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 must file a sales tax return on or before the 20th day of each calendar month for sales made during the preceding month. The Mayor may permit or require returns for other periods.

OTR assigns filing frequency based on the vendor's tax liability per period: monthly (liability ≥$1,201), quarterly (liability $201–$1,200), or annual (liability ≤$200). Returns and payments are due by the 20th of the month following the end of the reporting period; for annual filers, the due date is October 20th.

Source: D.C. Code § 47-2015 Source: OTR Sales Tax TDI FAQs

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