000
350,000
1970
1970
Rate of 4.0% applies to:
Admissions to theaters and public events;
Repair of tangible personal property;
Duplicating, addressing and mailing services.
+$
+$
+$
700,000
2,200,000
800,000
1972
1972
Rentals of linens added to base at 2.0%
+$
125,000
62
HISTORY OF MAJOR CHANGES IN THE DISTRICT OF COLUMBIA TAX STRUCTURE
FISCAL YEAR 1970 – FISCAL YEAR 2016
FISCAL YEAR
OF
ENACTMENT
FISCAL
YEAR
EFFECTIVE
CHANGE
FULL YEAR
REVENUE
EFFECT AT
TIME OF
CHANGE 1/
SALES AND USE TAX-continued:
1973
1973
General rate increased from 4.0% to 5.0%.
+$
13,000,000
1973
1973
Transient accommodations, sale of alcoholic beverages
and restaurant meals increased from 5.0% to 6.0%.
+$
2,800,000
1976
1976
Groceries, non-prescription drugs and laundry and dry
cleaning exempted.
-$
6,800,000
1976
1976
Rental of linens increased from 2.0% to 5.0%.
+$
300,000
1976
1976
Motor vehicle parking subject to tax at 8.0%
+$
3,300,000
1976
1976
Transient accommodations, restaurant meals increased
from 6.0% to 8.0%
+$
9,400,000
1976
1976
Motor vehicle parking increased from 8.0% to 12.0%.
+$
1,600,000
1980
1980
General rate increased from 5.0% to 6.0%. Sales of
motor fuel subjected to general sales tax rate of 6.0%.
Transient accommodations increased from 8.0% to
10.0%.
+$
29,000,000
1980
1980
Candy, confectionery, chewing gum and soft drink sales
are taxable at 8.0%. Rental or leasing of rental vehicles
and utility trailers subject to 8.0% use tax.
+$
2,500,000
1981
1981
Sales tax on motor fuel sales repealed, effective
December 1, 1980.
-$
13,000,000
1982
1982
Repeal the 8.0% tax on candy, confectionery, chewing
gum and soft drinks.
-$
2,500,000
1984
1985
Sales tax rate on items sold in vending machines
increased from 2.0% to 6.0%.
+$
1,000,000
1987
1987
Exempt certain food items to maintain conformity to
federal food stamp laws.
---
1987
1987
Examine District of Columbia sales exemption status
organization exempt under Internal Revenue Code 501C
(4).
---
1989
1989
Established tax on real property services at the rate of
6.0%.
+$
10,000,000
1989
1989
Established tax on data processing and information
services at 6.0%.
+$
25,000,000
1989
1989
Established Vendor credit of 1.0% of sales.
-$
1,600,000
63
HISTORY OF MAJOR CHANGES IN THE DISTRICT OF COLUMBIA TAX STRUCTURE
FISCAL YEAR 1970 – FISCAL YEAR 2016
FISCAL YEAR
OF
ENACTMENT
FISCAL
YEAR
EFFECTIVE
CHANGE
FULL YEAR
REVENUE
EFFECT AT
TIME OF
CHANGE 1/
SALES AND USE TAX-continued
1989
1989
Restaurant meals and sales of alcoholic beverages
increased from 8.0% to 9.0%.
+$
11,000,000
1989
1989
Transient accommodations increased from 10.0% to
11.0%.
+$
7,000,000
1990
1990
Clarified tax on services not to apply to services provided
to affiliated companies.
-$
1,000,000
1991
1991
Sales tax on residential utility services repealed by
temporary legislation (estimated revenue effect is for
three months).
-$
3,900,000
1992
1992
Increased sales tax rate on sale of off premises
consumption of alcoholic beverages from 6.0% to 8.0%
(June 1992).
+$
2,900,000
1992
1992
Expand 6.0% sales tax base to include laundering
services (July 1992).
+$
3,000,000
1992
1992
Make repeal of sales tax on residential utilities services
permanent (April 1992).
-$
15,700,000
1993
1993
Expand 6.0% sales tax base to include the following:
Snack foods;
Selected telecommunications services;
All publications and newspapers.
+$
+$
+$
2,700,000
7,600,000
2,700,000
1994
1994
Temporally increase general sales tax rate to 7.0% (June
1994).
+$
10,800,000
1994
1994
Expand sales tax base to courier services (June 1994).
+$
2,000,000
1994
1994
Expand sales tax base to employment services (June
1994).
+$
2,500,000
1994
1995
Permanently reduce general sales tax rate to 5.75%
(October 1994).
-$
9,200,000
1994
1995
Restaurant meals and alcohol for on premise
consumption increased from 9.0% to 10.0% with the
1.0% increase to finance the Convention Center (October
1994).
+$
12,400,000
1994
1995
Transient accommodations increased from 11.0% to
13.0% with 2.5% to increase funding for new Convention
Center.
+$
10,960,000
64
HISTORY OF MAJOR CHANGES IN THE DISTRICT OF COLUMBIA TAX STRUCTURE
FISCAL YEAR 1970 – FISCAL YEAR 2016
FISCAL YEAR
OF
ENACTMENT
FISCAL
YEAR
EFFECTIVE
CHANGE
FULL YEAR
REVENUE
EFFECT AT
TIME OF
CHANGE 1/
SALES AND USE TAX-continued
1999
1999
Transient accommodations tax increased from 13.0% to
14.5% to increase funding for new Convention Center.
However, general fund tax portion of hotel sales tax
reduced from 10.2% to 10.05% (October 1999). 8/
-$
4,000,000
1999
2000
Sales tax on Internet access eliminated.
---
2001
2001
Repeal the sales tax on snack foods.
-$
3,300,000
2001
2001
Eliminates the 1.0% sales tax credit allowed to vendors
for timely filing their returns.
---
2001
2001
Sales tax holiday (10 days: August 3
rd
to August 12
th
).
-$
908,000
2002
2003
Increased retail alcoholic beverage tax rate from 8.0% to
9.0%.
+$
1,350,000
2004
2005
Implemented permanent sales tax holiday in August and
November.
-$
500,000
2005
2005
Implemented 10% charge on all tickets sold and all
merchandise sold at baseball games and transferred to
the Ballpark Fund.
-$
8,562,000
2006
2006
50% Commercial lot parking rate dedicated to DDOT and
50% to Capital Fund.
-$
30,000,000
2006
2006
Increase tax on tobacco products used for smoking,
chewing or as snuff, made in whole or in part with
tobacco, except for cigarettes, premium cigars, or pipe
leaf tobacco products from 5.75% to 12%.
+$
12,000
2009
2010
Eliminate sales tax holidays
+$
1,283,000
2009
2010
Increased general sales tax rate from 5.75% to 6.0% until
FY2013.
+$
20,528,000
2011
2012
Soft drinks (non-alcoholic beverages not containing milk,
or milk substitutes, non-carbonated fruit or vegetable
juice, coffee, cocoa or tea) are no longer exempt from
sales tax and revenues are dedicated to DC Healthy
Schools Fund.
+$
4,266,000
2010
2012
Repeal of DDOT Unified Fund and allocation of all
parking tax revenue to support the District’s contributions
to the Metro system.
---
2011
2012
Increased retail alcoholic beverage tax from 9% to 10%.
Revenue raised will fund the Reimbursable Detail
Subsidy Program in the Alcoholic Beverage Regulation
Administration (ABRA).
+$
460,000
2011
2012
Sales tax expanded to include armored car services,
private investigation services, and security services.
+$
4,870,000
65
HISTORY OF MAJOR CHANGES IN THE DISTRICT OF COLUMBIA TAX STRUCTURE
FISCAL YEAR 1970 – FISCAL YEAR 2016
FISCAL YEAR
OF
ENACTMENT
FISCAL
YEAR
EFFECTIVE
CHANGE
FULL YEAR
REVENUE
EFFECT AT
TIME OF
CHANGE 1/
SALES AND USE TAX-continued
2011
2012
Increased parking tax from 12% to 18%.
+$
18,239,000
2011
2013
Retain 6.0% sales tax rate after FY 2012.
+$
15,890,000
2012
2013
All licensed street or mobile vendors to collect sales
taxes and make a minimum sales tax payment of $375
per quarter. Vendors that collect more than $375 per
quarter in sales taxes would be required to remit the full
amount collected.
+$
1,158,000
2013
2013
Authorizes Class A licensees to sell alcohol on Sundays
and dedicates the revenues to ABRA’s Reimbursable
Detail Subsidy Program.
+$
710,000
2013
2014
Reduce general sales tax rate to 5.75%.
-$
19,830,000
2014
2015
Sales tax base expanded to include some currently
untaxed services, such as bottled water delivery, carpet
and upholstery cleaning services, fitness and recreational
sports centers, and other personal care services such as
tanning, car washes, bowling centers and billiard parlors.
+$
9,200,000
2014
2016
Adds a use tax line on the individual income tax form so
residents can pay sales taxes on items they purchased
remotely if the vendor did not charge a sales tax on the
transaction.
+$
1,000,000
2014
2015
All tobacco products, except premium cigars and e-
cigarettes will be taxed similarly to cigarettes.
+$
7,000,000
2014
2015
Excise tax on other tobacco products changed to a
calculated rate based on wholesale sales that will be
equaled to the tax rate on a package of 20 cigarettes.
The tax rate of other tobacco products is changed from
$0.75 per ounce to 70% of the average wholesale price
of a package of 20 cigarettes.
---
2015
2016
The tax rate of other tobacco products is changed from
70% of the average wholesale price of a package of 20
cigarettes to 67% of wholesale sales of other tobacco
products.
---
2015
2016*
Changed the definition of other tobacco products to
include vapor products like e-cigarettes.
+$
382,000*
*= FY2016 Revenue impact.
HOTEL OCCUPANCY TAX
1978
1978
Hotel occupancy tax of $0.80 per room per day enacted.
+$
3,000,000
1982
1983
Rate increased to $1.00 per room per day.
+$
938,000
1989
1989
Rate increased from $1.00 to $1.50 per room per day.
+$
3,000,000
1999
1999
Repeal of hotel occupancy tax (October 1, 1998).
-$
5,400,000
66
HISTORY OF MAJOR CHANGES IN THE DISTRICT OF COLUMBIA TAX STRUCTURE
FISCAL YEAR 1970 – FISCAL YEAR 2016
FISCAL YEAR
OF
ENACTMENT
FISCAL
YEAR
EFFECTIVE
CHANGE
FULL YEAR
REVENUE
EFFECT AT
TIME OF
CHANGE 1/
SPECIAL PROGRAMS
1985
1985
District of Columbia Rental Housing Act of 1985. 9/
---
1987
1987
Tax Amnesty Program (July 1, 1987 – September 30,
1987). 10/
+$
10,000,000
1994
1994
One year public fee implementation.
+$
10,900,000
1994
1995
Arena Fee, to finance a downtown sports arena.
+$
9,100,000
1999
2000
Arena Fee rates changed as follows:
+$
3,000,000
ORIGINAL RATES
REVISED RATES
DC
Gross
Arena
Fee
DC
Gross
Arena
Fee
$0 - $200K
$25
$2M-$3M
$1,000
$200K - $500K
$50
$3M - $10M
$3,300
$500K - $1M
$100
$10M - $15M
$6,500
$1M - $3M
$825
Over $15M
$11,000
$3M - $10M
$2,500
$10M - $15M
$5,000
$15M and over
$8,400
2001
2001
Arena Fee terminated in Fiscal Year 2001.
-$
12,000,000
2002
2003
The Housing Production Trust Fund established-15% of
Deed Recordation and Deed Transfer Taxes will be
deposited to provide financial assistance for housing
available to low and moderate-income families and
individuals
+$
5,000,000
2004
2005
Healthcare Provider Fee.
+$
5,500,000
2004
2005
The Neighborhood Investment Fund established-15% of
the District’s personal property tax (not to exceed
$10,000,000).
+$
9,547,000
2005
2005
Ballpark Bonds-1% of Toll Telecommunication and Public
Utility Taxes for non-residential will be used to finance the
construction of the DC baseball stadium.
+$
14,000,000
DC Gross
Receipts
Ballpark Fee
Rate
$ 5 - $ 8M
$ 8 - $12M
$12 - $16M
$16M and over
$ 5,500
$10,800
$14,000
$16,500
67
HISTORY OF MAJOR CHANGES IN THE DISTRICT OF COLUMBIA TAX STRUCTURE
FISCAL YEAR 1970 – FISCAL YEAR 2016
FISCAL YEAR
OF
ENACTMENT
FISCAL
YEAR
EFFECTIVE
CHANGE
FULL YEAR
REVENUE
EFFECT AT
TIME OF
CHANGE 1/
SPECIAL PROGRAMS-continued:
2007
2008
The Verizon Center Sales Tax Revenue Bond Approval
Act of 2007: in order to service a loan to renovate the
Verizon Center, merchandise and tickets for events at the
Verizon Center will be subject to a tax of 10% (compared
to the prior rate of 5.75%). The revenue collected from
the increased rate, will be placed into a separate fund and
used to make principal and interest payments on the
loan.
---
2009
2010
Enacted a 5¢ plastic bag fee on all non-recyclable plastic
carryout bags, effective October 1, 2009.
+$
3,679,000
2010
2010
Hospital and medical services corporation (HMSC)
allowed to make a $5,000,000 annual payment in lieu of
community reinvestment and transferred to the Healthy
DC and Health Care Expansion Fund. The total
agreement is for $25 million; the final contribution is in FY
2014.
---
2010
2011
Revenues from the sale of medical marijuana will be
transferred to the Healthy DC and Health Care Expansion
Fund.
---
2010
2011
$1,500 assessment per licensed bed that is dedicated to
the Hospital Fund to finance Medicaid services.
+$
6,257,000
2010
2011
$2,000 assessment per licensed bed that is dedicated to
the Hospital Fund to finance Medicaid services.
+$
2,098,000
2011
2012
$2,529 assessment per licensed bed in FY 2011, and a
$3,788 assessment per licensed bed for FY 2012-FY
2014, will be used to fund Medicaid services.
+$
7,170,000
68
HISTORY OF MAJOR CHANGES IN THE DISTRICT OF COLUMBIA TAX STRUCTURE
FISCAL YEAR 1970 – FISCAL YEAR 2016
FISCAL YEAR
OF
ENACTMENT
FISCAL
YEAR
EFFECTIVE
CHANGE
FULL YEAR
REVENUE
EFFECT AT
TIME OF
CHANGE 1/
SPECIAL PROGRAMS-continued
2010
2011
Each intermediate care facility for Individuals with
Intellectual and Developmental Disabilities (ICF-IDD) in
DC will pay assessment of 5.5% of gross revenue in
quarterly installments and this will be transferred to the
Stevie Sellows Quality Improvement Fund.
---
2015
2016
0.52% fee on hospital’s inpatient net patient revenue in
FY 2016 and is dedicated to the Hospital Fund.
+$
10,400,000
2015
2016
0.16% fee on hospital’s outpatient gross patient revenue
in FY 2016 and is dedicated to the Hospital Provider Fee
Fund.
+$
6,700,000
1/
2/
3/
4/
5/
6/
7/
8/
9/
10/
11/
The revenue effect of each law change is mutually exclusive.
The revenue effect of adding financial institutions to the corporation franchise tax base resulted in a revenue loss of $7.2 million
annually by Fiscal Year 1985. The increase shown results from the mechanisms of phasing in the change.
Income tax change effective on a calendar year basis.
Top rate may be reduced as low as 8.0%, depending upon revenue and economic performance.
Revenue impact represents increase in general fund (local) revenues.
Estimate provided by Department of Public Works.
For owner-occupied, property sold under $250,000, the rate will remain at 1.1%.
Revenue effect reflects loss to general fund (local) revenues.
Department of Finance and Revenue require Tax Standing Evaluation Reports.
Amnesty from penalties and interest for all taxes except real property tax and unemployment compensation. Effective October
1, 1987, penalties and interest for all taxes except real property and unemployment compensation increase.
For owner-occupied, property sold with a value of less than $400,000, rate will remain at 1.1%.
69
PART V -- FILING AND PAYMENT DATES, FY 2016
FILING AND PAYMENT DATES
FY 2016
Alcoholic Beverage Tax
The tax is due before the 15th day of each month on the preceding month's sales.
Cigarette Tax
Payment is made by the purchase of stamps that are affixed to the packages of cigarettes. Such
stamps shall be affixed to each original package of such cigarettes within 72 hours after the
receipt of such cigarettes and prior to the sale of such cigarettes unless such cigarettes are
exempt from taxation.
Tobacco Products Excise Tax
The return and tax due is due no later than the 21
st
calendar day after the end of each calendar
quarter. A return is required even if no tax is due for the reporting period.
Estate Tax
Returns and tax are due 10 months after death of decedent, and must include a copy of the
federal estate tax return, if any. A return is not required to be filed if the gross estate does not
exceed $1 million.
A penalty of 5% per month, but not more than 25% in the aggregate, of the tax due is imposed
for the failure to timely file the return or pay the tax. Interest is assessed on any tax not paid by
the due date at the rate of 10% compounded daily per statute (without regard to any extension).
Income Taxes:
Corporate and Unincorporated Business Franchise Taxes
Corporate returns for fiscal filers are due and payment of the tax must be made on or before the
15th day of the fourth month following the close of the taxable year, and April 15th using a
calendar year. Unincorporated business franchise tax returns filed by fiscal year are due and
payment of tax must be made on or before the 15th day of the fourth month following the close
of the taxable year while a return filed by calendar year is due by April 15th. A penalty of 5%,
but not more than 25% in the aggregate, is imposed for failure to timely file returns, and a 20%
penalty on the portion of an underpayment of taxes if attributable to negligence. Interest is
imposed for any tax not paid when due at the rate of 10% compounded daily per statute until the
tax is paid.
71
FILING AND PAYMENT DATES--Continued
Individual Income Tax
Calendar year returns are due on or before April 15 of the succeeding year while fiscal year
returns are due on or before the 15th day of the fourth month following the close of the fiscal
year.
The penalty for failure to file a return on time is 5% of the tax due, but not more than 25% in the
aggregate. Interest at the rate of 10% compounded daily per statute is charged from the due
date of the return to the date the tax is paid.
Individuals who reside in the District and who are not subject to a withholding tax on their gross
income must pay estimated taxes on a quarterly basis if they expect to have a tax liability of
more than $100 for the tax year. Estimated payments for a tax year are due on April 15
th
, June
15
th
, September 15
th
of that year, and January 15
th
of the next year.
The penalty for failure to file a declaration of estimated tax on time is 5% per month of the
estimated tax, but not more than 25% in the aggregate. Interest is charged for failing to pay any
installment when due at the rate of 10% compounded daily per statute.
Employers must withhold District individual income taxes from employees who are subject to the
tax. If such withholding is less than $50 per month, the employer must remit the tax by the last
day of the month following the close of the tax year; if withholding is $50 or more per month, it
must be remitted by the 20th day of the following month.
The penalty for failure to file the withholding tax return or to pay the tax when due is 5% of the
tax withheld during the reporting period, but not more than 25% in the aggregate. Interest is
charged for late payment at the rate of 10% compounded daily per statute from the due date of
the return to the date the tax is paid.
Insurance Premiums Tax
If tax liability is less than $1,000, the tax must be paid before March 1 of the succeeding
calendar year. If tax liability is $1,000 or more, at least 50% of tax must be paid by June 1 of the
calendar year in which the taxable income is received. The remainder is due on or before
March 1 following the close of the calendar year. A penalty of 8% per month of the tax due is
charged for failure to timely pay the insurance premium tax.
Motor Vehicle Excise Tax
The tax is levied at the time that the certificate of title is issued.
Motor Vehicle Fuel Tax
Reports and tax are due by the 25th day of each month on the preceding month's sales or
dispositions.
72
FILING AND PAYMENT DATES--Continued
Motor Vehicle Registration Fee
Under the staggered motor vehicle registration system, motorists will pay their registration fees
upon assumption of ownership of the vehicle or by an assigned day of the year.
Personal Property Tax
The return, accompanied by the tax payment, is due on or before July 31 of each year on the
tangible personal property remaining cost (current value) as of July 1. A penalty of 5% per
month, but not more than 25% total, is charged for failure to timely file a return. Interest at the
rate of 10% compounded daily per statute is charged until the tax is paid.
Real Property Tax
The assessment year begins on October 1 and ends on September 31. Property owners
receive notices of proposed assessments on or before the following March 1 and have until April
1 to appeal such assessments before the Assessment Division. If the assessor and the
property owner, or party of interest, do not resolve a disputed value, the property owner may
proceed to the Real Property Tax Appeals Commission (RPTAC). RPTAC will not accept an
appeal unless there has first been an appeal to the Office of Tax and Revenue’s Assessment
Division.
The tax may be paid in full or in two equal installments. One-half the tax is payable on or before
March 31 and the other half tax is due on or before September 15. There shall be added to the
real property tax or installment a penalty of 10% of the unpaid amount due to late payment of
real estate tax bills, plus interest on the unpaid amount at the rate of 1.5% per month (18% a
year) or portion of a month until the real property tax or installment is paid.
Public Utility Tax
Returns are due by the 20th day of each month on the preceding month's gross receipts. A
penalty of 5% per month, but not more than 25% in the aggregate, is charged for failure to file a
return or pay taxes on time. There is a 20% penalty on the portion of an underpayment of taxes
if attributable to negligence. Interest is charged at the rate of 10% compounded daily per statute
until the tax is paid.
Deed Recordation Tax
The deed recordation tax is due when the deed is recorded. Each deed must be accompanied
by a tax return before it can be recorded. A $250.00 penalty is due for all Deeds of Title that are
submitted for recording later than (30) thirty calendar days from its execution date. However, if a
request for an exemption from real property tax is denied, a charge of whatever tax owed at time
for recording plus the necessary interest of 10% per year compounded daily, is due.
73
FILING AND PAYMENT DATES—Continued
Deed Transfer Tax
The transfer tax is due when the deed is recorded and each deed must be accompanied by a
transfer tax return.
Economic Interest Transfer
The economic interest transfer tax is triggered by two elements. These elements 1) more than
50% of the controlling interest of the property owner is transferred; and 2) 80% of the assets of
the property owner consist of real property located in DC. If these two elements are met then the
tax rate is 2.9% of the consideration. The transfer tax is due at the time of recordation.
Sales and Use Taxes
Monthly returns and tax are due by the 20th day of each month following the reporting period. If
the due date falls on Saturday, Sunday or a legal holiday, the return is due on the next business
day. To avoid a delinquency notice, a return must be filed even if no sales were made or no
sales or use tax is due.
An annual return is due on or before October 20th. To avoid delinquency notices, a return must
be filed even if no sales were made or no sales or use tax is due.
Quarterly returns are due on or before the 20th day of the month after the quarter.
A penalty of 5% per month, but not more than 25% in the aggregate, is charged for failure to file
sales and use tax returns or to pay sales and use taxes on time. Interest is charged at the rate
of 10% per year, compounded daily, until the tax is paid.
Toll Telecommunications Tax
Returns and tax are due by the 20th day of each month on the preceding month's charges. An
annual return must be filed on or before 30 days after the end of the tax year.
A penalty of 5% per month, but not more than 25% in the aggregate, is charged for failure to file
tax returns or to pay toll telecommunications taxes on time. Interest is charged at the rate of
10% compounded per statute until the tax is paid.
74
OFFICE LOCATIONS AND TELEPHONE NUMBERS
Government of the District of Columbia
Office of the Chief Financial Officer
The John A. Wilson Building
1350 Pennsylvania Avenue, NW, Suite 203
Washington, DC 20004
Office hours: (Monday - Friday) 8:00 a.m. – 5:00 p.m.
(202) 727-2476
Office of the Chief Financial Officer
Jeffrey DeWitt, Chief Financial Officer
Marshelle Richardson, Chief Risk Officer
Baraka Ondiek, Continuous Improvement Officer
Angell Jacobs, Chief of Staff and Deputy Chief Financial Officer
David Tseng, General Counsel
Richard Weil, Interim Chief Information Officer
Paul Lundquist, Executive Director for Management and Administration
David Umansky, Public Affairs Officer
Timothy Barry, Executive Director for Integrity & Oversight
John P. Ross, Director of Economic Development Finance and Senior Advisor
Darryl Street, Senior Financial Policy Advisor
Office of Revenue Analysis (ORA)
Fitzroy Lee, Deputy Chief Financial Officer
1101 4
th
Street, SW, Suite W770, Washington, DC 20024
(202) 727-7775
Office of Budget and Planning (OBP)
Gordon McDonald, Deputy Chief Financial Officer
1350 Pennsylvania Avenue, NW, Suite 229, Washington, DC 20004
(202) 727-6234
Office of Finance and Treasury (OFT)
Jeffrey Barnette, Deputy Chief Financial Officer and Treasurer
1101 4
th
Street, SW, Suite W850, Washington, DC 20024
(202) 727-6055
Office of Financial Operations and Systems (OFOS)
Bill Slack, Deputy Chief Financial Officer
1100 4
th
Street, SW, Suite E800, Washington, DC 20024
(202) 442-8200
Office of Tax and Revenue (OTR)
Stephen M. Cordi, Deputy Chief Financial Officer
1101 4
th
Street, SW, Suite W750, Washington, DC 20024
(202) 442-6200
DC Lottery
Tracey Cohen, Interim Executive Director
Economic Development and Regulation
Cyril O. Byron, Jr., Associate Chief Financial Officer
EventsDC
Henry Mosley, Associate Chief Financial Officer
Government Operations
Mohamed Mohamed, Associate Chief Financial Officer
Government Services
George Dines, Associate Chief Financial Officer
Human Support Services
Delicia Moore, Associate Chief Financial Officer
Not-for-Profit Hospital Corporation
Lillian Chukwuma, Associate Chief Financial Officer
Primary and Secondary Education
Deloras Shepherd, Associate Chief Financial Officer
Public Safety and Justice
Angelique Hayes Rice, Associate Chief Financial Officer
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