District of Columbia — Sales & Use Tax

The District of Columbia imposes a sales tax on all vendors for the privilege of selling at retail tangible personal property and certain selected services. The general rate is 6.0% through September 30, 2026, then 7.0% beginning October 1, 2026.

Legislative History of the Rate Schedule

The original rate schedule enacted in prior law provided for a three-step increase: 6.0% before October 1, 2025, 6.5% beginning October 1, 2025, and 7.0% beginning October 1, 2026. However, the Sales Tax Increase Delay Amendment Act of 2025 (enacted as part of the Fiscal Year 2026 Budget Support Emergency Amendment Act of 2025 and the Fiscal Year 2026 Budget Support Amendment Act of 2025) eliminated the intermediate 6.5% rate and extended the 6.0% rate through September 30, 2026. The 6.5% rate never took effect.

Source: D.C. Code § 47-2002(a) Source: OTR Notice of Oct. 1, 2025 Tax Changes

Scope of the Sales Tax

"Retail sale" and "sale at retail" mean the sale of any tangible personal property or service taxable under D.C. Code Title 47, Chapter 20, and include sales of tangible personal property to any person for any purpose other than resale in the same form or incorporation as material in property to be produced for sale by manufacturing, assembling, processing, or refining.

Source: D.C. Code § 47-2001(n)(1)

The tax is imposed on gross receipts, which means the total amount of the sales prices of retail sales valued in money, whether received in money or otherwise.

Source: D.C. Code § 47-2001(g-3)

Use Tax

The District imposes a complementary use tax at the same rate as the sales tax on purchases delivered outside the District and then brought into the District to be used, stored, or consumed.

Source: D.C. Code § 47-2202(a)

Selected Services Subject to Tax

Taxable services include data processing services, car washing (except coin-operated self-service), carpet and upholstery cleaning, security services, property maintenance, health club services, telecommunications services (including certain enumerated services), digital goods, and computer software (whether canned, prepackaged, or customized).

Source: D.C. Code § 47-2005 Source: 9 DCMR § 474.4

Higher Rates for Specific Items

Certain categories are taxed at higher rates:

• 18% on parking or storing motor vehicles or trailers
• 10.20% on transient lodging (with additional surtaxes for certain purposes)
• 9% on restaurant meals and prepared food for immediate consumption
• 10.25% on alcoholic beverages sold for off-premises consumption
• 8% on soft drinks
• 6% on medical cannabis
• 7.5% on commercial bingo (effective October 1, 2025)

Source: D.C. Code § 47-2002(a)

The District does not permit local jurisdictions to impose additional sales taxes.

A remote seller without physical presence in the District must collect and remit sales tax if, in the previous calendar year or the current calendar year, it had more than $100,000 of gross receipts from retail sales delivered into the District or made more than 200 separate retail sales delivered into the District. Meeting either threshold establishes economic nexus. The obligation to collect tax begins immediately upon exceeding either threshold and extends through the following calendar year, even if sales fall below the thresholds.

Source: D.C. Code § 47-2001(w) Source: OTR — Marketplace Sellers FAQs

Marketplace facilitators must collect and remit District sales tax on all sales they make on their own behalf and all sales they facilitate on behalf of marketplace sellers to customers in the District, regardless of whether the marketplace seller would have been required to collect sales tax if the sale had not been facilitated by the marketplace facilitator. This requirement took effect April 1, 2019.

A "marketplace facilitator" is a person that provides a marketplace that lists, advertises, stores, or processes orders for retail sales, and directly or indirectly collects payment from a purchaser and remits payment to a marketplace seller, regardless of whether the facilitator receives compensation for its services.

Source: D.C. Code § 47-2002.01a Source: D.C. Code § 47-2001(g-5) Source: OTR — Marketplace Facilitators Notice

Any person engaging in the business of making retail sales subject to District sales tax must obtain a certificate of registration before conducting business. No vendor may engage or continue in business making retail sales without this certificate.

Source: D.C. Code § 47-2026(a)

Every vendor making retail sales subject to District of Columbia sales tax must file returns according to a schedule set by the Office of Tax and Revenue (OTR), based on average tax liability:

• Monthly: Vendors with average sales and use tax liability of $1,201 or more per period are required to file monthly. Returns are due on or before the 20th day of the month following the reporting period.
• Quarterly: Vendors with average tax liability from $201 to $1,200 per period are required to file quarterly. Returns are due on or before the 20th day of the month following the end of each quarter.
• Annual: Vendors with average liability of $200 or less per year are permitted to file annually. Annual filers must submit returns and payment by October 20 of each year for the preceding 12-month period.

The Mayor has the authority to permit or require other periods as necessary in individual circumstances. The OTR will notify filers of their assigned frequency and may reassign filing frequency based on periodic tax liability reviews. Marketplace facilitators are generally required to file monthly regardless of liability threshold.

Statutory and Regulatory Authority: D.C. Code § 47-2015 establishes the general return filing requirements. The official OTR instructions for FR-800M, FR-800Q, and FR-800A (Bulk Return Instructions 2026) reflect the detailed frequency assignment thresholds and confirm the due dates, including that the annual filing due date is October 20.

Source: D.C. Code § 47-2015 Source: 2026 FR-800 Bulk Filing Instructions, Office of Tax and Revenue

The District exempts from sales tax purchases made for resale, but a vendor may accept this exemption only when the purchaser provides a valid certificate of resale. The burden of proving that a sale is for resale falls on the vendor unless the vendor timely takes from the purchaser a certificate that the property is purchased for resale. Without such a certificate taken prior to or at the time of the sale, all receipts are deemed taxable.

Statutory Framework

D.C. Code § 47-2010 establishes a presumption that all receipts from sales of tangible personal property and services are subject to tax until the contrary is established. Unless the vendor has taken from the purchaser a certificate signed by and bearing the purchaser's name, address, and registration certificate number stating that the property or service was purchased for resale or is exempt under D.C. Code § 47-2005, the receipts from all sales are deemed taxable. If no certificate is furnished or obtained prior to the time the sale is consummated, the tax applies to the gross receipts therefrom as if the sale were made at retail.

Source: D.C. Code § 47-2010

What Qualifies for the Resale Exemption

A purchaser may give a certificate of resale when purchasing tangible personal property for the purpose of:

• Resale in the same form, or
• Incorporating the property as a material or part of other tangible personal property to be produced for sale by manufacturing, assembling, processing, or refining.

If a person purchases tangible personal property for purposes other than those enumerated in the certificate of resale, the certificate cannot be used, and the purchaser must either reimburse the vendor for the sales tax or file a return and pay the use tax as a consumer or user.

Source: 9 DCMR § 414.1; 9 DCMR § 414.6

Certificate Content and Form Requirements

The certificate of resale must:

• State the purpose for which the property is purchased,
• Show the purchaser's certificate of registration number,
• Be signed and dated by the purchaser, and
• Bear the purchaser's name and address.

Each certificate of resale must be preserved by the vendor and serves as the authority for the vendor not to add reimbursement for the tax to the sales price of the property.

Source: 9 DCMR § 414.2; 9 DCMR § 414.5; D.C. Code § 47-2010

Current Certificate Process and Annual Renewal

Effective November 1, 2017, the Deputy Chief Financial Officer only recognizes certificates of resale on forms or copies of forms authorized by the District of Columbia Office of Tax and Revenue. Authorized resale certificates must be obtained through an annual process from OTR at MyTax.DC.Gov using Form OTR-368. As of November 1, 2017, an authorized resale certificate is valid only for a period of one year and includes an expiration date. Exemption certificates are nontransferable and are valid for use only by the person or entity to which the certificate has been issued.

Source: OTR Exemptions — Audit Division

Vendor Reliance in Good Faith

The burden of proving that a sale of tangible personal property or taxable services is not a sale at retail is upon the vendor, unless the vendor timely accepts in good faith a certificate from the purchaser that the sale is exempt from tax or that the property is purchased for resale. Except in cases where a specific exemption certificate is furnished or a contractor furnishes a contractor's exempt purchase certificate, a vendor must collect reimbursement for the tax unless the purchaser has furnished a certificate of resale.

Source: OTR Exemptions — Audit Division; 9 DCMR § 414.9

The District of Columbia exempts from sales tax most sales of food and drink for home preparation or consumption, but excludes from the exemption both food or drink prepared for immediate consumption and soft drinks. The exemption is tied to the federal definition of "eligible foods" under the Supplemental Nutrition Assistance Program (SNAP).

Statutory Framework

D.C. Code § 47-2001(n)(2)(E) excludes from the definition of "retail sale" (and thus from taxation) sales of food or drink that constitute "eligible foods" as defined in 7 CFR § 271.2, or food purchased for animal ingestion, regardless of whether the food is actually purchased with SNAP benefits. However, two categories are carved out and remain taxable: (1) food or drink prepared for immediate consumption, and (2) soft drinks.

The District's approach incorporates by reference the federal SNAP "eligible foods" standard, which generally means food products sold for human consumption (other than prepared foods, alcohol, tobacco, and nonfood items). By adopting the federal definition, the District effectively exempts staple grocery items—meats, dairy, bread, cereals, fruits, vegetables, and most packaged foods—when sold for home consumption.

What Qualifies for the Exemption

Food or drink sold for home preparation or consumption is exempt when it:

• Constitutes an "eligible food" under the federal SNAP definition (7 CFR § 271.2),
• Is not prepared for immediate consumption as defined in D.C. Code § 47-2001(g-1), and
• Is not a soft drink.

To qualify for the exemption at a mixed-use retailer (one that sells both groceries and prepared food), the District regulation requires that food and drink sold for home preparation or consumption be sold in the same form, quantities, and packaging as is commonly sold in grocery-type stores. This regulatory requirement ensures that the exemption applies to traditional grocery store sales of unprepared foods, not to restaurant-style or convenience-oriented sales.

What Remains Taxable

The exemption does not apply to:

1. Food or drink prepared for immediate consumption — D.C. Code § 47-2001(g-1) defines this category to include (but is not limited to):

• Food or drink in a heated state (except heated baked goods whose heated state is solely a result of baking);
• Sandwiches suitable for immediate consumption;
• Prepared salads;
• Salad bars;
• Party platters;
• Cold drinks dispensed in or with a cup or glass either by a retailer or on a self-service basis by the consumer;
• Frozen yogurt, ice cream, or ice milk sold in quantities of less than one pint;
• All food or drink served by, or sold in or by, restaurants, lunch counters, cafeterias, hotels, caterers, boarding houses, carryout shops, or like places of business.

Such prepared food is subject to sales tax. D.C. Code § 47-2002(a)(3) imposes a 9% tax on the gross receipts of sales of food or drink prepared for immediate consumption as defined in § 47-2001(g-1).

2. Soft drinks — D.C. Code § 47-2002(a)(8) imposes an 8% tax on the gross receipts from the sale of or charges for soft drinks, even if they would otherwise meet the SNAP eligible-foods definition.

3. Alcoholic beverages — D.C. Code § 47-2002(a)(3A) imposes a 10.25% tax on spirituous or malt liquors, beers, and wine sold for consumption off the premises where sold (not including sales by certain alcoholic beverage licensees).

Mixed-Use Retailers

The District regulation at 9 DCMR § 442.2 states: "For a business that sells both food and drink for home preparation or consumption and food and drink for immediate consumption, only those foods and drinks sold for home preparation or consumption shall be exempt from District sales tax only when sold in the same form, quantities, and packaging as is commonly sold in grocery type stores. All food or drink sold for immediate consumption is subject to the District sales tax."

This regulatory provision limits the exemption to grocery-style sales and ensures that retailers cannot avoid tax by characterizing restaurant-style or prepared-food sales as home-consumption groceries.

Source: D.C. Code § 47-2001(n)(2)(E) Source: D.C. Code § 47-2001(g-1) Source: D.C. Code § 47-2002(a)(3), (3A), (8) Source: 9 DCMR § 442.2 Source: 7 CFR § 271.2 Source: OTR Tax Guidance for Sales Tax Concerning Food

The District of Columbia applies destination-based sourcing for sales and use tax purposes. A sale is subject to District sales tax when the tangible personal property or taxable service is delivered into the District, regardless of where the seller is located or where the transaction is negotiated.

Statutory Framework — "Delivered Into the District"

The DC Code uses the phrase "delivered into the District" throughout Title 47, Chapter 20 to define the territorial scope of the sales tax. The economic-nexus threshold statute, for example, imposes collection obligations on remote sellers that have "more than $100,000 of gross receipts from retail sales delivered into the District or made more than 200 separate retail sales delivered into the District" in the prior or current calendar year. This delivery-based standard establishes destination sourcing: the location where the buyer receives the property or service controls whether District sales tax applies, not the location of the seller or the place where title passes.

Source: D.C. Code § 47-2001(w)

Tangible Personal Property

For sales of tangible personal property, the tax applies when the property is delivered to a location within the District. If a seller ships or delivers goods to a District address, the sale is subject to District sales tax. If the same seller ships goods to an address outside the District, the sale is not subject to District sales tax (though the seller's home state or the destination state may impose its own tax). The economic-nexus definition's reference to "retail sales delivered into the District" encompasses both tangible personal property and taxable services.

Source: D.C. Code § 47-2001(w)

Services — Explicit and Implicit Delivery-Point Rules

The District taxes a narrower set of enumerated services than many states, including data processing, information services, telecommunications, property maintenance, security services, car washing, carpet and upholstery cleaning, and delivery services. The sourcing approach for these services follows delivery-into-the-District principles, though the Code's level of detail varies by service type.

For security services, the statute expressly provides that "application of the sales and use tax to charges for security services is controlled by the delivery point of the services." This language confirms that the tax applies where the security service is performed or its benefit is received, not where the service contract is signed or where the vendor is located. Armored car services also receive explicit sourcing treatment: the statute permits vendors to "reasonably apportion any charges for any out-of-state delivery component, including the apportionment of distance, time, or number of stops within and outside of the District."

Source: D.C. Code § 47-2001(n)(1)(U)

For delivery services, the Code includes in the definition of taxable sales "the sale of or charge for any delivery in the District for which a separate charge is made, except merchandise delivered for resale for which a District of Columbia certificate of resale has been issued or the delivery of any newspapers." The phrase "delivery in the District" confirms destination-based sourcing for delivery charges: if the delivery occurs in the District, the separately stated delivery charge is taxable.

Source: D.C. Code § 47-2001(n)(1)(Q)

For other taxable services—data processing, information services, property maintenance, car washing, and carpet and upholstery cleaning—the Code does not repeat the "delivery point" phrase. However, the economic-nexus definition's use of "retail sales delivered into the District" applies equally to sales of services and sales of tangible personal property, and the District's regulatory framework has consistently treated the location of service performance or benefit receipt as controlling.

Digital Goods

Digital goods—defined to include "digital audiovisual works, digital audio works, digital books, digital codes, digital applications and games, and any other otherwise taxable tangible personal property electronically or digitally delivered, whether electronically or digitally delivered, streamed, or accessed and whether purchased singly, by subscription, or in any other manner"—are taxable in the District. The statutory definition does not contain explicit sourcing language, but the economic-nexus framework's "delivered into the District" standard applies to digital goods in the same manner as tangible personal property. The District treats digital goods as delivered into the District when accessed, streamed, or used by a customer located in the District.

Source: D.C. Code § 47-2001(d-1) Source: D.C. Code § 47-2001(w)

No Intra-District Rate Variations

Because the District has no local jurisdictions that impose additional sales taxes, destination-based sourcing does not require distinguishing among multiple rates within the District. If the delivery address or service performance location is anywhere within the District of Columbia, the applicable rate is the uniform District rate (6.0% through September 30, 2026; 7.0% beginning October 1, 2026), except for specific categories subject to higher rates (restaurant meals at 9%, transient lodging at 10.20%, parking at 18%, off-premises alcoholic beverages at 10.25%, and soft drinks at 8%).

Use Tax Complement

The District's use tax, imposed at D.C. Code § 47-2202, complements the destination-based sales tax framework. The use tax applies to "the use, storage, or consumption in the District of any tangible personal property or service" purchased outside the District when no District sales tax was paid at the time of purchase. The use tax rate mirrors the sales tax rate and ensures that District residents and businesses cannot avoid the tax by purchasing property or services outside the District for in-District use.

Source: D.C. Code § 47-2202(a)

The District of Columbia exempts from sales tax a broad range of medical and pharmaceutical products, including all medicines, pharmaceuticals, and drugs whether or not sold on prescription, plus specified medical devices and durable medical equipment. These exemptions are among the most comprehensive in the United States.

Medicines, Pharmaceuticals, and Drugs — Prescription and Over-the-Counter

D.C. Code § 47-2005(14) exempts from sales tax "sales of medicines, pharmaceuticals, and drugs whether or not made on prescriptions of duly licensed physicians and surgeons and general and special practitioners of the healing art." The statutory language is categorical: the exemption applies to all qualifying medicines, pharmaceuticals, and drugs, regardless of whether a prescription is required. This means both prescription medications and over-the-counter (OTC) medicines are exempt when they meet the regulatory definition.

The District regulation at 9 DCMR § 449.2 defines "medicines, pharmaceuticals, and drugs" for purposes of the exemption to mean "any of those items recognized in the Official United States Pharmacopoeia, Official Homeopathic-Pharmacopoeia of the United States, the Official National Formulary, or any supplement to any of these publications." The regulation further clarifies that "any substance or mixture of substances containing at least one (1) of the recognized medicines, pharmaceuticals, or drugs intended for use in the cure, mitigation, or prevention of disease in man or animals which is so prepared as to be adaptable for such use internally, or by physically applying the same to the man or animal externally in order to penetrate the skin shall be covered by the exemption."

The exemption does not apply to "any unmedicated substance, even though the substance is to be applied internally or externally." In other words, topical products, supplements, or other items that do not contain at least one recognized medicine, pharmaceutical, or drug are taxable.

Medical Devices and Durable Medical Equipment — Two Categories

The District exempts medical devices and durable medical equipment under two separate statutory provisions with different scope and prescription requirements.

Category 1 — Implants and Prostheses (No Prescription Required)

D.C. Code § 47-2005(15)(A) exempts:

• Bone screws, bone pins, pacemakers, and other articles permanently implanted in the human body to assist the functioning of any natural organ, artery, vein, or limb and which remain or dissolve in the body;
• Orthopedic devices designed to be worn on the person as a brace, support, or correction for the body structure, except orthopedic shoes and supportive devices for the foot unless they are required for the correction of a physical deformity;
• Artificial human eyes and their replacement parts;
• Artificial limbs for human beings and their replacement parts;
• Artificial hearing devices for human beings and their replacement parts;
• Mammary prostheses;
• Any appliance and related supplies necessary as a result of any surgical procedure by which an artificial opening is created in the body (ostomy supplies).

These items are exempt without a prescription requirement. The statute does not condition the exemption on a physician's order for items in this category.

Category 2 — Prescribed Durable Medical Equipment (Prescription Required)

D.C. Code § 47-2005(15)(B) exempts sales of:

• Wheelchairs, crutches, canes, quad canes, walkers;
• Hospital beds, bedside commodes, patient lifts, urinals;
• Respirators, oxygen tents, kits and inhalers;
• Hemodialysis devices, transcutaneous nerve stimulators; and
• "Any other device, apparatus, or equipment used to replace or substitute for any part of the human body, or used to assist the ill or people with disabilities in saving or prolonging life, or used to alleviate pain and suffering."

The Category 2 exemption applies only when the device, apparatus, or equipment is:

1. Sold to an individual for the personal use of that individual, and
2. Sold pursuant to written prescriptions or orders of duly licensed physicians and surgeons and general and special practitioners of the healing art.

The catch-all clause in Category 2 ("any other device, apparatus, or equipment used to replace or substitute for any part of the human body…") is potentially broad, but the prescription and personal-use requirements limit its scope. If the item does not fall within the enumerated list (wheelchairs, crutches, hospital beds, etc.) or the catch-all, and it also does not fall within Category 1 (implants, prostheses, etc.), it may be taxable even if medically necessary.

Scope Differences Between the Two Categories

The most important distinction between Category 1 and Category 2 is the prescription requirement. Category 1 items—implants, prostheses, artificial limbs, artificial eyes, artificial hearing devices, mammary prostheses, ostomy supplies, and orthopedic braces (other than foot-support devices not for physical deformity correction)—are exempt without a prescription. Category 2 items—wheelchairs, crutches, hospital beds, respirators, oxygen equipment, hemodialysis devices, and the catch-all category—require a written prescription or order from a licensed physician or healing-art practitioner and must be sold to an individual for personal use.

The statute does not define "personal use" or specify whether a caregiver, family member, or third-party purchaser acting on behalf of the individual may qualify for the exemption. The safe practice is to obtain and retain documentation showing the prescription, the individual end-user, and the purpose.

No Separate Exemption for Generic "Medical Supplies"

The District does not have a general exemption for medical supplies, first-aid supplies, or health-care consumables unless they fall within one of the enumerated categories above or qualify as medicines, pharmaceuticals, or drugs under the pharmacopoeia standard. Items such as bandages, gauze, antiseptics, thermometers, blood-pressure monitors, and similar supplies are taxable unless they contain a recognized medicine or drug or fall within the exempted device categories.

Source: D.C. Code § 47-2005(14) Source: D.C. Code § 47-2005(15)(A) Source: D.C. Code § 47-2005(15)(B) Source: 9 DCMR § 449.2 Source: 9 DCMR § 449.3 Source: OTR Tax Guidance — Medical Products

The Office of Tax and Revenue (OTR) must generally assess District of Columbia sales and use tax within 3 years after the return was filed. This period is extended to 6 years if the taxpayer omits more than 25% of the tax properly includible on the return. In cases of fraud, false returns with intent to evade, willful evasion attempts, or failure to file a return, OTR may assess tax at any time without limitation.

General Three-Year Period

Unless one of the extended or unlimited periods applies, D.C. Code § 47-4301(a) requires that "the amount of a tax imposed under this title shall be assessed within 3 years after the return was filed (whether or not the return was filed after the date due)." The statute of limitations begins to run on the date the return is actually filed. If a vendor files a return before the statutory due date, the return is deemed filed on the last day prescribed for filing for statute-of-limitations purposes, meaning the 3-year period begins on the due date, not the early filing date.

A proceeding in court for collection of the tax without assessment may not commence after the expiration of the 3-year period.

Six-Year Extended Period for Substantial Omissions

D.C. Code § 47-4301(d)(3) extends the assessment period to 6 years when the taxpayer omits from the return "an amount of tax properly includible on the return which exceeds 25% of the amount of the tax reported on the return." This provision applies to all taxes in Title 47 except income tax (Chapter 18), and expressly covers sales and use tax (Chapter 20).

The 6-year period applies when the tax itself is omitted by more than 25%—not gross receipts, not taxable sales, but the dollar amount of tax. For example, if a vendor reports $10,000 of tax on a return but should have reported $15,000 (a $5,000 omission), the omission is 50% of the reported amount, and the 6-year statute applies.

Unlimited Period for Fraud, False Returns, Evasion, and Failure to File

D.C. Code § 47-4301(d)(1) removes all time limits on assessment in four categories:

• (A) A false or fraudulent return with the intent to evade tax—A return that contains materially false information submitted with intent to evade the District's sales or use tax liability may be assessed at any time.

• (B) A willful attempt in any manner to defeat or evade tax—Conduct designed to evade the tax, whether through affirmative acts or omissions, removes the statute of limitations even if no return was filed or if a non-fraudulent return was filed.

• (C) Failure to file a return—If a vendor required to file a sales tax return fails to file at all, OTR may assess at any time. The statute does not begin to run until a return is filed. This applies to complete failures to file; merely filing a late return does not trigger the unlimited period—the general 3-year period applies, measured from the late filing date.

• (D) Filing a real property tax exemption application—This clause does not apply to sales and use tax; it is specific to real property tax exemptions.

When any of these four conditions exist, "the tax may be assessed, or a proceeding in court for the collection of the tax may begin without assessment, at any time."

Extension by Consent

Before the expiration of the applicable statute of limitations (whether 3 years, 6 years, or an extended period previously agreed to), OTR and the taxpayer may agree in writing to extend the assessment period. The period may be extended further by subsequent written agreements made before the expiration of the then-current extended period. This consent mechanism is commonly used during audits to allow OTR additional time to complete an examination without the pressure of an expiring statute.

Mayor-Executed Returns Do Not Start the Statute

D.C. Code § 47-4301(c) provides that "the execution of a return by the Mayor shall not start the running of the period of limitations on assessment and collection." When OTR prepares a return on behalf of a non-filing vendor (sometimes called a "jeopardy" or "deficiency" assessment), that OTR-prepared return does not trigger the 3-year statute. The unlimited assessment period for failure to file continues to apply unless and until the vendor itself files a return.

Interaction with Return Filing Date vs. Due Date

For purposes of the statute of limitations, a return filed before the last day prescribed for filing is considered filed on the last day. This means that if a monthly sales tax return is due on the 20th of the following month and the vendor files it on the 15th, the 3-year statute begins to run on the 20th (the due date), not the 15th. This rule prevents vendors from shortening the statute by filing early.

Collection Statute After Assessment

Once OTR has timely assessed sales or use tax, a separate 10-year collection statute of limitations applies under D.C. Code § 47-4302. The tax may be collected by levy or by a proceeding in court only if the levy is made or the proceeding is begun within 10 years after the assessment. This collection period may also be extended by written consent.

Source: D.C. Code § 47-4301 Source: D.C. Code § 47-4302

Statutory Question: Does a remote seller include sales made through a marketplace facilitator when calculating its $100,000 gross receipts or 200-transaction economic nexus thresholds for District of Columbia sales tax?

Legal Framework — Statute: D.C. Code § 47-2001(w)(1) defines the sales threshold for economic nexus as "gross receipts from retail sales delivered into the District" or "200 or more separate retail sales transactions delivered into the District" in the prior or current calendar year. It does not, on its face, specify whether that figure should include or exclude sales made through a marketplace facilitator.

Department Guidance — Marketplace FAQs: Per the Office of Tax and Revenue's (OTR) Marketplace Seller Frequently Asked Questions, OTR addresses this exact question. The FAQ states (as of June 2026):

"If all of your DC sales are made through a marketplace that is collecting and remitting on your behalf, you do not need to register or file District sales tax returns, even if your total DC sales, including those facilitated by the marketplace, exceed $100,000 or 200 transactions. However, if you make direct DC sales in addition to sales through a marketplace, you must count only your direct DC sales (not those made through a registered marketplace facilitator) toward the threshold for registration and collection."

Direct Answer: Remote sellers do not include sales made through a registered marketplace facilitator when calculating their economic nexus threshold for District of Columbia sales tax. Only direct sales by the remote seller count toward the $100,000 or 200-transaction requirement. Sellers who exceed the threshold solely because of marketplace-facilitated sales are not required to register or directly collect District sales tax for those marketplace sales.

Legal and Administrative Caution: This interpretation reflects both the plain language of OTR's Marketplace Seller FAQs and the administrative practice as of 2026. By contrast, some jurisdictions count all DC-addressed sales regardless of facilitator; DC does not. Marketplace facilitators themselves remain responsible for tax collection and remittance on all sales they facilitate to DC customers, regardless of the seller's nexus status.

Source: D.C. Code § 47-2001(w) Source: OTR — Marketplace Sellers FAQs

In the District of Columbia, special higher sales tax rates for restaurant meals, transient lodging (hotel rooms), and parking services apply based on where the product or service is actually delivered, furnished, or consumed—regardless of where the vendor is located or where the order is placed. This means that out-of-District vendors (including marketplace facilitators and third-party platforms) are required to collect DC’s special rates when their sales result in consumption or use within the District.

Statutory Basis for Sourcing — 'Furnished in the District'

• For transient lodging and meals/food for immediate consumption (including restaurant and bar sales), D.C. Code § 47-2202.01 imposes the 10.2% (lodging) and 10% (meals, rising to 10.25% for alcohol) taxes on receipts “from the sale of or charges for any room or rooms, lodgings, or accommodations furnished to transients by any hotel… in the District” and on “food or drink prepared for immediate consumption… furnished in the District.”
• For parking, D.C. Code § 47-2202.01 also imposes the 18% tax on receipts “from the sale of or charges for the parking, storing, or keeping of motor vehicles… in the District.” There is no requirement that the vendor have a physical presence in DC; the determining factor is where the room, meal, or parking is provided or consumed.

Remote and Marketplace Sales — Meals and Facilitated Delivery

• OTR Notice 2020-06 explicitly requires marketplace facilitators (such as third-party meal delivery platforms) to collect and remit the 10% (or 10.25% for alcohol) rate when restaurant meals or drinks are delivered into DC, irrespective of the facilitator’s or restaurant’s location. The Notice does not extend to parking or lodging, but the underlying statutory language ('furnished in the District') applies equivalently if the end use occurs in DC.

Application to Use Tax and Rates Table

• The published OTR rates table reflects that DC applies these higher rates to both sales tax and use tax when the relevant item is delivered or consumed in the District. There is no separate statutory sourcing provision for use tax, but the OTR table applies special use tax rates using the same location-of-consumption principle.

Caution/Practical Point

• For parking and hotel bookings via remote platforms (where the facility or room is located within DC), the special rate applies even if payment or reservation is handled out of state. There is no published OTR guidance precisely paralleling Notice 2020-06 for parking or lodging, but the statutory “furnished in the District” language is broadly applied.

Source: D.C. Code § 47-2202.01 Source: OTR Notice 2020-06 Source: OTR Tax Rates Table

Direct answer: Most dietary supplements, including vitamins, protein powders, herbal preparations, and nutritional aids, are exempt from District of Columbia sales tax when sold for home consumption, provided they qualify as “food or drink” under the District’s SNAP-based definition. Supplements do not qualify for the exemption for medicines/drugs unless they meet strict pharmacopoeia-recognition standards; in practice, most common supplements are exempt only as food.

Why:

• DC law (D.C. Code § 47-2001(n)(2)(E)) exempts “eligible foods” as defined by federal SNAP (7 CFR § 271.2), and the local definition in D.C. Code § 47-2001(g) includes vitamins and “food or drink consumed for taste or nutritional value.”
• OTR’s official Tax Guidance (an authoritative government publication) concurs: “Vitamins and nutritional food supplements, except those prepared for immediate consumption, are not subject to sales tax.”
• Supplements marketed and sold as medicines/drugs are exempt only if they contain a substance recognized in the USP, National Formulary, or similar pharmacopoeia, and are intended for use in preventing or treating disease (9 DCMR § 449.2). Most over-the-counter supplements do not meet this test.
• Protein powders, drink mixes, and herbal remedies typically qualify as exempt “food” if sold in the same form, packaging, and quantities as grocery items, and not as prepared beverages in a restaurant or café setting.
• Supplements that do not meet the SNAP food definition (see 7 CFR § 271.2; e.g., products primarily marketed as cosmetics, some topicals, or non-nutritional meal replacements) do not qualify for the exemption and are generally taxable.

Source support: Source: D.C. Code § 47-2001(g) Source: D.C. Code § 47-2001(n)(2)(E) Source: D.C. Code § 47-2005(14) Source: 9 DCMR § 449.2 Source: OTR Tax Guidance: Food

Caution / review status: Not yet human confirmed. Special attention should be given to products that straddle food/drug/excluded categories; edge cases (such as supplements with drug claims, products not intended for nutritional use, or topicals) should be confirmed with the latest OTR publication, matrix, or binding ruling if ambiguity exists.

In the District of Columbia, late filings or late payments of sales and use tax invoke: (1) a failure‑to‑file penalty of 5 percent per month (or fraction thereof), up to 25 percent total (with abatement available for reasonable cause); (2) a failure‑to‑pay penalty of the same structure; (3) an accuracy-related (negligence) penalty of 20 percent of the underpayment; (4) a fraud penalty of 75 percent of the underpayment attributable to fraud; plus (5) interest at 10 percent per year, accruing daily, on unpaid tax and related penalties. Reasonable-cause abatement is available for failure-to-file and failure-to-pay penalties under § 47-4221; abatement for other penalties is not expressly addressed by statute.

Failure to File or Pay: A vendor that fails to file a sales or use tax return or pay by the due date is subject to a penalty of 5 percent of the unpaid amount for each month or fraction thereof during which the failure continues, up to a cumulative maximum of 25 percent. For both penalties, no penalty is imposed if the taxpayer shows that such failure was due to reasonable cause and not due to willful neglect. Source: D.C. Code § 47-4213

Negligence or Substantial Understatement: A penalty of 20 percent of the underpayment applies to any portion of a tax underpayment attributable to negligence or disregard of rules or substantial understatement, except to the extent a fraud penalty is imposed. Source: D.C. Code § 47-4211

Fraud: If any portion of an underpayment is attributable to fraud, a penalty of 75 percent of that underpayment is imposed, and the 20 percent negligence penalty does not apply to the same portion. Source: D.C. Code § 47-4212

Interest: Interest accrues on all unpaid tax, including penalties, at 10 percent per year. The statute specifies that interest accrues daily but does not use the term "compounded daily." Source: D.C. Code § 47-4201(d)

Abatement for Reasonable Cause: Reasonable cause abatement is available for failure-to-file and failure-to-pay penalties under D.C. Code § 47-4221, but there is no explicit provision for abating the negligence or fraud penalties for reasonable cause. Source: D.C. Code § 47-4221

Not yet human confirmed.

Direct answer: Remote sellers that exceed DC’s economic nexus thresholds ($100,000 in gross receipts or 200 separate retail sales annually delivered into the District) must register for District of Columbia sales tax—even if all their sales are exempt (e.g., sales for resale or of exempt items such as eligible food or medical products). The DC Office of Tax and Revenue requires all sellers meeting nexus thresholds to register and obtain a sales tax account/certificate, regardless of whether their sales are taxable or exempt.

Why:

• DC’s economic nexus rule applies based on total gross receipts or transaction count from DC deliveries, not just taxable sales. See D.C. Code § 47-2001(w): the definition encompasses all “retail sales delivered into the District.”
• The official OTR FAQ confirms that exempt sales (such as sales for resale to purchasers holding exemption certificates) are counted toward the threshold and that "any remote seller whose sales into DC exceed the threshold must register.”
• OTR guidance does not provide an exclusion from registration (or filing) for sellers that exclusively make exempt sales after exceeding the nexus threshold. Sellers are expected to file returns, which may reflect no tax due (“zero returns”); no blanket relief from registration or reporting is provided for exempt‑only sellers.

Source support:

• D.C. Code § 47-2001(w): defines economic nexus and does not limit threshold measurement to taxable sales only.
• OTR Sales and Use Tax FAQs: expressly states that exempt sales count toward the nexus threshold and that all sellers meeting the threshold must register.

Caution / review status: Not yet human confirmed. Current OTR guidance controls unless/until a statutory or regulatory exemption is made explicit. If OTR modifies its policy to exempt exempt‑only sellers from registration/filing, this section will require immediate update.

Source: D.C. Code § 47-2001(w) Source: OTR Sales and Use Tax FAQs, June 2026.

Direct answer: The District of Columbia does not accept out-of-state resale certificates, multi-jurisdictional (multi-state) resale certificates, or the Streamlined Sales and Use Tax Agreement (SSUTA) certificate for purposes of exempting drop-shipment sales delivered into DC. Only a completed, active DC Certificate of Resale (Form OTR-368) listing a valid DC sales tax registration number is recognized for sales for resale—including the wholesale leg of a drop shipment. If the purchaser is not registered for DC sales tax and cannot provide Form OTR-368 with a DC registration number, the sale is taxable. This requirement applies even if the remote purchaser is registered in another state.

Why: Under D.C. Code § 47-2010 and District regulation (9 DCMR § 414.2, 414.6), a sale is presumed taxable unless the seller obtains—at or before the time of sale—a proper DC certificate of resale. The certificate must contain the purchaser's District of Columbia registration number. DC does not recognize out-of-state resale certificates, multi-jurisdictional certificates, or SSUTA certificates in lieu of its own form. The OTR guidance for exemptions and the resale certificate process reinforces that only forms issued via the MyTax.DC.gov portal with a valid DC-issued sales tax number are accepted. There is no published DC provision that creates a "drop shipment" or remote-purchaser exception to this rule.

Source support:

• D.C. Code § 47-2010 establishes the vendor's obligation and the evidence required to substantiate sales for resale.
• 9 DCMR § 414.2/414.6 provides that the certificate must contain a DC registration number and must be on a DC-authorized form.
• The OTR Exemptions — Audit Division page specifies that Form OTR-368, generated annually by the DC Office of Tax and Revenue and referencing a DC sales tax number, is the only valid certificate. There is no provision accepting out-of-state or multi-state resale certificates.

Caution / review status: Not yet human confirmed. No DC primary-source guidance has been located that creates an explicit exception for drop shipments or remote purchasers; practice is as stated unless and until OTR publishes new guidance.

Source: D.C. Code § 47-2010 Source: 9 DCMR § 414.2 Source: OTR Exemptions — Audit Division

In the District of Columbia, penalties for late filing or late payment of sales and use tax are imposed starting from the first dollar of unpaid tax—there is no statutory minimum penalty amount or de minimis threshold below which penalties are automatically waived. The failure-to-file and failure-to-pay penalties are each calculated as 5 percent of the unpaid tax for each month or fraction thereof, up to a maximum of 25 percent. The statutory language in D.C. Code § 47-4213 is categorical and does not set a dollar floor for penalty imposition: any unpaid amount, regardless of size, is subject to these penalties unless abated for reasonable cause.

Official guidance from the Office of Tax and Revenue (OTR) sales and use tax FAQs aligns with the statute, describing a 5% per month penalty (up to 25% maximum) applying to any balance due, with no mention of or authority for an automatic waiver based on low-dollar balances. There are no published OTR bulletins, regulations, or tax forms that create an automatic penalty waiver for small balances or expressly exclude nominal underpayments from penalty liability. All late returns and payments are potentially subject to penalty unless successfully abated for reasonable cause under D.C. Code § 47-4221; abatement is not granted automatically based on the amount due, but only on qualifying circumstances.

Source: D.C. Code § 47-4213 Source: OTR Sales and Use Tax FAQs

Not yet human confirmed.