Income tax in Washington DC
Washington DC levies an income tax of 4 to 10.75%, depending on income (since 2022, the top rate applies to income above $1 million). On top of that, you pay federal income tax.
Corporate tax in Washington DC
Washington DC levies a corporate tax (franchise tax) of 8.25%. On top of that, you pay federal corporate tax.
Sales tax in Washington DC
The USA has no VAT on the European model. Instead, states, counties and municipalities levy a local sales tax on the sale of goods (but not services).
Sales tax rate in Washington DC
The general sales tax rate in Washington DC is 6% (the increase planned for October 1, 2025 was suspended) and rises to 7% on October 1, 2026. There are no separate city or county surcharges.
Washington DC nexus laws & sales tax
Learn more about economic nexus laws and sales tax.
Effective date
January 1, 2019
Included transactions:
Gross receipts from all retail sales delivered into the District
Treatment of exempt sales:
Except for sales for resale, exempt sales and exempt services count toward the threshold.
Trigger:
Sales or transactions
Sales/transaction threshold:
$100,000 or 200 transactions
Evaluation period:
The threshold applies to sales in the previous or current calendar year
Additional information:
- Registration requirements: A remote business must register and start collecting District of Columbia sales tax "once its sales into the District exceed the economic nexus threshold". For more details, see the OTR FAQs (#4).
- OTR Notice 2019-02
- B22-1070
Washington DC marketplace sellers & sales tax
Learn more about registration requirements for marketplace sellers
Effective date for marketplace facilitators:
April 1, 2019
Economic nexus threshold:
More than $100,000 in gross sales or at least 200 transactions into the District in the current or previous calendar year. Remote sellers should include sales made through a marketplace when calculating the threshold.
Registration requirements:
- Remote multichannel sellers: Once you exceed the economic nexus threshold, you must register with the Washington, D.C. Office of Tax and Revenue (OTR) and collect District sales tax on sales not taxed by a marketplace facilitator.
- Remote marketplace sellers: You must register and collect District sales tax once you exceed the economic nexus threshold. Contact the Washington, D.C. OTR for more information.
- In-state multichannel sellers: You must register with the Washington, D.C. OTR and collect tax on sales not taxed by a marketplace facilitator.
- In-state marketplace sellers: You must register. Contact the Washington, D.C. OTR for more information.
- More information.
For an overview of every state, see our guide to the US states. Whether the District of Columbia or somewhere else is the right home for your US company is covered in Which US state is best for your company?, and you will find the basics in our guide to forming a company in the USA.
How we help with Washington DC:
Planning to do business in Washington DC? Find the right legal structure and state of formation in our overview of US company formation, and in a consultation we will walk through your plans together.