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DC Tax Guide

What You Need to Know About Taxes for the District of Columbia

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DC Tax Guide
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Taxes in DC are levied on a variety of items, including income, property and retail sales items. According to numbers crunched by the nonprofit Tax Foundation, DC’s local tax burden is 9.6%, ranking DC in the bottom third of all states. Here is a breakdown of the types of taxes collected in DC:

DC Income Tax

The District of Columbia collects income taxes from residents utilizing three tax brackets:
  • 4 percent on the first $10,000 of taxable income
  • 6 percent on taxable income between $10,001 and $40,000
  • 8.5 percent on taxable income of $40,001 and above.
Income from Social Security and up to $3,000 of military retired pay, pension income or annuity income is excluded.

For 2012, the standard deduction is $4,000 for a single individual, head of household, surviving spouse, or married person filing jointly. For a married person filing separately or a registered domestic partner, the standard deduction is $2,000.

Electronic filing is available and you can also find tax forms online.

The mailing address for the D-40 and D-40EZ individual income tax returns is Office of Tax and Revenue, PO Box 7182, Washington, DC 20044-7182. If mailing a refund or no payment return, mail to the Office of Tax and Revenue, PO Box 209, Washington, DC 20044-0209.

DC Sales Tax

DC imposes a 5.75% sales tax on taxable goods and services (exemptions from sales tax include groceries, prescription and non-prescription drugs, and residential utility services).

DC Property Tax

Property tax rates are established by the Council of the District of Columbia and may change from year to year. The amount of tax due is determined by dividing the assessed value of the property by $100, then multiplying that amount by the rate. The current tax rate on residential real property is $0.85 including multifamily units.

Inheritance and Estate Tax

DC collects an inheritance tax ranging from 6% for direct heirs to 15% for all other beneficiaries. Property inherited from a spouse or by a parent from a child 21 or younger is tax-exempt.

Other DC Taxes

  • Liquor sold for off-the-premises consumption – 9%
  • Cigarettes - $2.00 per pack of 20 and $2.50 per pack of 25
  • Restaurant meals, liquor for consumption on the premises, and rental vehicles - 10%
  • Parking motor vehicles in commercial lots - 12%
  • Hotels - 14.5%
For more information on DC taxes, visit the website of the DC Office of Tax and Revenue or call (202) 727-4TAX.

Read also, DC Government 101 - Things to Know About DC Laws, Officials, Agencies and More
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