Title 9 DCMR — TAXATION AND ASSESSMENTS

9-1 INCOME AND FRANCHISE TAXES

9 DCMR § 100 GENERAL PROVISIONS

100.1 The provisions of this chapter are adopted under authority of § 1 of Title 16 of the "District of Columbia Income and Franchise Tax Act of 1947," 61 Stat. 359 (Also referred to in this chapter as the "Act"), as amended by § 601 of Title 6 of the "District of Columbia Revenue Act of 1956," 70 Stat. 71 (D.C. Code §§ 47-1816.1 and 47-1816.2).

100.2 The provisions of this chapter shall be in effect with respect to taxable years commencing on and after January 1, 1956.

100.3 References in this chapter to titles or sections of the Act, unless otherwise specified, are to subdivisions of the "District of Columbia Income and Franchise Tax Act of 1947," as amended.

100.4 It is the purpose of the Act, as amended, to impose the following taxes in accordance with the definitions in Title 1 of the Act:

(a) An income tax upon the entire net income of every resident and every resident estate and trust; and

(b) A franchise tax upon every corporation and unincorporated business for the privilege of carrying on or engaging in any trade or business within the District, and of receiving such other income as is derived from sources within the District, except those corporations and unincorporated business which are specifically excluded.

100.5 The words and terms defined in § 4 of Title 1 of the Act, and elsewhere in the Act, shall have the same meaning as defined in the Act when used in this chapter.

100.6 The term "Deputy Chief Financial Officer" means the Deputy Chief Financial Officer of the Office of Tax and Revenue ("Office"), or his or her designee, agent, or representative.

100.7 The reference in § 2 of Title III of the Act to obligations or securities of the United States, its agencies or instrumentalities relates only to obligations and securities which possess all of the following characteristics:

(a) Are evidenced by a written document;

(b) Contain a binding promise by the United States to pay specified sums on specified dates;

(c) Authorized specifically by the Congress of the United States pledging the full faith and credit of the United States; and

(d) Provide for the payment of interest.

100.8 Obligations or securities of the United States, its agencies or instrumentalities meeting the criteria set forth in § 100.7 shall include, but are not limited to, the following items:

(a) U.S. Savings Bonds;

(b) U.S. Treasury Notes; and

(c) U.S. Treasury Bills.

100.9 Obligations or securities of the United States, its agencies or instrumentalities which shall not be exempt from taxation include, but are not limited to, the following:

(a) Interest on federal tax refunds; and

(b) Obligations merely guaranteed but not issued directly by the U.S. Government, such as Federal National Mortgage Association (Fannie Mae) and certain Government National Mortgage Association (Ginnie Mae) securities.

100.10 The burden of showing that an obligation or security of the United States, its agencies or instrumentalities (the interest from which has been excluded from gross income) meets the criteria contained in § 100.7 shall be on the taxpayer claiming the exclusion.

100.11 In the event of a change in tax rates during a taxable year and if a law does not otherwise provide, the following shall apply:

(a) A computation shall be made by applying to the taxable income for the entire taxable year the rate for the period within the taxable year before the effective date of change;

(b) Another computation shall be made by applying to the taxable income for the entire taxable year the rate for the period within the taxable year on or after such effective date; and

(c) The tax imposed is the sum of the following:

(1) An amount which bears the same ratio to the tax computed in paragraph (a) of this subsection as the number of days in the taxable year; and

(2) An amount which bears the same ratio to the tax computed in paragraph (b) of this subsection as the number of days in such period bears to the number of days in the taxable year.

100.12 To improve the collection of delinquent tax debt pursuant to the District of Columbia Code § 47-4471, the Deputy Chief Financial Officer of the Office of Tax and Revenue or his or her designee, agent, or representative may levy upon the property or rights to property of a delinquent taxpayer as held by any office of the District of Columbia Government. The taxpayer shall be notified of the intent to make such levy pursuant to D.C. Code § 47-4471(d)(1) and (2). Such levy shall be continuous from the date the levy is first made until the levy is released in the same manner as a levy on the salary or wages of a delinquent taxpayer pursuant to D.C. Code § 47-4471(e). The levy served on the District Government office upon the property or rights to property of the delinquent taxpayer may be transmitted by paper or electronically.

History

• SOURCE: Commissioner's Order 56-1431 effective July 24, 1956; as amended by Regulation No. 71-6 effective February 25, 1971, 17 DCR 567 (March 8, 1971), 16 DCRR §§ 300.1, 301.1 through 301.3 and 309.1; by Final Rulemaking published at 32 DCR 1354 (March 8, 1985); by Final Rulemaking published at 32 DCR 1776 (March 29, 1985); as amended by Final Rulemaking published at 59 DCR 10674 (September 7, 2012).
• EDITOR'S NOTE: The Office of the Chief Financial Officer of the District of Columbia published a Notice of Public Interest at 44 DCR 2345 (April 18, 1997) changing the name of the "Department of Finance and Revenue" to the "Office of Tax and Revenue."

9 DCMR § 102 EXEMPT ORGANIZATIONS

102.1 The responsibility for establishing the right to exemption from the tax shall rest upon the organization claiming the exemption.

102.2 An organization shall not be exempt merely because it is not organized and operated for profit.

102.3 The granting of exempt status to any organization shall not relieve that organization of its responsibility to withhold tax from its employees as required by law.

102.4 Franchise tax exemptions shall only be valid for the period stated on the franchise tax exemption certificate. An exemption will only be allowed for a period during which the exemption certificate is unexpired for the entirety of the relevant filing period.

102.5 Exemptions Applications for Exempt Organizations

An entity exempt from income and franchise taxes under D.C. Official Code § 47-1802.01 shall obtain from the Deputy Chief Financial Officer a certificate of exemption stating that the institution is entitled to the exemption. No exemption shall be allowed without a valid exemption certificate.

Beginning with exemption certificates issued on or after June 1, 2018, exemption certificates issued to exempt organizations, except as provided in Subsection 102.5(c), shall be valid only for a period of up to five (5) years from the date issued.

Beginning with exemption certificates issued on or after June 1, 2018, exemption certificates issued to an exempt entity organized exclusively for religious purposes shall be valid only for a period of up to ten (10) years from the date issued.

Exemption certificates issued to exempt organizations prior to June 1, 2018, shall expire upon notice by the Office of Tax and Revenue.

In order to receive an exemption certificate, an exempt organization shall follow the Office of Tax and Revenue’s electronic application process.

All exemption applications filed by exempt organizations shall include, but are not limited to, the following information:

Taxpayer ID Number;

Name;

Address;

Sales Tax Account Number;

NAICS Code;

Federal Exemption Status;

Proof of IRS exemption (e.g., IRS Determination Letter or Application for Recognition of Exemption);

Organizational details; and

Articles of Incorporation.

History

• SOURCE: Commissioner's Order 56-1431, effective July 24, 1956, codified at 16 DCRR §§ 302.1 and 302.2; as amended by the Third Amendment to the Revenue Act of 1975 Act, effective April 9, 1976 (D.C. Law 1-61; 22 DCR 4283 (February 17, 1976)); as amended by Final Rulemaking published at 30 DCR 1922 (April 29, 1983); as amended by Final Rulemaking published at 30 DCR 3263 (July 1, 1983); as amended by Final Rulemaking published at 32 DCR 1354 (March 8, 1985); as amended by Final Rulemaking published at 65 DCR 8411 (August 10, 2018); as amended by Final Rulemaking published at 66 DCR 5396 (April 26, 2019). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 102

9 DCMR § 103 EXEMPT ACTIVITIES OF CIVIC LEAGUES AND ORGANIZATIONS

103.1 The Act [§ 1(f) of Title 2] exempts the following:

(a) Civic leagues or organizations not organized for profit but operated exclusively for the promotion of social welfare; and

(b) Local associations of employees, the membership of which is limited to the employees of a designated person or persons in a particular municipality, and the net earnings of which are devoted principally to charitable, educational, or recreational purposes within the District.

103.2 One of the principal requirements for exemption under § 103.1(b) is that the net earnings of the organization shall be chiefly devoted to the favored purposes within the District in order that the organization may be entitled to exemption under § 1(f).

103.3 The fact that some of the activities and benefactions of an organization devoted to charitable, educational, or recreational purposes may reach beyond the confines of the District, shall not deprive the organization of exemption under § 1(f) if its net earnings are principally devoted to those purposes within the District.

103.4 [Repealed]

History

• SOURCE: Commissioners' Order 56-1431 effective July 24, 1956, 16 DCRR § 302.3; as amended by the Third Amendment to the Revenue Act of 1975 Act, D.C. Law 1-61 22 DCR 4283 (February 12, 1976); by Final Rulemaking published at 30 DCR 1922 (April 29, 1983); by Final Rulemaking published at 32 DCR 1354, 1355 (March 8, 1985); as amended by Final Rulemaking published at 55 DCR 12496 (December 12, 2008).

9 DCMR § 104 SALARY DEDUCTIONS: UNINCORPORATED BUSINESSES

104.1 Unincorporated businesses not exempt from taxation shall be allowed an aggregate reasonable salary allowance for services rendered by the individual owners or members actively engaged in the conduct of the business. The salary allowance shall in no event exceed thirty percent (30%) of the District net income of the business computed without benefit of this allowance.

104.2 In determining a reasonable salary allowance, fees paid to independent management or collection entities for management services performed on behalf of the unincorporated business shall be considered.

104.3 Any amount taken as a salary allowance deduction by an unincorporated business shall be apportioned to the owners or members in the same ratio as the net income of the business is apportioned for federal income tax purposes.

History

• SOURCE: Commissioners' Order 56-1431 effective July 24, 1956, 16 DCRR § 303.1; as amended by Final Rulemaking published at 30 DCR 1922, 1923 (April 29, 1983); and by Final Rulemaking published at 32 DCR 1354, 1355 (March 8, 1985).

9 DCMR § 105 GENERAL REQUIREMENTS FOR FILING TAX RETURNS (INCLUDING ELECTRONIC [INTERNET] FILING)

105.1 All returns required under Title 5 of the Tax Clarity Act of 2000 (hereinafter ‘the Act’) shall be filed on the forms and in the manner prescribed by the Deputy Chief Financial Officer.

105.2 Each return filed shall be signed by the taxpayer, either under oath or otherwise, as the Deputy Chief Financial Officer shall prescribe in the form of return.

105.3 The Act requires every individual who is a resident of the District, as defined in the Act, to file a return without being called upon to do so, whenever one or more of the following criteria apply:

(a) Gross income for the taxable year, if single or married and not living with spouse, exceeds seven hundred fifty dollars ($ 750) plus the applicable zero bracket amount specified in § 4(z) of Title 1 of the Act;

(b) Gross income for the taxable year, if married and living with spouse, exceeds one thousand five hundred dollars ($ 1,500) plus the applicable zero bracket amount specified in § 4(z) of Title 1 of the Act; Provided, that if such persons elect to file separate returns, the gross income of each spouse exceeds the sum of his or her personal exemptions; or

(c) Gross sales or gross receipts from any trade or business (other than an unincorporated business subject to tax under Title 8 of the Act) exceeds five thousand dollars ($ 5,000), regardless of the amount of the person's gross income.

(d) [REPEALED] 30 DCR 1255 (March 18, 1983).

105.4 If a deduction is claimed for household and dependent care services, married persons shall not be required to file a joint District income tax return.

105.5 Married persons who do not file a joint return and who claim the deduction pursuant to § 105.4 shall file separate District income tax returns on a single form prescribed by the Deputy Chief Financial Officer.

105.6 In determining whether an individual has maintained a place of abode in the District for one hundred eighty-three (183) days, temporary absences from a District residence (i.e., vacations, hospitalization, business trips, and the like shall be considered as periods of District residency.

105.7 - 105.9 [RESERVED]

105.10 Administration of Electronic [Internet] Filing: The following procedures and criteria are to be used by taxpayers in order to file and pay taxes by electronic funds transfer methods.

105.11 Electronic Filing Process Regulations shall apply to all taxpayers subject to filing any tax return, declaration, or statement as specified in the regulations, notices, letters and forms listed in Paragraph 105.10; Electronic Filing Process Regulations shall also apply to the requisite payment requirements under authority granted by D.C. Official Code.

(a) These electronic filing process regulations shall apply to:

(1) A third party bulk filer who must transmit all payments and tax data electronically by the prescribed due date. This can be done by means of the Electronic Taxpayer Service Center (eTSC) or through an Automated Clearing House (ACH) credit transfer. A third party bulk filer is a person or company who collects taxes for another taxpayer for the purpose of filing returns and depositing withheld taxes, or who files returns and makes payments for multiple taxpayers.

(2) Taxpayers located in the District as well as taxpayers located outside the District who are required to file District tax returns described in this section, or in Section 105.10.

(3) Certain taxpayers filing certain tax returns where the payment will exceed $5,000, and to other taxpayers as required or permitted under D.C. Official Code.

(b) Taxpayers subject to these regulations will have the option to select between/among the methods of filing and payment listed in regulations, notices or forms published by OTR, e.g., currently, there is a choice between electronic PC-based filing or an ACH interface.

(c) A taxpayer that is required to remit payments by electronic funds transfer shall initiate the transfer so that the tax due is deposited to the designated depository account on or before the date that the tax is due. If a tax due date falls on a day other than a business day, the deposit by electronic funds transfer is due on the first business day thereafter.

(d) A taxpayer that is required to remit payments by electronic funds transfer and who is unable to make a timely payment because of system failures within the banking system/ACH interface that are beyond the taxpayer's control will not be subject to penalty and interest for late payment.

(e) OTR and the Treasurer will provide one or more methods for taxpayers that remit taxes by electronic funds transfer to verify and acknowledge that the payments have been received by the OTR. These verification and acknowledgement methods will be specified in the regulations, notices, and forms published pursuant to Paragraph 105.10.

(f) If a taxpayer does not make a payment of tax for a particular period, such taxpayer shall, on the nearest business day to the date on which the payment is discovered, make proper adjustment for such period by calling OTR to receive instructions for resolving the discrepancy. If the taxpayer error involves an underpayment of tax, interest shall be charged and penalties may apply.

105.12 The following Electronic Filing Acceptance Process shall apply under these regulations: on or after the 30th calendar day following the date on which this Rule is published in the D.C. Register, OTR shall, by registered, certified or other form of mailing selected by OTR, send a letter or notice to the taxpayers identified by OTR to be required (by statute or regulations) to file and pay electronically, formally advising the taxpayer of his responsibilities under the Program.

(a) Within 30 calendar days of the date of the OTR letter or notice referenced in section 105.12 above, a taxpayer required to participate in the electronic filing program will be asked to register for electronic filing and payment of certain taxes by logging on to a designated OTR Website to receive a "PIN" number or other form of customer identification authorizing the taxpayer to participate in the program. Currently, a taxpayer who registers with OTR will receive a User ID and Password in separate e-mails. The User ID and Password allow taxpayers 24-hour access to the OTR Electronic Filing System.

(b) A taxpayer required to participate in the program shall file its return and make its first payment of tax on or before the designated due date specified on the tax form, or no later than 60 calendar days following the receipt by the taxpayer of the notice.

105.13 [REPEALED]

105.14 For taxable years beginning after December 31, 2024, the following persons required to file a return with the Chief Financial Officer shall submit to the District with such return an electronic copy of such person’s federal income tax return, including any schedules or other information provided to the Internal Revenue Service, for the corresponding tax year or period:

Individuals who are single or married filing separately with gross income exceeding $500,000 for the taxable year, or who are married filing jointly, registered domestic partner filing jointly, married filing separately on a combined return or registered domestic partners filing separately on a combined return with gross income exceeding $1,000,000;

(b) Corporations with gross income for the taxable year exceeding $2,500,000 worldwide, and $50,000 apportioned to the District;

(c) Unincorporated businesses with gross income for the taxable year exceeding $2,500,000 worldwide, and $50,000 apportioned to the District;

(d) Partnerships with gross income for the taxable year exceeding $2,500,000 worldwide, and $50,000 apportioned to the District;

(e) Fiduciaries of an estate or trust with gross income for the taxable year exceeding $1,000,000; or

(f) Corporations who are members of an affiliated group with gross income for the taxable year exceeding $2,500,000 worldwide, and $50,000 apportioned to the District.

105.15 - 105.98 [RESERVED]

105.99 DEFINITIONS - The following definitions apply to this section:

Electronic Funds Transfer - means and includes automated clearinghouse debit, automated clearinghouse credit, credit card approved for payment by OTR, or any other means recognized by OTR for the payment of taxes electronically.

(1) The taxpayer that makes payments by electronic funds transfer shall be responsible for all fees and processing costs related to the funds transfer, and

(2) OTR shall designate which credit cards may be used to remit tax payments. Such transfer shall be subject to all notices published at www.dc.gov under "Taxpayer Services."

(3) Currently, taxpayers can pay any taxes owed using a Discover/NOVUS, MasterCard, VISA, or American Express card by calling 1-800-2PAY-TAX [272-9829], and then entering 6000. This service is available 7-days-a-week, 24-hours-a-day. Taxes will be paid directly with the credit card processing vendor, Official Payments Corporation. The Office of Tax and Revenue will receive the credit card transaction from the vendor and immediately apply the payment to the taxpayer's account. Official Payments Corporation will charge taxpayers a 2.5% fee for this service. This fee is sent directly to the Official Payments Corporation and not to the District government.

Third Party Bulk Filer - a person or company who collects taxes for another taxpayer for the purpose of filing returns and depositing withheld taxes, or who files returns and makes payments for multiple taxpayers.

History

• SOURCE: Commissioners' Order 56-1431 effective July 24, 1956, 16 DCR § 303.1, 304.1, and 304.5(a); as amended by the Third Amendment to the Revenue Act of 1975 Act (D.C. Law 1-61; 22 DCR 4283 (February 12, 1976)); as amended by Final Rulemaking published at 30 DCR 1255 (March 18, 1983); as amended by Final Rulemaking published at 50 DCR 2864 (April 11, 2003); as amended by Final Rulemaking published at 61 DCR 2129 (March 14, 2014); as amended by Final Rulemaking published at 72 DCR 000912 (January 31, 2025). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 105

9 DCMR § 106 TIME AND PLACE FOR FILING TAX RETURNS

106.1 All returns of income for the preceding taxable year required to be filed under the provisions of the Act shall be filed with the Deputy Chief Financial Officer on or before the 15th day of April of each year; Provided, that returns made on the basis of a fiscal year which is not the same as the calendar year shall be filed on or before the fifteenth (15th) day of the fourth (4th) month following the close of the fiscal year; and Provided, further, that returns required to be filed for the preceding year under the provisions of Title 7 of the Act shall be filed on or before the 15th day of March in each year, except that such returns, if made on the basis of a fiscal year, shall be filed on or before the 15th day of the 3rd month following the close of the fiscal year.

106.2 If the last date for the filing of a return falls on a Saturday, Sunday, or a legal holiday, the last date for filing the return shall be the first business day following that Saturday, Sunday, or legal holiday.

History

• SOURCE: Commissioners' Order-56-1431 effective July 24, 1956, 16 DCRR § 304.6; as amended by Final Rulemaking published at 30 DCR 1255 (March 18, 1983); and by Final Rulemaking published at 32 DCR 1354, 1355 (March 8, 1985).

9 DCMR § 107 TAX RETURNS OF UNINCORPORATED BUSINESSES

107.1 Returns shall be filed by every unincorporated business engaging in or carrying on any trade or business within the District or receiving income from sources within the District having a gross income of more than twelve thousand dollars ($ 12,000) regardless of whether or not it has a net income.

107.2 For purposes of this section, the meaning of "gross income" shall be gross revenue from all District sources before deduction of cost of goods, expenses, and other allowable deductions permissible in the determination of net income.

107.3 The return of an unincorporated business shall be made by the taxpayer or the taxpayers liable for the payment of the tax.

107.4 The tax imposed under the Act may be assessed in the name of the unincorporated business or in the name or names of the person or persons liable for the payment of the tax, or both.

History

• SOURCE: Commissioners' Order 56-1431 effective July 24, 1956, 16 DCRR § 304.5(c); as amended by Final Rulemaking published at 30 DCR 1922, 1923 (April 29, 1983).

9 DCMR § 108 TAX RETURNS OF PARTNERSHIPS

108.1 Returns shall be filed by every partnership engaging in any trade or business or receiving income from sources within the District.

108.2 If a partnership is not required to file an unincorporated business return under certain conditions, it is not relieved from filing a partnership return as required by Title 5 of the Act; except that a partnership return, as such, shall not be required to be filed if the taxpayer files an unincorporated business tax return.

History

• SOURCE: Commissioners' Order 56-1431 effective July 24, 1956, 16 DCRR § 304.5(d).

9 DCMR § 109 CONSOLIDATED TAX RETURNS

109.1 District of Columbia affiliated group means an "affiliated group" as defined in § 1504 of the Internal Revenue Code of 1986, as amended (IRC). Generally, District of Columbia affiliated groups shall not include any corporation that does not have gross income derived from sources within the District and nexus to the District of Columbia. Members of an affiliated group that are exempt from District taxation cannot be included in the consolidated return.

(a) District of Columbia affiliated group may not include any corporation, which is a Qualified High Technology Company as defined in D.C. Official Code § 47-1817.01(5)(A) (a QHTC) and those corporations, described in IRC § 1504(b). A QHTC may opt out of status under D.C. Official Code § 47-1817.01(5)(A) and be eligible to be included in a District of Columbia affiliated group. See § 109.40.

(b) If a Qualified High Technology Company that has not made an election under § 109.40 ceases to be a Qualified High Technology Company, such corporation (and any successor of such corporation) may not be certified as a Qualified High Technology Company before the 61st month beginning after its first taxable year in which it ceased to be a Qualified High Technology Company. During this period, such corporation is not eligible to make an election under § 109.40.

(c) Each member of a District of Columbia affiliated group shall be jointly and severally liable for the taxes, interest and penalties of the District of Columbia affiliated group. If a corporation is a member of the District of Columbia affiliated group for a part of the year, then the corporation shall be liable for the tax liability attributed to that portion of the year that the corporation was a member of the District of Columbia affiliated group.

(d) The "gross income derived from sources within the District" requirement in D.C. Official Code § 47-1805.02(5)(D) is waived for a corporation that meets the following requirements:

(1) A member of a regulated industry whose revenue is determined by means of a rate-setting procedure by a federal government agency, but only where the regulatory requirements to which the industry is subject impose restrictions on the structure of the affiliated group,

(2) A member of an affiliated group as defined in § 1502 of the IRC, and

(3) In a trade or business in the District.

109.2 All members of a District of Columbia affiliated group must use the same accounting method and the same accounting period.

(a) Unless otherwise provided by these rules or inconsistent with the provisions of the D.C. Official Code, the consolidated taxable income for a District of Columbia consolidated return year shall be determined in the same manner and under the same procedures, including intercompany adjustments and eliminations, as are required by the federal consolidated return regulations.

(b) All intercompany transactions between and among members of a District of Columbia affiliated group will be eliminated in determining the District of Columbia apportionment factors.

(c) An intercompany transaction is a transaction between corporations that are members of the same District of Columbia affiliated group immediately before and after the transaction.

(d) Any deferred gain, loss or deduction from a prior transaction with a member of a District of Columbia affiliated group shall be recognized for District of Columbia purposes when the member subsequently ceases to be a member of that District of Columbia affiliated group or when the asset involved is transferred to a corporation which is not a member of District of Columbia affiliated group.

(e) All supplementary and supporting schedules filed with a District of Columbia consolidated return shall be prepared in columnar form. One column being provided for each corporation included in the consolidated return, with the parent corporation information reported in the first column. Supporting schedules for the consolidated return shall also include a column for totals of like items before adjustments are made, a column for intercompany eliminations and adjustments, and a column for totals of like items after giving effect to the eliminations and adjustments.

109.3 Each member of a District of Columbia affiliated group must have gross income in any amount derived from sources within the District of Columbia.

(a) In the case of a corporation that is a member of the District of Columbia affiliated group for a part of the taxable year, the District of Columbia consolidated return shall include the income of the corporation for only that part of the year that it is a member of the District of Columbia affiliated group. If the new member is an existing D.C. corporation and not a member of another District of Columbia affiliated group, a final short-year separate year return must be filed for the period prior to becoming a member of the affiliated group. If the new member was a member of another District of Columbia affiliated group, its taxable income or loss for the period prior to joining the new District of Columbia affiliated group must be included in the consolidated taxable income of its prior District of Columbia affiliated group. Correspondingly, if a member leaves a District of Columbia affiliated group, its taxable income or loss for the remainder of the taxable year shall be reported on a separate short-year tax return or included in the consolidated tax return of its new District of Columbia affiliated group, where permissible under these rules.

(b) District Taxable Income is computed as if a consolidated federal corporate income tax return was filed that included all Affiliates.

(c) The following are computed on a consolidated basis as if all Affiliates were a single corporation filing a District corporate income tax return:

(1) District adjustments and allocation of business income;

(2) Apportionment: Intergroup Transactions are eliminated when computing apportionment factors (See 9 DCMR §§ 109.20);

(3) Net Operating Loss;

(4) District Taxable Income is computed on a consolidated basis;

(5) District Franchise Tax;

(6) District Tax Credits; and

(7) Election and Revocation in accordance with 9 DCMR §§ 109.4 and 109.6.

109.4 In order to file a District of Columbia consolidated return; the members of a District of Columbia affiliated group must be part of the affiliated group that files a federal consolidated return pursuant to § 1501 of the IRC.

(a) If a group wishes to exercise its privilege of filing a consolidated return, such consolidated return must be filed not later than the last day prescribed by law (including extensions of time) for the filing of the common parent's return. Such consolidated return may not be withdrawn after such last day.

(b) The election made by the common parent is effective prospectively and only if accompanied by a written consent to the election signed by each member of the District of Columbia affiliated group. The completed written consent of all members shall be attached to the District of Columbia consolidated return for the taxable year for which the election is made.

(c) Election to file a consolidated return is binding to the District of Columbia affiliated group for the first year of election and for subsequent years as long as the District of Columbia affiliated group remains in existence, unless a written request for revocation is submitted to the Office of Tax and Revenue and the Office of Tax and Revenue grants permission to a group to discontinue filing consolidated returns.

(d) The making of a District consolidated return shall be upon the condition that all corporations which at any time during the taxable year have been members of the affiliated group consent to all the consolidated return regulations prescribed under Title 9 of the District of Columbia Municipal Regulations prior to the last day prescribed by law for the filing of such return. The making of a District consolidated return shall be considered as such consent.

(e) If an eligible corporation becomes a member of the District of Columbia affiliated group after the beginning of the District of Columbia consolidated return year or ceases to be a member of the District of Columbia affiliated group during the consolidated return year, two tax returns will be due for that taxable year. The District of Columbia consolidated return shall include amounts attributable to such corporation for the part of the year in which it was a member of the District of Columbia affiliated group. A separate return shall be filed and include the amounts attributable to such corporation for the short taxable year when it was not a member of the District of Columbia affiliated group.

109.5 In taxable years after the election, any corporation deriving gross income, in any amount, from District of Columbia sources that was not a member of the original federal affiliated group in the year of the election but is a member of the federal affiliated group in the current year shall be required to join the District of Columbia affiliated group.

(a) The new corporation shall be deemed to have waived any objection to the filing of the District of Columbia consolidated return by its consent, if any, to join in filing a District of Columbia consolidated return by the common parent of the District of Columbia affiliated group.

(b) The new member joining the District of Columbia affiliated group shall be required to consent to the election to file a District of Columbia Consolidated Corporation Franchise Tax Return. A written consent shall be attached to the District of Columbia consolidated return for the first taxable year in which the new member joins the District of Columbia affiliated group.

109.6 The election shall terminate automatically upon the revocation or termination of the federal consolidated election, and the common parent shall notify the Office of Tax and Revenue within thirty (30) days regarding the revocation or termination of the federal consolidated election.

(a) If the District of Columbia affiliated group wants to revoke the election in a subsequent tax year, the group must request in writing and receive written permission from the Office of Tax and Revenue. The request to discontinue filing a D.C. consolidated return must be made at least ninety (90) days before the due date (including any extension of time for filing) of the return.

(b) If the request for revocation or termination of District of Columbia consolidated election is denied by the Office of Tax and Revenue, the District of Columbia affiliated group may file a written protest and request a hearing within thirty (30) days from the denial date.

(c) If a corporation has ceased to be a member of District of Columbia affiliated group and if such cessation resulted from a bona fide sale or exchange of its stock for fair value and occurred prior to the date upon which any deficiency is assessed, the Office of Tax and Revenue may make an assessment and collect the deficiency from the former member.

109.7 If the District of Columbia affiliated group files a consolidated return for the first year of filing, it must make payment of estimated tax on a consolidated basis for subsequent years. The District of Columbia affiliated group is treated as a single corporation for purposes of D.C. Official Code 47-1812.14(a) (relating to payment of estimated tax by corporations) and D.C. Official Code 47-1812.14(b) (relating to underpayment of estimated tax by corporations).

(a) If separate returns are filed by the members of the District of Columbia affiliated group for the taxable year after receiving consent for discontinuance from Office of Tax and Revenue, the amount of any estimated tax payments with respect to a consolidated payment of estimated tax for such year will be credited against the separate tax liabilities of the members in any manner designated by the common parent which is reasonably satisfactory to the Office of Tax and Revenue. For example, the manner of allocation will be satisfactory to the Office of Tax and Revenue if it does not jeopardize the collection of the corporation franchise tax liability from such members.

(b) Supporting schedules shall be filed with the District of Columbia consolidated tax return for each member. The statement of gross income and deductions and other schedules required for each corporation shall be prepared and filed in columnar form so that the details of the items of gross income, deductions, and credits for each member may be readily ascertained. A column shall also be provided giving effect to any eliminations and adjustments. The items included in the column for eliminations and adjustments should be symbolized to identify contra items affected, and suitable explanations appended, if necessary. Similar schedules shall contain a columnar form of reconciliation of retained earnings for each corporation, together with a reconciliation of consolidated retained earnings. Consolidated balance sheets at the beginning and close of the taxable year of the group shall accompany the consolidated return prepared in a form similar to that required for other schedules. Transactions with a subsidiary which is not included as part of the District consolidated return shall not be considered as intercompany transactions for elimination purposes in computing the consolidated District taxable income for the return period.

109.8 Federal Taxable Income is computed as if a consolidated federal corporate income tax return was filed that included all Affiliates. Federal Treasury regulations under 26 Code of Federal Regulations § 1.1502 et seq. and interpretations thereof regarding intercompany transactions apply in determining the federal taxable income of a District consolidated group.

109.9 ALLOCABLE INCOME [Reserved]

109.10 The following adjustments may be made under these regulations:

(a) Nothing herein shall prevent the exercise of authority under D.C. Official Code § 47-1810.03 to distribute, apportion, or allocate income or deductions between or among corporations where such action is necessary in order to prevent evasion of taxes or clearly to reflect the income of any such corporation. OTR also has the authority to determine whether such method should be followed on a consistent basis, from year to year.

(b) The District may require that a consolidated return be filed under D.C. Official Code § 47-1805.02(D)(5)(C)(iv) for an affiliated group that is eligible but where an election to file a consolidated return has not been filed if the District determines that a consolidated return is necessary to prevent evasion of taxes or to clearly reflect the taxable income that is attributable to the business conducted in the District by the affiliated group.

109.11 - 109.19 [Reserved]

109.20 The three-factor apportionment requirements of D.C. Official Code § 47-1810.02(d) shall be taken into account by an affiliated group doing business within and without the District of Columbia. All members of an affiliated group which join in the filing of a District consolidated tax return shall be considered as one "person" to determine the portion of the consolidated net income earned within and without the District by the same method prescribed in the statute cited above. All intercompany transactions shall be eliminated in the determination of the apportionment factors.

(a) A single consolidated apportionment factor is constructed for the affiliated group. The property, payroll, and sales factors include the property, payroll, and sales for all members of the consolidated group. The consolidated apportionment factor constructed is then multiplied by the consolidated adjusted federal income to determine the adjusted federal income apportioned to the District of Columbia.

(b) The members of the affiliated group may not determine separate apportionment factors to apply to their portion of the consolidated adjusted federal income.

(c) The District property factor for the consolidated group shall be determined pursuant to D.C. Official Code § 47-1810.02(e) and 9 DCMR §§ 125 and 126.

(d) The District payroll factor for the consolidated group shall be determined pursuant to D.C. Official Code § 47-1810.02(f) and 9 DCMR §§ 125 and 127.

(e) The District sales factor for the consolidated group shall be determined pursuant to D.C. Official Code § 47-1810.02(g) and 9 DCMR §§ 125 and 128.

(f) Where all members of the consolidated group are subject to a special apportionment formula provided by D.C. Official Code § 47-1810.02(h), and approved by the Office of Tax and Revenue, the consolidated group will determine a single consolidated apportionment factor using the special formula. Where all members of the affiliated group are not subject to the identical special formula approved by the Office of Tax and Revenue, the special formula is not available to the affiliated group.

(g) Under D.C. Official Code § 47-1810.02(h), the following alternative methods may be requested or prescribed in respect to all or a part of taxpayer's business activity where necessary to fairly represent the extent of taxpayer's business activity in the District:

(1) Separate accounting;

(2) The exclusion of any one or more of the factors;

(3) The inclusion of one or more additional factors that will fairly represent the taxpayer's business activity in the District; or

(4) The employment of any other method to effectuate an equitable allocation and apportionment of the taxpayer's income.

(h) The amounts of the property, payroll, and sales of a partnership are attributable to the partners or members of the joint venture. A corporation that is a partner in a partnership must add its share of the property, payroll, and sales to its own apportionment factors, regardless of whether the partnerships are District of Columbia partnerships. The affiliated group should include a separate schedule to show the distribution to each partner.

(i) Apportionment factors are subject to the adjustments set out in § 109.10, if necessary to clearly reflect income or to prevent the evasion of tax.

109.21 - 109.29 [Reserved]

109.30 In computing the net income of the consolidated group, there shall be allowed a deduction for the consolidated net operating loss, in the same manner as allowed under IRC §§ 172 and 1502 and the federal income tax regulations thereunder and D.C. Official Code Section 47-1803.03(a)(14).

(a) Since an affiliated group filing a District consolidated return often does not include all the members included in the federal return, the net operating loss deduction is limited to the amount of deduction that would otherwise be allowed for federal income tax purposes had the federal return been filed including only the District of Columbia entities for the tax year involved. The federal consolidated return must be adjusted to reflect only District-source losses.

(b) Each member of a District of Columbia affiliated group shall have its own net operating loss deduction (before apportionment) for loss years prior to 2000 and D.C. apportioned net operating loss deduction (after apportionment) for loss years 2000 and thereafter where:

(1) such member filed a separate District of Columbia franchise tax return for years 2000 and thereafter, or

(2) such member was included in a different District of Columbia affiliated group for years 2001 and thereafter.

(c) The following is an example of the application of § 109.30(b):

Corporation A files a return on separate company basis for tax year 2000 and has a D.C.-apportioned net operating loss of $ 50,000 to be carried forward to subsequent years. For taxable year 2001, Corporation A joins with Corporation B to file a consolidated return. Corporation A utilizes only $ 30,000 of its $ 50,000 D.C.-apportioned net operating loss from taxable year 2000 to the extent of its total taxable income of $ 30,000 for taxable year 2001.

Tax Year

2001

Corporation

A

Corporation

B

Consolidated

Income

Total taxable income before apportioned NOL deduction

$ 30,000

$ 80,000

$ 110,000

Less apportioned NOL deduction

(30,000)

(30,000)

Total taxable income

$ 80,000

Carryover to 2002

($ 20,000)

(d) If the District of Columbia affiliated group has a consolidated net operating loss carry forward from prior taxable years, the consolidated net operating loss of that District of Columbia affiliated group shall be carried forward and utilized by such District of Columbia affiliated group to the extent that such District of Columbia affiliated group has apportioned District of Columbia taxable income in future years.

(e) The following is an example of the application of § 109.30(d):

Tax Year

2001

Corporation

M

Corporation

N

Consolidated

Income

Total taxable income before apportioned NOL deduction

$ 30,000

($ 80,000)

($ 50,000)

Tax Year

2002

Corporation

M

Corporation

N

Consolidated

Income

Total taxable income before apportioned NOL deduction

$ 50,000

($ 20,000)

$ 30,000

Less apportioned NOL deduction

(30,000)

Total taxable income

$ -0-

Carryover net operating loss carry forward to 2003 and be beyond

($ 20,000)

(f) The Separate Return Limitation Year (SRLY) provisions of IRC § 172 and IRC § 1502, and the federal income tax regulations thereunder, shall apply in those cases where a member of a District of Columbia affiliated group which has a D.C.-apportioned net operating loss carryforward leaves the group and either files a separate District of Columbia franchise tax return or joins in the filing of a consolidated return with a different District of Columbia affiliated group. The prorated amount assigned to each member who incurred the loss is determined by the following formula:

(A/B) x C = D

A/B = Ratio based on one corporation's loss to total corporation losses

C = Consolidated net operating loss

D = Prorated amount of consolidated net operating loss assigned to the member.

(g) The following is an example of the application of § 109.30(f):

In 2001 Corporations B and C were members of a District of Columbia affiliated group which had Corporation A as the common parent. On January 1, 2002 Corporation B and Corporation C became members of a different District of Columbia affiliated group the common parent of which was Corporation D.

The ABC consolidated group had a consolidated loss of $ 20,000 for tax year 2001.

Tax Year

2001

Corporation

A

Corporation

B

Corporation

C

Consolidated

Income

Taxable income

$ 100,000

$ (80,000)

$ (40,000)

$ (20,000)

Calculation of Corporation B's share of Tax Year 2001 Consolidated Loss:

A = [80,000) for Corporation B

B = [120,000) for Corporation B and Corporation C

C = [20,000) for consolidated loss

($ 80,000/$ 120,000) x $ 20,000 = $ 13,333 loss assigned to Corporation B

Calculation of Corporation C's share of Tax Year 2001 Consolidated Loss:

A = [40,000) for Corporation B

B = [120,000) for Corporation B and Corporation C

C = [20,000) for consolidated loss

($ 40,000/$ 120,000) x $ 20,000 = $ 6,667 loss assigned to Corporation C.

For taxable year 2002, Corporation D, Corporation B and Corporation C have taxable income before NOL deduction of $ 80,000, $ 60,000, and $ 4,500, respectively. In this situation, Corporation B will utilize all of its $ 13,333 of D.C.-apportioned net operating loss carryforward from 2001, but Corporation C will utilize only $ 4,500 of its $ 6,667 D.C.-apportioned net operating loss carryforward from 2001 to the extent of its 2002 taxable income of $ 4,500.

The DBC consolidated group has a consolidated loss of $ 17,833 for the tax year 2002.

Tax Year

2002

Corporation

D

Corporation

B

Corporation

C

Consolidated

Income

Total taxable income before apportioned NOL deduction

$ 80,000

$ 60,000

$ 4,500

$ 144,500

Less apportioned NOL deduction

(13,333)

(4,500)

(17,833)

Total taxable income

$ 126,667

Carryover to 2003

($ 2,167)

(h) A surviving corporation in a merger is permitted to use District of Columbia net operating losses and District of Columbia apportioned net operating losses of a merged corporation, provided that the surviving corporation for federal tax purposes is permitted to use the federal net operating losses, if any, of the merged corporation. IRC §§ 381 and 382 apply with respect to the allowable loss.

109.31 - 109.39 [Reserved.]

109.40 Special "Opt-Out" Rule for Qualified High Technology Company (QHTC): A corporation that qualifies under D.C. Official Code § 47-1817.01.(5)(A) as a QHTC may elect to join in the filing of a consolidated tax return with its affiliated group. By electing to join in the filing of a consolidated return, the corporation that would otherwise qualify as a QHTC shall be deemed to opt-out of QHTC status on a permanent basis. Such corporation and its affiliated group shall, by joining in the filing of a consolidated return, be permanently estopped from qualifying for tax benefits under D.C. Official Code § 47-1817.

109.41 - 109.99 [Reserved.]

History

• SOURCE: Commissioners' Order 56-1431 effective July 24, 1956, 16 DCRR § 304.5(b); as amended by Final Rulemaking published at 28 DCR 5393 (December 18, 1981), incorporating text of Proposed Rulemaking published at 28 DCR 4112 (September 18, 1981); by Final Rulemaking published at 30 DCR 1922, 1923 (April 29, 1983); and by Final Rulemaking published at 32 DCR 1354, 1356 (March 8, 1985); as amended by Final Rulemaking published at 51 DCR 1688 (February 13, 2004), incorporating by reference the text of Proposed Rulemaking published at 49 DCR 8914 (September 27, 2002).

9 DCMR § 110 DISCLOSURE OF TAX RETURN INFORMATION

110.1 The Deputy Chief Financial Officer, in his or her discretion, may divulge or make known any information contained in, or related to, any report, application, license, or return required under the provisions of the Act, except the following:

(a) Information which may be contained in a return relating to the amount of income; or

(b) Any particular relating to the amount of income or the computation of the amount of income.

110.2 The Deputy Chief Financial Officer may divulge or make known information such as the following:

(a) The name and address of an individual or corporation;

(b) The names and addresses of corporate officers; and

(c) Other information which does not relate to the amount of income or particulars relating to the computation of income.

110.3 Notwithstanding the restrictions placed upon the Deputy Chief Financial Officer by this section, the Deputy Chief Financial Officer may furnish a complete copy of any income tax return to the following:

(a) Any officer of the District having a right to a copy of a tax return in his or her official capacity;

(b) The U.S. Internal Revenue Service of the Treasury Department of the United States; or

(c) The proper officer (or authorized representative) of any State imposing an income tax, if that State grants substantially similar privileges to the Deputy Chief Financial Officer.

110.4 Persons desiring to inspect applications and related financial documents of organizations which have been granted exemption shall direct their requests (in writing) to the Deputy Chief Financial Officer, Office of Tax and Revenue.

110.5 The Deputy Chief Financial Officer shall respond to the reports (in writing) not later than fifteen (15) calendar days from the date of receipt of the request. The

response shall set the time, place and condition(s) for inspecting the documents.

110.6 Reproductions for public use of any documents available for inspection pursuant to § 110.4 shall be prohibited.

History

• SOURCE: Commissioners' Order 56-1431 effective July 24, 1956, 16 DCRR § 304.7; as amended by Final Rulemaking published at 32 DCR 1354, 1356 (March 8, 1985).

9 DCMR § 111 INFORMATION RETURNS

111.1 Each person making payments of fixed or determinable income of six hundred dollars ($ 600) or more in the aggregate in any calendar year to a resident shall render a return of the payments for that year on or before February 28th of the following year, except as specified in §§ 111.2 and 111.9.

111.2 Payments of the following character, although amounting to six hundred dollars ($ 600) or more during a calendar year, need not be reported in information returns:

(a) Payments of income to non-residents;

(b) Payments of income upon which District income tax has been withheld at the source;

(c) Payments which, under the provisions of § 2(a) of Title 3 of the Act, do not constitute gross income to the recipient;

(d) Payments by a broker to the broker's customers;

(e) Any type payments made to corporations or financial institutions;

(f) Bills paid for merchandise, telegrams, telephone, freight storage, and similar charges;

(g) Payments of rent made to real estate agents (but the agent must report payments to the landlord if the amount paid during the calendar year was six hundred dollars ($ 600); and

(h) Salaries and profits paid or distributed by a partnership to the individual partners.

111.3 In order to make necessary a return of information, the income shall be fixed or determinable, it need not be annual or periodical.

111.4 An amount is considered paid to the recipient when it is credited or set apart for the recipient without any substantial limitation or restriction on the time or manner of payment or condition under which payment is to be made.

111.5 A return shall be made in each case on Form D-99, accompanied by Form D-96 showing the number of returns filed.

111.6 A copy of Federal Form 1099 or W-2 may be submitted instead of Form D-99.

111.7 Form D-99 which has been approved by the Deputy Chief Financial Officer shall show the following:

(a) The name and address of the person making payments;

(b) The name and address of the recipient and the recipient's social security number. If the present address is unknown, the last known address shall be given; and

(c) The nature and total amount of the payments.

111.8 If the District of Columbia agrees to participate in the combined Federal/State Information Reporting Program, a taxpayer complying with the Federal information requirements shall be deemed to have complied with the requirements for filing District information returns.

111.9 Each person making payments of interest or dividends (as those terms are respectively defined in §§ 6042(b) and 6049(b) of the Internal Revenue Code of 1954) of ten dollars ($ 10) or more in the aggregate in any calendar year to a resident shall render a return of the payments for that year on or before February 28th of the following year.

History

• SOURCE: Commissioners' Order 56-1431 effective July 24, 1956, 16 DCRR §§ 304.2, 304.3 and 304.4; as amended by Final Rulemaking published at 28 DCR 5393 (December 18, 1981), incorporating text of Proposed Rulemaking published at 28 DCR 4112 (September 18, 1991); by Final Rulemaking published at 30 DCR 1922, 1933 (April 29. 1983); and by Final Rulemaking published at 32 DCR 1354, 1356 (March 8, 1985).

9 DCMR § 112 OPTIONAL TAX COMPUTATION FOR D.C. RESIDENTS

112.1 Any resident other than a fiduciary, may elect to compute the tax due in accordance with the Optional Tax Table(s) if taxable income is less than fifty thousand dollars ($ 50,000).

112.2 [Deleted] 30 DCR 1255, 1256 (March 18, 1983).

History

• SOURCE: Commissioners' Order 60-85 effective January 14. 1960, 6 DCR 197 (January 25, 1960), 16 DCRR § 305.1; as amended by Final Rulemaking published at 30 DCR 1255, 1256 (March 18, 1983).

9 DCMR § 113 PROPERTY TAX CREDIT

113.1 If a claimant or member of the household uses part of the dwelling house for business purposes, or part of the dwelling house is rented to someone who is not a member of the household, property taxes accrued or amount of rent used in determining property taxes accrued shall be reduced by the amount of the deduction allowable for property taxes or rent on any District income or franchise tax return in determining the net income of the business or the net rental income.

113.2 If a claimant owns two (2) or more dwelling houses in the District during the calendar year, property taxes accrued shall be determined by multiplying by two (2) the amount of first-half taxes ordinarily due and payable in September of that year on the homes resided in by the claimant on December 31st of that year.

113.3 The Deputy Chief Financial Officer shall, upon the written request of a claimant, determine the value of a claimant's home for purposes of determining property taxes accrued when that home is an integral part of a larger unit, such as a multipurpose building or a multi-dwelling building.

113.4 In case of the death of one of the parties to a joint return after the claim is filed but before it is paid, the surviving spouse shall be deemed to be the claimant if the home was held as tenants by the entirety or as joint tenants.

113.5 The table to be provided for the individual entitled to claim this credit other than the elderly, blind, or disabled shall be identified as "Property Tax Credit Table A." The table to be provided for the elderly, blind, or disabled individuals entitled to claim this credit shall be identified as "Property Tax Credit Table B."

113.6 Table A amounts of household gross income shall be in increments of five hundred dollars ($ 500) for those households having gross household incomes of nine thousand nine hundred ninety-nine dollars ($ 9,999) or less, and in increments of one thousand ($ 1,000) for those households having household gross incomes from ten thousand dollars to twenty thousand dollars ($ 10,000 to $ 20,000). Table B amounts of household gross income shall be in increments of five hundred dollars ($ 500).

113.7 Table A shall be in increments of twenty dollars ($ 20) for the amounts of property taxes paid or rent constituting property taxes paid. Table B shall be in increments of ten dollars ($ 10) for the amounts of property taxes paid or rent constituting property taxes paid.

113.8 The product indicating the amount of relief in each cell in the tables shall be rounded to the nearest whole dollar.

113.9 In addition to the definitions set forth in D.C. Code § 47-1806.6(b), the following words and phrases shall have the meanings ascribed:

(a) Household income includes household gross income received by all individual members of a household during the calendar year while such individuals were members of the household;

(b) Members of a household means all members of one household, whether or not they are related. For example, two (2) or more unrelated individuals sharing an apartment constitute the members of a household;

(c) Gifts from nongovernmental sources shall not include any amounts received by a recipient who is required to perform some act or render some service as a condition for the receipt of the gift;

(d) Dwelling house means the structure where the claimant resides or has his or her principal place of abode whether or not he or she is domiciled in the District; and

(e) Claimant shall not include any individual who is absent from his or her home(s) in the District for more than one hundred eighty (180) days in the calendar year which the claim is made, or any individual under sixty-five (65) years of age who is claimed as a dependent on any federal, State, or District income tax return during the year for which a claim is made.

History

• SOURCE: Commissioners' Order 56-1431 effective July 24, 1956, 16 DCR § 305.7; as amended by Regulation No. 74-45 effective December 12, 1974; by the Third Amendment to the Revenue Act of 1975 Act, D.C. Law 1-61, 22 DCR 4383 (February 12, 1976); by Final Rulemaking published at 25 DCR 4784 (November 27, 1978); and by Final Rulemaking published at 32 DCR 1354, 1356 (March 8, 1985).

9 DCMR § 114 CREDITS FOR INDIVIDUAL INCOME TAX PAID TO OTHER JURISDICTIONS AND CAMPAIGN CONTRIBUTIONS

114.1 Any resident claiming credit on his or her individual income tax return, Form D-40, for income tax required to be paid for the taxable year to another state, territory or possession of the United States, or political subdivision thereof on income attributable thereto, shall submit with Form D-40 the following information:

(a) A copy of the income tax return required to be filed with the other state, territory or political subdivision; and

(b) If requested, proof of payment of the income tax paid.

114.2 Treatment of the credit as it relates to income from intangible property (dividends, interest, etc.) shall be afforded as follows:

(a) Credit shall not be allowed for income tax paid to another jurisdiction on income from intangible property whose source is in the District;

(b) If the taxpayer is domiciled in the District but required to pay a tax to another jurisdiction on income from intangible property derived from sources within that jurisdiction, the credit shall be allowed; and

(c) A statutory resident of the District domiciled outside the District and who is required to pay a tax to his or her state of domicile on income from intangible property from jurisdictions other than the District shall be allowed a credit.

114.3 For the purpose of establishing the amount of the political campaign contribution credit to be allowed under the Act, any individual claiming the credit shall submit the information on a form prescribed by the Deputy Chief Financial Officer.

114.4 The political campaign contribution credit shall not exceed the amount of any individual's District income tax liability.

History

• SOURCE: Commissioners' Order 56-1431 effective July 24, 1956, 16 DCRR § 305.8; as amended by Regulation No. 74-43 effective December 27, 1974: by Final Rulemaking published at 30 DCR 1255, 1256 (March 18, 1983), and by Final Rulemaking published at 30 DCR 1922, 1923 (April 29, 1983), designating §§ 114.2 and 114.3 as 114.3 and 114.4 respectively.

9 DCMR § 115 CREDIT FOR TAX WITHHELD ON WAGES

115.1 The tax deducted and withheld at the source upon wages under the provisions of § 8(b) and § 8(c) of Title 12 of the Act shall be allowable as a credit against the tax imposed by § 3 of Title 6 of the Act upon the recipient of the income.

115.2 The credit set forth in § 115.1 shall be allowed against the tax imposed by § 3 of Title 6 of the Act for the taxable year of the recipient of the income which begins in that calendar year; Provided, that credit may be denied unless supporting Form D-2 withholding statements are furnished to the Deputy Chief Financial Officer.

115.3 If the recipient of income has more than one taxable year beginning in that calendar year, the credit shall be allowed against the tax for the last taxable year so beginning.

115.4 If the tax has been withheld at the source by an employer outside the District, credit or refund may be denied to the employee until that tax has been paid over to the Deputy Chief Financial Officer by the employer.

History

• SOURCE: Commissioners' Order 56-1431 effective July 24, 1956, 16 DCRR § 305.3.

9 DCMR § 116 TAX ON CORPORATIONS AND FINANCIAL INSTITUTIONS

116.1 The taxable income of corporations and financial institutions under Title 7 is defined to mean "the amount of net income derived from sources within the District within the meaning of Title 10 of the Act;" therefore, to determine what is "taxable income" of financial institutions and corporations, it is necessary to apply the provisions of Title 10 of the Act and §§ 121 through 129 of this chapter.

116.2 The tax imposed upon corporations and financial institutions is levied for the privilege of carrying on or engaging in a trade or business within the District, and of receiving other income which is derived from sources within the District.

116.3 The term "corporation" includes any trust, association, join stock company, or partnership classed (or which should be classed) as a corporation for purposes of federal income taxation.

History

• SOURCE: Commissioners' Order 56-1431 effective July 24, 1956, 16 DCRR §§ 306 land 306.2; as amended by Final Rulemaking published at 28 DCR 5393 (December 18. 1981); incorporating text of Proposed Rulemaking published at 28 DCR 4112 (September 18, 1981); and by Final Rulemaking published at 30 DCR 1255, 1256 (March 18, 1983).

9 DCMR § 117 TAX ON UNINCORPORATED BUSINESSES

117.1 The design of the unincorporated business tax under the law is to impose a tax upon all business income which would be subject to the corporation franchise tax (as though the business were incorporated), without regard to whether the business is carried on by an individual, a partnership, or some other unincorporated entity.

117.2 The term "unincorporated entity" includes, but is not limited to, concurrent ownership in property.

117.3 In the great majority of cases there shall be no question whether an entity is conducting or engaging in a trade, business, or occupation which is subject to the tax.

117.4 The terms of the statute are extremely broad and include all kinds of businesses, trades, and occupations.

117.5 For purposes of the exclusion for ministers of religion, only authorized ministers of recognized religious sects and Christian Science practitioners shall not be engaging in an unincorporated business.

117.6 If an individual or other entity shall carry on two (2) or more distinct businesses, all of the businesses shall be consolidated in one (1) return. The taxpayer shall not treat each distinct business separately.

117.7 The net income of all non-exempt business carried on by an individual or other entity shall determine its unincorporated business franchise tax liability. An individual or other entity shall be entitled to only one (1) exemption of five thousand dollars ($5,000), rather than an exemption of that amount on each distinct business; provided, that if an individual conducts one (1) business as its sole owner and is a member of a partnership which conducts a distinct business, those businesses shall be considered different entities, and each shall be entitled to a five thousand dollar ($5,000) exemption.

117.8 The operation of one (1) or more apartment house, hotel, dwelling, boarding house, or other building or part of a building shall be classed as an unincorporated business if conducted by an individual, partnership, or other unincorporated entity.

117.9 Often the continuity, frequency, and regularity of activities, as distinguished from transactions of an isolated or incidental nature, shall be the factors which shall determine whether activities constitute the carrying on of an unincorporated business. For example, an individual shall not be deemed to be engaged in an unincorporated business solely by reason of the purchase and sale of real estate for his or her own account, but if he or she shall make a business of buying and selling real estate, such activities shall be subject to the unincorporated business tax. Similarly, if an individual devotes part of his or her time, energy, and thought to stock and commodity markets and trades in securities and commodities, he or she is not carrying on an unincorporated business, if those activities are of an isolated or incidental nature and are not conducted as a business.

117.10 A person(s) conducting or operating a trade or business which such person(s) believes is exempt from the tax on unincorporated businesses may, in order to obtain the exemption, file with the Chief Financial Officer a request for ruling thereon if:

(a) The trade or business renders personal services; and

(b) The trade or business is not specifically exempted by the Act or this chapter.

117.11 The request for ruling provided for under § 117.10 shall be in writing and shall include the following information:

Taxpayer's name, business address and federal taxpayer identification number;

Taxpayer's facts and circumstances concerning the specific tax matter for which the taxpayer is requesting guidance;

Statutory or judicial authority upon which the taxpayer is relying,

The relief requested; and

A penalties of perjury statement signed and dated by the taxpayer with the following declaration:

"Under penalties of perjury, I declare that I have examined this request for a private letter ruling, including accompanying documents, and, to the best of my knowledge and belief, this request for a private letter ruling contains all the relevant facts relating to the request, and such facts are true, correct, and complete."

117.12 The burden of establishing the exemption to the satisfaction of the Chief Financial Officer shall be upon the person(s) conducting or operating the trade or business.

117.13 Depreciation required to be recaptured in accordance with the Act (D.C. Official Code § 47-1801.01, et seq. (2015 Repl.)) and corresponding federal provisions shall be recognized and reported by the unincorporated business entity in the same manner and to the same extent as a corporation is required to recapture depreciation under the Act and the Federal provisions.

History

• SOURCE: Commissioners' Order 56-1431 effective July 24, 1956, 16 DCRR §§ 307.2, 307.3, 307.5, 307.8 and 307.8; as amended by the Third Amendment to the Revenue Act of 1975 Act, D.C. Law 1-61, 22 DCR 4383 (February 12, 1986); by Final Rulemaking published at 30 DCR 1922, 1924 (April 29, 1983); and by Final Rulemaking published at 34 DCR 3846 (June 12, 1987); as amended by Final Rulemaking published at 68 DCR 013105 (December 10, 2021). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 117

9 DCMR § 118 UNINCORPORATED BUSINESS OF A DECEDENT

118.1 The unincorporated business of a decedent which is carried on by an executor or administrator shall be taxable.

118.2 If a receiver or trustee continues the business of an individual or partnership and is duly authorized to continue or carry on that business, the income derived from the business shall be taxable; Provided, that if that business becomes incorporated, it would thereafter be subject to the corporation franchise tax instead of the unincorporated business franchise tax.

History

• SOURCE: Commissioners' Order 56-1431 effective July 24, 1956, 16 DCRR § 307.6.

9 DCMR § 119 TAX COMPUTATIONS FOR UNINCORPORATED BUSINESSES

119.1 As in the case of corporations, the phrase "taxable income" of unincorporated business means the amount of net income derived from sources within the District within the meaning of Title 10 of the Act, and shall be determined in accordance with Title 10 of the Act and § 122 of this chapter; except as otherwise provided in § 119.6.

119.2 Under the Act, the net income of an unincorporated business is computed in practically the same manner as the net income of a corporation. Accordingly, an unincorporated business is generally entitled to allowable deductions from gross income to the same extent that would be allowable if the business were incorporated.

119.3 The Act is drawn so that only income taxed against an unincorporated business is not again taxed to the owner or owners of the business as individuals.

119.4 No deduction which is allowed or allowable from the gross income of an unincorporated business subject to the tax imposed by Title 8 of the Act shall be allowed as a deduction in the individual return of any person entitled to share in the net income of the business.

119.5 Taxes, contributions, and other deductions of the individual owners of a business which are not applicable to the income of the business are not deductible in the unincorporated business tax return, but may be deducted in the individual returns of the proprietors, partners, or other persons entitled to share in the net income.

119.6 Any amount exempted from the tax imposed by Title 8 shall be reported and included in the gross income of the person(s) entitled to share in the exemption. If there is more than one (1) taxpayer entitled to share the amount excluded, the amount excluded by each shall be the same proportion as the amount of net income apportioned to that taxpayer for federal income tax purposes. That amount shall be reported in the return of each District resident individual for his or her taxable year in which the taxable year of the business ended.

119.7 The full amount of the exemption allowed by law shall be deductible from the net income from District sources of an unincorporated business (reporting for a full year) whether the entire income of the business is wholly or partly derived from sources within the District.

History

• SOURCE: Commissioners' Order 56-1431 effective July 24, 1956, 16 DCRR §§ 307.9 through 307.12; as amended by the Third Amendment to the Revenue Act of 1975 Act. D.C. Law 1-61. 22 DCR 4383 (February 12, 1976).

9 DCMR § 120 COMMON TRUST FUNDS

120.1 A common trust fund (as defined by Pub. L. 81-416) shall not be subject to income taxes imposed by the Act, as amended, and for purposes of the Act shall not be deemed to be a corporation.

120.2 While a common trust fund, as such, is not taxable for income tax purposes, the interest of a participant in a common trust fund shall be taxable, if it would be otherwise taxable under the provisions of Title 9 of the Act.

120.3 The net income of a common trust fund shall be computed in the same manner and on the same basis as the net income of an individual.

120.4 In computing its net income, each participant of a common trust fund shall include its proportionate share of the net income of the fund, whether or not distributed to it, and the amount so included in the net income of a participant shall be taxable to that participant or its beneficiary in the manner and to the extent provided in Title 9 of the Act as if any amount not distributed to the participant during its taxable year actually had been so distributed.

120.5 Each bank or trust company maintaining a common trust fund shall make a return under oath for the taxable year of the fund.

History

• SOURCE: Commissioners' Order 56-1431 effective July 24, 1956, 16 DCRR §§ 308.1 through 308.4.

9 DCMR § 121 FRANCHISE TAX

121.1 As defined in Title 1 of the Act, the words "trade or business" include the engaging in or carrying on of any trade, business, profession, vocation, vocation, calling, or commercial activity in the District, except as otherwise provided in this chapter.

121.2 The Act provides that the words "trade or business" shall not include, for the purposes of the Act, any of the following:

(a) Sales of tangible personal property whereby title to the property passes within or outside the District by a corporation, financial institution, or unincorporated business which does not physically have or maintain an office, warehouse, or other place of business in the District, and which has no officer, representative, or agent with an office or other place of business in the District during the taxable year;

(b) The words "agent" and "representative," as used in § 121.2(a), shall not include any independent broker engaged independently in regularly soliciting orders in the District for sellers and who holds himself or herself out as such; and

(c) While it is not the purpose of this chapter to give specific definitions which may cover most conceivable kinds of employment or activity which come within the statutory definition of "trade or business," the following general definitions are important:

(1) A "business" is that which occupies the time, attention, and labor of persons for the purpose of livelihood or profit. Engaging in business involves the investment of time or capital, or both, on the future outcome of the enterprise, whether it be successful or unsuccessful; and

(2) "Commerce" consists of intercourse and traffic, and includes the transportation of persons and property as well as the purchase, sale, and exchange of commodities.

121.3 A corporation, financial institution, or unincorporated business may derive income from the sale of real property located in the District, from services performed in the District, from rental of real or personal property located in the District, from investments made or other capital employed in the District, and in other ways, and thus be liable for the tax upon that income, even though it maintains no office or other place of business in the District.

121.4 Income from sales of tangible personal property shall be taxable (except as set forth in § 121.1) if the taxpayer has or maintains an office, warehouse, or other place of business in the District, or has an officer, agent, or representative having an office or other place of business in the District during the taxable year.

History

• SOURCE: Commissioners' Order 56-1431 effective July 24, 1956, 16 DCRR §§ 309.1 and 309.3; as amended by the Third Amendment to the Revenue Act of 1975 Act, D.C. Law 1-61, 22 DCR 4383 (February 12, 1976); and by Final Rulemaking published at 28 DCR 5393 (December 18, 1981), incorporating text of Proposed Rulemaking published at 28 DCR 4112 (September 18, 1981).

9 DCMR § 122 ALLOCATION AND APPORTIONMENT

122.1 The measure of the franchise tax shall be that portion of the net income of the corporation, financial institution, or unincorporated business that is fairly attributable to any trade or business engaged in or carried on within the District, as defined in the Act, and such other net income as is derived from sources within the District.

122.2 The portion of net income which is "fairly attributable" to any trade or business or other net income as derived from sources within the District shall be determined by allocation and apportionment, as prescribed in this section.

122.3 If the entire net income is derived from engaging in a trade or business within the District or from sources within the District, all of that income shall be apportioned entirely to the District.

122.4 If the net income is derived from engaging in a trade or business partly within and partly without the District or from sources both within and outside the District, that income shall be allocated and apportioned in accordance with the specific provisions or formulae prescribed in this chapter.

122.5 For purposes of allocation and apportionment of income under this chapter, a taxpayer is taxable in another State if in that State the taxpayer is subject to a net income tax, a franchise tax measured by net income, a franchise tax for the privilege of doing business, or a corporate stock tax.

122.6 For the purposes of this chapter, the word "sales" means all gross receipts of the taxpayer (including any dividends, interest, royalties, etc., considered to be business income) not allocated under § 124.

122.7 The word "allocated," as used in reference to non-business income and deductions from the income, means a determination based upon actual figures specifically applicable to such income and deductions.

122.8 The word "apportioned," as used in reference to net business income, means a ratable portion determined on a percentage basis.

122.9 [Deleted] 32 DCR 1354, 1357 (March 8, 1985).

122.10 The provisions of §§ 122 through 129 shall be applicable in any case in which the liability of the taxpayer to the District for corporation or unincorporated business franchise tax under the Act has not been finally determined for any year by one of the following means:

(a) Separate accounting (if trade or business is not unitary in nature);

(b) The application of a period of limitations prescribed in the Act; and

(c) A decision of a court which has become final.

122.11 All income received by financial institutions (except dividends of corporations or financial institutions), however categorized, shall be deemed to be business income.

122.12 If a financial institution's only place(s) of business is (are) in the District, it shall allocate all business income to the District.

122.13 For purposes of allocation and apportionment under § 122, the following words shall have the meanings set forth in this subsection:

(a) "Business income" means as follows:

(1) Income arising from transactions and activity in the regular course of the taxpayer's trade or business and includes income from tangible and intangible property if the acquisition, management, and disposition of the property constitutes integral parts of the taxpayer's regular trade or business operations;

(2) Income of any type or class and from any source, such as manufacturing income, compensation from services, sales income, interest, dividends, rents, royalties, gains, operating or non-operating income, etc., is business income if it arises from transactions and activities occurring in the regular course of a trade or business;

(3) The critical element in determining whether income is business or non-business shall be the identification of the underlying transactions and activities which are elements of a particular trade or business; and

(4) In general, all transactions and activities of the taxpayer which are dependent upon or contribute to the operations of the taxpayer's economic enterprise as a whole constitute the taxpayer's trade or business and shall be transactions and activities arising in the regular course of, and shall constitute integral parts of, the trade or business;

(b) "Commercial domicile" means the principal place from which the trade or business of the taxpayer is directed or managed;

(c) "Compensation" means wages, salaries, commissions and any other form of remuneration paid or accrued to employees for personal services;

(d) "Non-business income" means all income other than business income;

(e) "Transportation company" means any person engaged in the transportation of persons or goods or property of others for hire; and

(f) "State" means any state of the United States, the District of Columbia, the Commonwealth of Puerto Rico, any territory or possession of the United States, and any foreign country or political subdivision thereof.

History

• SOURCE: Commissioners' Order 56-1431 effective July 24, 1956, 16 DCRR §§ 309.2. 309.4, and 309.5; as amended by Commissioners' Order 61-1214 effective July 14, 1961; by Commissioners' Order 65-742 effective June 3, 1965; by the Third Amendment to the Revenue Act of 1975 Act, D.C. Law 1-61, 22 DCR 4383 (February 12, 1976); by Final Rulemaking published at 28 DCR 5393 (December 18, 1981), incorporating text of Proposed Rulemaking published at 28 DCR 4112, 4113 (September 18, 1981); by Final Rulemaking published at 30 DCR 1922, 1925 (April 29, 1983); and by Final Rulemaking published at 32 DCR 1354, 1356 (March 8, 1985).

9 DCMR § 123 DEDUCTIONS WHEN INCOME IS APPORTIONABLE OR EXEMPT

123.1 No deductions shall be allowed for expenses applicable to any income not subject to or exempt from taxation under the Act.

123.2 Where part of any income is apportioned to the District, the deductions applicable to that income and allowable as such under § 3(a) of Title 3 of the Act shall be apportioned on the same basis as that used to apportion the income, unless, in the opinion of the Deputy Chief Financial Officer, those deductions should be allocated in whole or in part.

123.3 In the case of corporations, unincorporated businesses, and financial institutions, the deductions provided for in § 3(a) of Title 3 shall be allowable only to the extent that they are connected with income fairly attributable to the trade of business carried on or engaged in within the District and from District sources.

123.4 In the context of this section, interest expenses of a corporation, financial institution, or unincorporated business shall be reduced by the amount that the ratio of the average value of the assets producing nontaxable income bears to the average value of the total assets of the corporation, financial institution or unincorporated business.

123.5 Average values of assets shall be computed by one of the following methods:

(a) By adding the values at the beginning and end of a taxable year and dividing the result by 2;

(b) By using an average daily balance; or

(c) Any other method of computation the taxpayer can support with adequate records that clearly reflect the average value of assets.

Example:

Average Value of Assets Producing Nontaxable Income

$ 150,000

Average Value of Total Assets

1,500,000

Interest Expenses

400,000

Interest Expenses Not Allowed

$ 150,000

1,500,000

×

$ 400,000

$ 40,000

Interest Expenses Allowable

$ 360,000

123.6 Administrative expense (such as salaries for officers or employees whose duties include the management of or investing securities, the income from which is not subject to taxation under the Act), shall be apportioned or allocated in a manner that reflects that portion of salaries attributable to taxable and nontaxable activities.

Example:

Officer and Employee Salaries

$ 200,000

Portion of working hours attributable to activities not taxable

2%

Salary expense required to be allocated to nontaxable activities (2% ×$ 200.000)

$ 4,000

Salary expense apportionable to taxable activities

$ 196,000

History

• SOURCE: Commissioners' Order 56-1431 effective July 24, 1956, 16 DCRR § 309.6: as amended by Final Rulemaking published 28 DCR 5393 (December 18, 1981), incorporating text of Proposed Rulemaking published at 28 DCR 4112 (September 18, 1981); and by Final Rulemaking published at 34 DCR 3846 (June 12, 1987).

9 DCMR § 124 ALLOCATION OF NON-BUSINESS INCOME

124.1 Net rents and royalties from real property located in the District shall be allocable to the District.

124.2 Net rents and royalties from tangible personal property shall be allocable to the District, as follows:

(a) To the extent that the property is utilized or located in the District; or

(b) In their entirety if the taxpayer's commercial domicile is in the District and the taxpayer is not taxable in the State in which the property is utilized.

124.3 The extent of utilization of tangible personal property in the District shall be determined by multiplying the rents and royalties by a fraction, the numerator of which is the number of days of physical location of the property in the District during the rental or royalty period in the taxable year and the denominator of which is the number of days of physical location of the property everywhere during all rental or royalty periods in the taxable year.

124.4 If the physical location of the property during the rental or royalty period is unknown or unascertainable by the taxpayer, the tangible personal property is utilized in the State in which the property was located at the time the rental or royalty payer obtained possession.

124.5 Gains and profits and losses from sales or exchanges of real property located in the District, including capital assets, shall be allocable to the District.

124.6 Gains and profits and losses from sales or exchanges of tangible personal property, including capital assets, by a taxpayer engaged in trade or business in the District shall be allocable to the District in the following instances:

(a) If the property had a situs in the District at the time of the sale; or

(b) If the taxpayer's commercial domicile is in the District and the taxpayer is not taxable in the State in which the property had a situs.

124.7 Gains and profits and losses from sales or exchanges of intangible personal property, including capital assets, are allocable to the District if the taxpayer's commercial domicile is in the District.

124.8 Interest and dividends from District sources are allocable to the District, except interest and dividends specifically excluded from tax under § 1 of Title 10 of the Act.

124.9 Rents and royalties from patents, copyrights, trademarks, service marks, secret processes and formulas, goodwill, franchises, and other like property are allocable to the District, as follows:

(a) To the extent that the patent, copyright, trademark, service mark, secret process or formula, goodwill, franchise, or other like property is utilized by the payer in the District; or

(b) To the extent that the patent, copyright, trademark, service mark, secret process or formula, goodwill, franchise, or other like property is utilized by the payer in a State in which the taxpayer is not taxable and the taxpayer's commercial domicile is in the District.

124.10 A patent is utilized in a State to the extent that it is employed in production, fabrication, manufacturing, or other processing in the State or to the extent a patented product is produced in the State.

124.11 A copyright is utilized in a State to the extent that printing or other publication originates in the State.

124.12 Income from sales of tangible personal property to the United States by corporations and unincorporated businesses is from a District source and is allocable to the District unless the entity's principal place of business is located outside the District, and the property is delivered from outside the District for use outside the District.

124.13 All other non-business income which is derived from sources within the District shall be allocable to the District.

124.14 If income is allocable within and outside the District under this section, the expenses, losses, and other deductions arising from production of that income shall be similarly allocable.

124.15 Losses incurred in any transaction entered into for the production of non-business income shall be allowed only to the extent that any profits from the transaction would be taxable under the Act.

History

• SOURCE: Commissioners' Order 56-1431 effective July 24, 1956, 16 DCRR § 309.5(d); as amended by Final Rulemaking published at 30 DCR 1255, 1256 (March 18, 1983).

9 DCMR § 125 APPORTIONMENT OF BUSINESS INCOME

125.1 All business income shall be apportioned to the District by multiplying the income by a fraction, the numerator of which is the property factor, plus the payroll factor, plus the sales factor, and the denominator of which is three (3), reduced by the number of factors, if any, having no denominator.

125.2 Rental income from real and tangible property shall be business income if the property with respect to which the rental income was received is used in the taxpayer's trade or business or is incidental thereto.

125.3 Gain or loss from the sale, exchange or other disposition of real, tangible or intangible personal property, shall constitute business income if the property was owned or leased by the taxpayer in the trade or business.

125.4 Interest income shall be business income where the intangible with respect to which the interest was received arises out of or was created in the regular course of the taxpayer's trade or business, or where the purpose for acquiring or holding the intangible is related to or incidental to the trade or business operations.

125.5 Dividends shall be business income where the stock with respect to which the dividends are received arises out of or was acquired in the regular course of the taxpayer's trade or business operations or where the purpose for acquiring and holding the stock is related to or incidental to the trade or business.

125.6 Patent and copyright royalties shall be business income where the patent or copyright with respect to which the royalties were received arises out of or was created in the regular course of the taxpayer's trade or business operations or where the purpose for acquiring and holding the patent or copyright is related to or incidental to the trade or business operation.

History

• SOURCE: Commissioners' Order 56-1431 effective July 24, 1956, 16 DCRR § 309.5(e): as amended by Final Rulemaking published at 30 DCR 1922, 1925 (April 29, 1983); and by Final Rulemaking published at 32 DCR 1354, 1357 (March 8, 1985).

9 DCMR § 126 PROPERTY FACTOR

126.1 The property factor is a fraction, the numerator of which is the average value of the taxpayer's real and tangible personal property owned by or rented to the taxpayer and used by the taxpayer in the District during the taxable year; and the denominator of which is the average value of all the taxpayer's real and tangible personal property owned by or rented to the taxpayer and used by the taxpayer during the taxable year; except that neither the numerator nor the denominator of the property factor shall include property, or any portion of property, which is not used to produce business income.

126.2 In the case of transportation companies, the numerator of the property factor, in addition to other property described in § 126.1, shall include that portion of the average value of vehicles, rolling stock, aircraft, watercraft of all kinds, and other equipment used by the taxpayer during the taxable period to transport persons and property within and outside the District as the total miles per unit of equipment traveled in the District by each class of the property bear to the total miles per unit of equipment traveled everywhere by each respective class of property. In the case of railroad companies, the "classes of property" shall be those classes required to be reported for District personal property tax purposes pursuant to the Act of December 15, 1945 (D.C. Code § 47-1215).

126.3 If the property is used in any activities the income from which is allocable or apportionable partly under this section and partly under another section or paragraph of this chapter, the taxpayer may employ (subject to the approval of the Deputy Chief Financial Officer) or the Deputy Chief Financial Officer may require the use of any method which will reflect properly the portion of the average value of the property to be used in arriving at the property factor under this section.

126.4 Property owned by the taxpayer shall be valued at its original cost to the taxpayer plus the cost of additions and improvements.

126.5 If the original cost of any property to the taxpayer is not determinable or is zero ($ 0.00), that property shall be valued by the Deputy Chief Financial Officer at an amount equal to its market value at the time of acquisition by the taxpayer.

126.6 Property rented to the taxpayer shall be valued at eight (8) times the net annual rental rate which is the annual rental rate paid by the taxpayer less any annual rental rate received by the taxpayer from subrentals; Provided, that the rental and sub-rental rates are reasonable.

126.7 Payments for leased property capitalized in accordance with federal provisions are not considered rent.

126.8 The capitalized value of the property shall be included in the computation of a property factor.

126.9 The term "net annual rental rate" includes amounts paid or accrued for the use or rental of the property or facilities of another whether paid as rent, reasonable compensation for use or by any other designation, and whether paid pursuant to statutory enactment, lease or rental agreement of any kind, contract, or otherwise.

126.10 If the Deputy Chief Financial Officer determines that any net annual rental rate or sub-rental rate is unreasonable, or if a nominal or zero rate is charged, the Deputy Chief Financial Officer may determine and apply a rental rate that will reasonably reflect the value of the property rented by the taxpayer.

126.11 The average value of property shall be determined by averaging the values at the beginning and end of the tax period; but the taxpayer may use (subject to the approval of the Deputy Chief Financial Officer), or the Deputy Chief Financial Officer may require the averaging of monthly or quarterly values during the tax period if reasonably necessary to reflect properly the average value of the taxpayer's property.

History

• SOURCE: Commissioners' Order 56-1431 effective July 24, 1956.16 DCRR § 309.5(1); as amended by Final Rulemaking published at 32 DCR 1354, 1358 (March 8, 1985), redesignating §§ 126.7, 126.8, and 126.9 as §§ 126.9, 126.10 and 126.11 respectively.

9 DCMR § 127 PAYROLL FACTOR

127.1 The payroll factor is a fraction, the numerator of which is the total compensation paid or accrued by the taxpayer in the District during the taxable year, and the denominator or which is the total compensation paid or accrued by the taxpayer everywhere during the taxable year, except that neither the numerator nor the denominator of the payroll factor shall include compensation paid or accrued to employees for personal services rendered in the production of non-business income.

127.2 Compensation paid or accrued other than in cash shall be valued at its fair market value as of the date of payment or accrual.

127.3 In the case of transportation companies, the numerator of the payroll factor, in addition to other compensation described in § 127.1, shall include the portion of the total compensation paid or accrued to employees who are employed on vehicles, rolling stock, aircraft, watercraft of all kinds, and other equipment used by the taxpayer during the taxable period to transport persons and property within and outside the District; determined by applying to the total compensation the percentage computed under § 126.2 relating to the portion of the average value of vehicles, rolling stock, aircraft, watercraft of all kinds, and other equipment of transportation companies to be included in the numerator of the property factor.

127.4 If compensation is paid or accrued for services the income from which is allocable or apportionable partly under this paragraph and partly under another section or paragraph of this chapter, the taxpayer may employ (subject to the approval of the Deputy Chief Financial Officer), or the Deputy Chief Financial Officer may require the employment of any method which will reflect properly the portion to be used in arriving at the payroll factor under this section.

127.5 Compensation shall be paid or accrued in the District if the individual's service is performed entirely within the District.

127.6 Compensation shall be paid or accrued in the District if the individual's service is performed both within and outside the District but the service performed outside the District is incidental to the individual's service within the District.

127.7 Compensation shall be paid or accrued in the District if some of the individual's service is performed in the District and either of the following is applicable.

(a) The base of operations or, if there is no base of operations, the place from which the service is directed or controlled is within the District; or

(b) The base of operations or the place from which the service is directed or controlled is not in the District or in any State in which some part of the service is performed, but the individual's residence is in the District.

History

• SOURCE: Commissioners' Order 56-1431 effective July 24, 1956, 16 DCRR § 309.5(g).

9 DCMR § 128 SALES FACTOR

128.1 The sales factor, except for transportation companies, is a fraction, the numerator of which is the total sales of the taxpayer in the District during the taxable year; and the denominator of which is the total sales of the taxpayer everywhere during the taxable year.

128.2 The sales factor, in the case of transportation companies, is a fraction, the numerator of which is the total revenue units first received by the company as originating or connecting traffic at a point within the District plus the total revenue units discharged or unloaded by the company at a point within the District at the termination of the transportation movement or for transfer to a connecting carrier; and the denominator of which is twice the total revenue units originated everywhere during the taxable year.

128.3 One (1) ton of freight shall constitute one (1) revenue unit; and ten (10) passengers shall constitute one (1) revenue unit.

128.4 If a transportation company's revenue is predominately from the transportation of passengers, the number of passengers loaded and discharged may be used in lieu of originating and terminating tonnage.

128.5 Except for transportation companies, sales other than sales of tangible personal property, are in the District if either of the following apply:

(a) The income-producing activity or service is performed in the District; or

(b) The income-producing activity or service is performed both in and outside the District and a greater proportion of the income producing activity or service is performed in the District than in any other State, based on costs of performance.

128.6 A sale of tangible personal property, including a sale to the United States government, shall be in the District, regardless of the point of passage of title, f.o.b. point, or other conditions of the sale, if any of the following factors apply:

(a) The property is delivered or shipped to a purchaser within the District;

(b) The ultimate destination of the property after all transportation, including transportation by the purchaser, has been completed is a point within the District; or

(c) The property is delivered or shipped from an office, warehouse, store, factory, or other place of storage in the District to a destination outside the District and the taxpayer is not taxable in the State to which the property is delivered or shipped.

128.7 For the purposes of this section, the word "sales" includes all receipts deemed to be business income not subject to allocation.

History

• SOURCE: Commissioners' Order 56-1431 effective July 24, 1956, 16 DCRR § 309.5(h); as amended by Final Rulemaking published at 32 DCR 1354, 1358 (March 8, 1935).

9 DCMR § 129 ALLOCATION AND APPORTIONMENT APPLICABLE TO FINANCIAL INSTITUTIONS

129.1 The District shall impose on a financial institution a franchise tax measured by net income, determined by multiplying the financial institution's base by an apportionment fraction, the numerator of which is the sum of the payroll factor and the gross income factor and the denominator of which is 2. For this purpose the base to which the apportionment fraction is applied shall be the financial institution's net income for that taxable year as defined under Title III of the Act.

129.2 The payroll factor is a fraction, the numerator of which is the total amount paid or accrued in the District by the financial institution as compensation and the denominator of which is the total amount paid or accrued everywhere by the financial institution as compensation during the taxable year.

129.3 Compensation shall be paid in the District if paid to any employee considered to be located or as having regular presence therein.

129.4 All compensation paid by a financial institution to an employee located in a State in which the financial institution is not taxable shall be deemed to have been paid in the District of Columbia, if the financial institution has its principal office located in the District of Columbia.

129.5 The gross income factor is a fraction, the numerator of which is the financial institution's gross income located in the District during the taxable year and the denominator of which is the total gross income of the financial institution during the taxable year.

129.6 All gross income described in §§ 129.9 through 129.11 which is located in a jurisdiction in which the financial institution is not subject to a "doing business tax" shall be deemed to be located in the District of Columbia if the principal office of the financial institution is located in the District.

129.7 A financial institution whose commercial domicile is in the District and who is subject to a "doing business tax" in another jurisdiction, shall include in the numerator of the income factor for the District any income not required by the other jurisdiction to be included in the numerator of an income factor.

129.8 [Deleted] 32 DCR 1354, 1358 (March 8, 1985).

129.9 The interest, loan placement fees, discount and net gain from each unsecured loan and each loan secured primarily by tangible or intangible personal property, or any participating interest therein, shall be located in the District if the loan is originated in the District.

129.10 In the case of a financial institution whose commercial domicile is in the District, income from securities, investments, money market instruments or from any other source not required to be apportioned outside the District shall be located in the District.

129.11 The income referred to in § 129.10 shall include, but not be limited to, interest, dividends and net gains.

129.12 Except as provided for in § 129.7, fees, commissions, service charges, and other forms of gross income from the sales of depository or financial services shall be located in the District if the service is performed therein.

129.13 Sales or services rendered in two (2) or more taxing jurisdictions shall for the purposes of the numerator be included in the numerator of the jurisdiction in which the greater portion of the income-producing activity is performed, based on costs of performance.

129.14 Gross income from the lease of tangible property shall be considered to be located in the District if the property is located therein.

129.15 Except as otherwise provided in this section, tangible property, including real property which is security for a loan, shall be considered to be located in the jurisdiction in which the property is physically situated.

129.16 Tangible personal property which is characteristically moving property, such as motor vehicles, rolling stock, aircraft, vessels, mobile equipment, and the like, and which is leased to others for use, shall be considered to be located in the District if the following conditions are met:

(a) The operation of the property by the lessee is entirely within the District, or the operation without the District is occasional or incidental to its operation within the District; or

(b) The operation of the property by the lessee is in two (2) or more jurisdictions, but the principal base of operations from which the property is sent out by the lessee is in the District.

History

• SOURCE: Commissioners' Order 56-1431 effective July 24, 1956, 16 DCRR § 309.5(i); as amended by Final Rulemaking published at 28 DCR 5393 (December 18, 1981), incorporating text of Proposed Rulemaking published at 28 DCR 4112 (September 18, 1981); by Final Rulemaking published at 30 DCR 1922, 1925 (April 29, 1983); and by Final Rulemaking published at 32 DCR 1354, 1358 (March 8, 1985).
• EDITOR'S NOTE: Final Rules published at 30 DCR 1922 (April 29, 1983) repealed the entire section. A subsection of this section was thereafter repealed in Final Rules published at 32 DCR 1358 (March 8, 1985).

9 DCMR § 130 WITHHOLDING: GENERAL PROVISIONS

130.1 Each employer [as defined in § 3401(d) of the U.S. Internal Revenue Code of 1986 as amended (hereafter “IRC of 1986”)] making payment of wages subject to withholding, shall deduct, withhold, and pay over to the Deputy Chief Financial Officer of the Office of Tax and Revenue (“DCFO”) the tax required to be withheld.

130.2 Entities that make non-wage payments subject to required or voluntary withholding, including but not limited to, payments of pension, military retirement, gambling winnings, voluntary withholding on certain government payments, and backup withholding, shall deduct, withhold and pay over the tax withheld to the DCFO.

130.3 Wages subject to withholding are all wages as defined in § 3401(a) of the IRC of 1986, paid, by an employer who is required to withhold taxes under the law, to an employee, for services performed within or outside the District.

130.4 An employee shall not include any of the following individuals, unless the individual is domiciled within the District at any time during the taxable year:

(a) An elected official of the government of the United States;

(b) An employee on the staff of an elected officer in the legislative branch of the government of the United States if that employee is a bona fide resident of the State of residence of the elected officer;

(c) An officer of the executive branch of the U.S. government whose appointment to the office held was by the President of the United States and subject to confirmation by the Senate of the United States, and whose tenure of office is at the pleasure of the President of the United States; or

(d) A Justice of the Supreme Court of the United States.

130.5 When the last date for the payment of a tax falls on a Saturday, Sunday, or a legal holiday, the last date for paying the tax shall be the first business day following that Saturday, Sunday, or holiday.

130.6 When the last date for filing a return falls on a Saturday, Sunday, or a legal holiday, the last date for filing the return shall be the first business day following that Saturday, Sunday, or holiday.

130.7 In determining the amount to be deducted and withheld, the wages may, at the election of the employer, be computed to the nearest dollar.

130.8 If the remuneration paid by an employer to an employee for services performed during one-half (1/2) or more of any payroll period of not more than thirty-one (31) consecutive days constitutes wages, all the remuneration paid by the employer to that employee for that period shall be deemed to be wages.

130.9 If the remuneration paid by an employer to an employee for services performed during more than one-half (1/2) of any payroll period of not more than thirty-one (31) days does not constitute wages, then none of the remuneration paid by the employer to that employee for that period shall be deemed to constitute wages.

130.10 All employers or entities required to withhold tax must have a Federal Employment Identification Number (FEIN) and be registered with the Office of Tax and Revenue and have a valid account registration number. The employer or entity’s FEIN and account registration number must be included on all withholding tax returns, regardless of who files the tax return (including returns filed by payroll processing companies on behalf of customers). Failure to obtain an FEIN and account registration number, or failure to include both an FEIN and account registration number when filing a withholding tax return or making a withholding tax payment may result in the rejection of the return or payment and trigger penalties under D.C. Official Code § 47-4213.

130.11 Where an employer or entity required to file withholding tax returns and make withholding tax payments contracts with a payroll processing company or bulk filer of withholding tax returns and payments, the responsibility for withholding tax compliance remains with the employer or entity.

History

• SOURCE: Commissioners' Order 56-1431, effective July 24, 1956, published at 16 DCRR §§ 310.2 through 310 4, 310.11, 310.12, 310.16, and 310.20; as amended by Final Rulemaking published at 30 DCR 1922, 1925 (April 29, 1983); as amended by Final Rulemaking published at 30 DCR 1922, 1925 (April 29, 1983); as amended by Final Rulemaking published at 64 DCR 1116 (February 3, 2017). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 130

9 DCMR § 131 WITHHOLDING PAYROLL RECORDS

131.1 Each employer shall maintain written records which accurately and completely show the following for each employee:

(a) The sums required to be withheld from each employee; and

(b) The sums actually withheld by the employer from each employee.

131.2 Each employer shall keep the Withholding Exemption Certificates (Forms D-4) submitted by the employer's employees.

131.3 Each employer shall maintain and keep a record of the residence address of each individual employed.

131.4 Each employer shall also maintain and keep a record of the following:

(a) Any changes in the residence address of any employee;

(b) The date the individual employee actually changes his or her residence address; and

(c) Other information that the Deputy Chief Financial Officer may require to enable the Deputy Chief Financial Officer to determine the liability of each employee and the employer under the provisions of the Act and this chapter.

131.5 Each individual employee shall furnish his or her employer with the employee's residence address and shall keep the employer currently advised of each change of residence address and the date the change was made.

History

• SOURCE: Commissioners' Order 56-1431 effective July 24, 1956, 16 DCRR § 310.1.

9 DCMR § 132 RETURNS OF TAXES WITHHELD

132.1 Return Filing Period. Returns of tax withheld from wages are required to be filed with the Office of Tax and Revenue on a quarterly or annual basis. Entities reporting non-wage tax withheld shall file a return on an annual basis.

132.2 The DCFO shall assign an account registration number to each employer or entity required to file returns and assign them either a quarterly or annual return filing period. Returns shall be filed in accordance with the assigned filing period, and shall continue to be filed on that basis until the DCFO determines that the employer's return shall be made for a different filing period.

(a) For employers or entities registered for withholding prior to January 1, 2017, all employers or entities not previously assigned to an annual period shall file quarterly tax returns and shall continue to file on that basis until the DCFO determines that the employer's return shall be made for a different filing period. Employers or entities assigned to an annual reporting period prior to January 1, 2017 shall not be required to file quarterly returns, and shall file annual returns and continue to file on that basis until the DCFO determines that the employer's return shall be made for a different filing period.

(b) For employers or entities registered for withholding on or after January 1, 2017, all new applications shall file quarterly tax returns, unless their filing period is changed by the DCFO.

132.3 Return Filing Deadlines. Quarterly withholding returns shall be filed on or before the last day of the month following the close of each quarterly reporting period. Annual withholding returns shall be filed on or before the last day of January of each year for the preceding year.

132.4 All returns shall be made on forms prescribed by the DCFO.

132.5 Withholding tax returns are only available electronically by download at mytax.dc.gov. Failure to obtain forms or returns does not relieve a taxpayer of the responsibility to file and pay timely.

132.6 Withholding tax returns can be filed electronically, for either single or bulk filers, at mytax.dc.gov. Electronic filing is the method preferred by the Office of Tax and Revenue.

132.7 Final Returns. The last return for any employer required to deduct and withhold tax under the Act who, during a calendar year, ceases to engage in business or ceases to pay wages, shall be marked by that employer as the "FINAL RETURN." The final return shall state the period for which it is made and the date of the last payment of wages.

132.8 If a taxpayer amends a tax return, an amended return shall be filed within three years of the original due date of the return and must be marked amended on the return in order to be processed.

132.9 If the payment of the tax results in an overpayment of the tax required to be withheld and paid, a credit will be applied to the next reporting period. Alternatively, to receive a refund of such overpayment of tax, the taxpayer shall request a refund by indicating on the tax return.

History

• SOURCE: Commissioners' Order 56-1431, effective July 24, 1956, published at 16 DCRR §§ 310.5; as amended by Final Rulemaking published at 28 DCR 1323 (March 27, 1981), incorporating the text of Proposed Rulemaking published at 28 DCR 413 (January 23, 1981); as amended by Final Rulemaking published at 29 DCR 514 (January 29, 1982); as amended by Final Rulemaking published at 30 DCR 1453 (April 1, 1983); as amended by Final Rulemaking published at 64 DCR 1116 (February 3, 2017). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 132

9 DCMR § 133 PAYMENT OF WITHHOLDING TAX

133.1 All sums which the employer has withheld from employees shall be deemed to be held in trust by the employer for the District.

133.2 Taxes withheld from wages are required to be paid to the Office of Tax and Revenue on a monthly, quarterly, or yearly basis.

(a) For employers or entities registered for withholding prior to January 1, 2017, all employers or entities shall continue to pay withholding taxes with the same frequency as payments where previously required, unless their payment period is changed by the DCFO.

(b) For employers or entities registered for withholding on or after January 1, 2017, all new applications shall make quarterly tax payments, unless their payment period is changed by the DCFO.

133.3 Taxes withheld from non-wage payments, including, but not limited to, payments of pension, military retirement, gambling winnings, voluntary withholding on certain government payments, and backup withholding, are required to be paid to the Office of Tax and Revenue on a monthly basis.

133.4 Monthly deposits of the tax withheld from wages shall be paid on or before the 20th day after the close of the month. Quarterly deposits of the tax withheld from wages shall be paid on or before the 20th day of the month after the close of each quarter. Annual deposits of tax withheld from wages shall be paid on or before the 20th day of the month following the close of the annual period. For this purpose, “deposit” means a payment to the Office of Tax and Revenue.

133.5 The DCFO shall provide an electronic means, accessible at mytax.dc.gov, of making tax deposits for the amount withheld from wages. A printable voucher shall be provided for those accounts authorized to submit payments by other than electronic means.

133.6 If, in any filing period, more than the correct amount of tax has been withheld, the amount actually withheld shall be remitted to the District.

133.7 Depository payments shall not be estimated, but shall be the actual amount of tax liability for the period for which payment is made.

History

• SOURCE: Commissioners' Order 56-1431, effective July 24, 1956, published at 16 DCRR § 310.6; as amended by Final Rulemaking published at 28 DCR 1323 (March 27, 1981), incorporating text of Proposed Rulemaking published at 28 DCR 413 (January 23, 1981); as amended by Final Rulemaking published at 64 DCR 1116 (February 3, 2017). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 133

9 DCMR § 134 ADJUSTMENT OR REFUND OF WITHHOLDING TAX DEDUCTED

134.1 If, in any filing period, more than the correct amount of tax is deducted from any wage payment, the over-collection shall be repaid to the employee(s) only in another filing period of the same calendar year.

134.2 The employer shall obtain and keep as a part of the employer's records the written receipt of the employee showing the date and the amount of the repayment.

134.3 Each over-collection not repaid and receipted for the employee shall be reported and paid to the D.C. Treasurer.

134.4 Adjustments of prior returns shall be made in accordance with instructions issued by the Deputy Chief Financial Officer.

History

• SOURCE: Commissioners' Order 56-1431 effective July 24, 1956, 16 DCRR § 310.7.

9 DCMR § 135 ANNUAL REPORT OF WITHHOLDING

135.1 Duplicate copies of all statements (Forms W-2, 1098, 1099 or K-1), as appropriate, or approved substitute withholding statements shall be sent to the District by each employer with the Form WT (Withholding Transmittal) that is due on the last day of January or with the employer's final return, if submitted before the end of the calendar year. For years beginning January 1, 2017, and thereafter, withholding statements shall be submitted with Form WT. Entities withholding non-wage tax shall send duplicate copies of all withholding statements using the appropriate Form 1099 Information Return.

135.2 Form W-2, 1098, or K-1, as appropriate or approved substitute withholding statements, shall be submitted electronically for all employers reporting for more than twenty-four (24) employees. The DCFO shall provide a method for all employers to report electronically. The DCFO may provide a downloadable form for transmitting other than by electronic reports of withholding.

History

• SOURCE: Commissioners' Order 56-1431, effective July 24, 1956, published at 16 DCRR § 310.8; as amended by Commissioners' Order 71-6, effective February 25, 1971, published at 17 DCR 567 (March 8, 1971); as amended by Final Rulemaking published at 30 DCR 1453, 1454 (April 1, 1983); as amended by Final Rulemaking published at 32 DCR 1453 (March 8, 1985); as amended by Final Rulemaking published at 64 DCR 1116 (February 3, 2017). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 135

9 DCMR § 136 METHODS OF WITHHOLDING TAX

136.1 The tax shall be computed in accordance with one (1) of the methods set forth in this section on the wages paid within each period to any employee.

136.2 METHOD A - BASED ON A PERCENTAGE OF WAGES PAID: Each employer electing to use this method shall deduct and withhold on the basis of the payroll period, the number of exemptions claimed by the employee, and the employee's marital status in accordance with the appropriate withholding table (See Table I).

136.3 METHOD B - BASED ON THE USE OF WITHHOLDING TAX TABLES: Each employer electing to use one (1) of the withholding tax tables shall deduct and withhold on the basis of the number of withholding exemptions claimed by the employee on the withholding exemption certificate filed by the employee with the employer. (See Table II).

136.4 [Deleted] 34 DCR 2401 (April 10, 1987).

136.5 METHOD C - EXCEPTION: If federal income tax is not required to be withheld for any group of employees, D.C. income tax shall be withheld at the rate of three percent (3%) of all wages paid to those employees; Provided however, that the three percent (3%) shall not be applied when the wages paid do not exceed:

(a) One thousand seven hundred fifty dollars ($ 1,750) in the case of single persons;

(b) Two thousand five hundred dollars ($ 2,500) in the case of married persons filing jointly; and

(c) One thousand two hundred fifty dollars ($ 1,250) in the case of married persons filing separately.

History

• SOURCE: Commissioners' Order 56-1431 effective July 24, 1956, 16 DCRR § 310.13; as amended by Commissioners' Order 66-1550 effective October 6, 1966; by Commissioners' Order 71-6 effective February 25, 1971, 17 DCR 567 (March 8, 1971); by Regulation No. 71-31, 18 DCR 217 (October 18, 1971); by Final Rulemaking published at 30 DCR 1255, 1256 (March 18, 1983); by Final Rulemaking published at 30 DCR 4329 (August 26, 1983); by Final Rulemaking published at 32 DCR 3673 (June 28, 1985); and by Final Rulemaking published at 34 DCR 2401 (April 10, 1987).
• EDITOR'S NOTE: Copies of Table I (Percentage of Wages Paid Method of Withholding D.C. Income Tax) and Table II (Weekly Withholding Tax Table) may be obtained by mailing requests to the Associate Director, Department of Finance and Revenue, One Judiciary Square, 441 4th Street, N.W., Washington, D.C. 20001.

9 DCMR § 137 PAYROLL PERIODS: REGULAR AND IRREGULAR

137.1 For the purposes of this chapter, the term "payroll period" means the period for which a payment of wages is ordinarily made to the employee by an employer.

137.2 It is immaterial that the wages are not always paid at regular intervals. The following are examples of this situation:

(a) If an employer ordinarily pays a particular employee for each calendar week at the end of the week, but for some reason the employee in a given week receives a payment in the middle of the week for the portion of the week already elapsed and receives the remainder at the end of the week, the payroll period is still the calendar week; and

(b) If an employee is sent on a three (3) week trip by the employer and receives at the end of the trip a single wage payment for all services during that three (3) week period, the payroll period is still the calendar week, and wage payment shall be treated as though it were three (3) separate weekly wage payments.

137.3 An employee can have one (1) payroll period with respect to wages paid by any one (1) employer. Thus, if an employee is paid a regular wage for a weekly payroll period and, in addition, is paid supplemental wages (for example, a bonus) which is determined with respect to a different period, the payroll period is the weekly payroll period.

137.4 The term "miscellaneous payroll period," as used in this chapter, means a payroll period other than a daily weekly, biweekly, monthly, semi-monthly, quarterly, semi-annual, or annual payroll period.

137.5 If wages are paid for a period which is not a payroll period, the amount to be deducted and withheld shall be the amount applicable in the case of a miscellaneous payroll period containing a number of days (including Sundays and holidays) equal to the number of days in the period with respect to which the wages are paid.

137.6 If wages are paid without regard to any period (for example, the commission paid to a salesman upon consummation of a sale), the amount of tax to be deducted and withheld shall be determined in the same manner as in the case of a miscellaneous payroll period containing the number of days (including Sundays and holidays) which have elapsed since the date of the last payment of wages by the employer during the calendar year or the date of commencement of employment during that year, or January 1st of that year, whichever is the latest.

137.7 If wages are paid to an employee for a payroll period of more than one (1) year, the amount of the tax required to be deducted and withheld with respect to those wages shall be determined as if the payroll period constituted a miscellaneous payroll period of three hundred and sixty-five (365) days.

History

• SOURCE: Commissioners' Order 56-1431 effective July 24. 1956, 16 DCRR §§ 310.14 and 310.15.

9 DCMR § 138 ADDITIONAL WITHHOLDING

138.1 Amounts, in addition to taxes required to be withheld, may be withheld by an employer under an agreement between the employer and employee.

138.2 Additional amounts withheld pursuant to an employer-employee agreement, together with the amounts otherwise required to be withheld, shall be considered the amounts required to be deducted and withheld.

138.3 The additional withholding, together with the amounts otherwise required to be withheld, shall be reported on Form D-2 as income tax withheld from wages.

138.4 The agreement shall be in writing in the form prescribed by the Deputy Chief Financial Officer, and shall be executed in duplicate by the employer and the employee. One (1) copy of the agreement shall be retained by the employer and one (1) copy shall be retained by the employee.

138.5 An agreement for additional withholding shall be effective for the period as may be mutually agreed upon; however, unless the agreement provides for an earlier termination, either the employer or employee may terminate the agreement by giving written notice effective with respect to the first payment of wages made on or after the first status determination date (January 1st or July 1st), which occurs at least thirty (30) days after the date on which the notice is given.

History

• SOURCE: Commissioners' Order 56-1431 effective July 24, 1956, 16 DCRR § 310.17.

9 DCMR § 139 SUPPLEMENTAL WAGE PAYMENTS

139.1 If supplemental wages (such as bonuses, commissions, or overtime pay) are paid at the same time as regular wages, the tax to be withheld shall be determined as if the aggregate of the supplemental and regular wages were a single wage payment for the regular payroll period.

139.2 If supplemental wages are paid at a different time, the employer shall determine the tax to be withheld by aggregating the supplemental wage either with the regular wages for the current payroll period or with the regular wages for the last preceding payroll period with the same calendar year.

139.3 If an employee receives vacation pay for the time of a vacation absence, the vacation pay shall be subject to withholding as though it were a regular wage payment made for the payroll period or periods which occur during the vacation.

139.4 If vacation pay is paid in addition to regular wages to an employee who forgoes his or her vacation, those payments shall be treated as supplemental wages.

History

• SOURCE: Commissioners' Order 56-1431 effective July 24, 1956, 16 DCRR § 310.13.

9 DCMR § 140 WAGES PAID ON BEHALF OF TWO OR MORE EMPLOYERS

140.1 If a payment of wages is made to an employee by an employer through an agent, fiduciary (or other person who also has the control, receipt, custody, or disposal of, or pays the wages payable by another employer to the employee), the amount of the tax required to be withheld on each wage payment shall be determined upon the aggregate amount of that wage payment or payments in the same manner as if the aggregate amount had been paid by one employer.

140.2 The determination made in accordance with § 140.1 shall be made without regard to whether the wages are paid separately on behalf of each employer or paid in a lump sum on behalf of all employers.

140.3 Each employer shall be liable for the return and payment of a pro rata portion of the tax. In other words, each employer's portion shall be based on the ratio of the amount paid as wages by that particular employer to the aggregate of all wages.

History

• SOURCE: Commissioners' Order 56-1431 effective July 24, 1956, 16 DCRR § 310.19.

9 DCMR § 141 EMPLOYEE WITHHOLDING EXEMPTIONS

141.1 Each withholding exemption shall equal seven hundred fifty dollars ($ 750).

141.2 An employee shall be entitled to the following number of withholding exemptions (except as limited by § 141.3):

(a) One (1) withholding exemption for the employee;

(b) One (1) additional withholding exemption if the employee is the head of household, as defined in the Act;

(c) One (1) additional withholding exemption for each dependent, as defined in the Act;

(d) If the employee is married and lives with the spouse, the one (1) withholding exemption to which the spouse is entitled, or would be entitled if the spouse were an employee, under § 141.2(a);

(e) One (1) additional withholding exemption if the employee or the employee's spouse will have attained the age of sixty-five (65) before the close of the employee's taxable year; or two (2) additional withholding exemptions if both the employee and spouse will have attained the age of sixty-five (65) before the close of the employee's taxable year and the employee claims both these exemptions;

(f) One (1) additional withholding exemption if the employee or the employee's spouse is blind at the close of the employee's taxable year; or two (2) additional withholding exemptions if both the employee and spouse are blind at the close of the employee's taxable year and the employee claims both exemptions; and

(g) Employees may claim additional exemptions in accordance with the provisions of § 8(e)(8) of Title 12 of the Act if estimated itemized deductions for the taxable year exceed the zero bracket amount to which the employee is entitled.

141.3 The additional exemptions allowed under paragraphs (d), (e), and (f) of § 141.2 shall be allowed only if the employee's spouse does not have in effect a withholding exemption certificate claiming the same withholding exemptions.

141.4 For the purposes of this chapter, an individual is blind only if his or her central visual acuity does not exceed 20/200 in the better eye with correcting lenses, or if visual acuity is greater than 20/200 but is accompanied by a limitation in the fields of vision such that the widest diameter of the visual field subtends an angle no greater than twenty degrees (20°).

141.5 Employers shall be required to allow withholding exemptions to each employee on the basis of a withholding exemption certificate signed by the employee.

141.6 If an employee fails to furnish a certificate, the employer shall withhold the tax as if the employee had claimed no withholding exemptions.

141.7 The employer shall not be required to determine whether the employee had claimed the correct number of exemptions; however, if there is reason to believe that the employee has claimed an excessive number of exemptions, the Department of Finance and Revenue shall be so advised.

History

• SOURCE: Commissioners' Order 56-1431 effective July 24, 1956, 16 DCRR § 310.21; as amended by Commissioners' Order 60-85 effective January 14, 1960, 6 DCR 197 (January 25, 1960); by the Third Amendment to the Revenue Act of 1975 Act, D.C. Law 1-61, 22 DCR 4383 (February 17, 1976); and by Final Rulemaking published at 30 DCR 1255, 1257 (March 18, 1983).

9 DCMR § 142 WITHHOLDING EXEMPTION CERTIFICATES

142.1 Each employee shall be required to file with his or her employer a withholding exemption certificate on Form D-4 on or before the date of commencement of employment.

142.2 Blank copies of Withholding Exemption Certificates (Form D-4) shall be supplied by the Deputy Chief Financial Officer, upon request.

142.3 Once filed with the employer, a withholding exemption certificate on Form D-4 shall remain in effect until an amended certificate is furnished.

142.4 Amended certificates to show changes in exemption status shall be filed by employees on Form D-4, in accordance with §§ 142.7 and 142.8.

142.5 The employer may make an amended certificate effective with the next payment of wages, but shall be permitted to postpone the effective date until the first status determination date (January 1st July 1st) which occurs at least thirty (30) days after the date on which the certificate is filed with the employer.

142.6 Prior to December 1st of each year, each employer shall request employees to file amended exemption certificates for the ensuing year if the withholding exemptions to which an employee may reasonably be expected to be entitled at the beginning of the employee's next taxable year will be different from the exemptions to which the employee is entitled on the last exemption certificate previously filed with the employer.

142.7 An employee shall file an amended certificate reducing the number of exemptions within ten (10) days of any of the following events:

(a) When the spouse for whom the employee has been claiming exemption dies, is divorced or legally separated, or claims his or her own exemption on a separate certificate;

(b) When the support of a dependent for whom the employee claimed exemption is taken over by someone else, so that the employee no longer expects to furnish more than half (1/2) of the support for the year;

(c) When the employee finds that a dependent for whom an exemption was claimed will not qualify as a dependent for that year;

(d) When the employee no longer maintains "head of family" status; and

(e) When the employee is no longer entitled to the additional exemptions claimed pursuant to § 141.2(g).

142.8 An employee may file an amended certificate, increasing the number of exemptions, at any time after the occurrence of one (1) or more of the following events:

(a) When the employee claims an exemption for wife (or husband) who does not claim his or her own exemption on a separate certificate (for example, when the employee marries or a spouse stops work);

(b) When a child is born to, or adopted by, the employee;

(c) When the employee begins to support a dependent and expects to provide more than half (1/2) of the dependent's support for the current year;

(d) When the employee finds that an individual for whom he or she has not claimed an exemption will qualify as a dependent for the year;

(e) When the employee attains "head of household" status;

(f) When the employee or the employee's spouse attains the age of sixty-five (65);

(g) When the employee or the employee's spouse becomes blind; and

(h) When the employee's estimated itemized deductions for the taxable year exceed the allowable zero bracket amount by seven hundred and fifty dollars ($ 750).

142.9 The withholding exemption certificate shall be executed on the form prescribed by the Deputy Chief Financial Officer, and shall contain the following information:

(a) The name, District home address, and social security number of the employee;

(b) The number of withholding exemptions to which the employee is entitled under the Act, substituting one (1) withholding exemption for each seven hundred fifty dollars ($ 750) of personal exemption; and

(c) Certification, signature of the employee, and date of signature.

History

• SOURCE: Commissioners' Order 56-1431 effective July 24, 1956. 16 DCRR §§ 310.22 through 310.26: as amended by Commissioners' Order 71-6 effective February 25, 1971, 17 DCR 567 (March 8, 1971); Commissioners Order 60-85 effective January 14, 1960, 6 DCR 197 (January 25, 1960); by the Third Amendment to the Revenue Act of 1975 Act, D.C. Law 1-61, 22 DCR 4383 (February 17, 1976); and by Final Rulemaking published at 30 DCR 1255, 1257 (March 18, 1983).

9 DCMR § 143 WITHHOLDING STATEMENTS (FORM D-2)

143.1 On or before January 31st of each year, each employer shall furnish to each employee from whose wages tax has been withheld the original and one (1) legible copy of the Withholding Statement (Form D-2).

143.2 The original copy of the withholding statement shall be attached to the income tax return required to be filed by the employee for the taxable year beginning in the calendar year for which the withholding statement is made.

143.3 If a taxpayer filing on a calendar year basis files his or her return on or before January 15th of the following year and has not been furnished with the copies of the withholding statement, that taxpayer shall forward the original copy of the Form D-2 to the Deputy Chief Financial Officer upon receipt of it from the employer, and shall submit a statement that a return has been filed and that the withholding statement was not submitted with the return.

143.4 The Withholding Statement (Form D-2) shall show the following:

(a) The name and address of the employer;

(b) The employer's District business tax registration number;

(c) The name and address of the employee;

(d) The employee' social security number;

(e) The total amount of wages paid during the entire calendar year to the employee; and

(f) The amount of District income tax withheld during that calendar year.

143.5 The form of the Withholding Statement (Form D-2) shall be prescribed by the Deputy Chief Financial Officer.

143.6 An employer may apply to the Deputy Chief Financial Officer for permission to print that employer's own forms. The application shall be approved only if all sample copies of the proposed form submitted with the application are legible and conform substantially to the content and size of the prescribed form.

143.7 If employment ends before the close of the calendar year, the Withholding Statement (Form D-2) shall be furnished to the employees on the day on which the last payment of wages is made.

143.8 In the case of intermittent or interrupted employed, if there is reasonable expectation on the part of both employer and employee of further employment during the calendar year, the furnishing of the statement may be deferred to the date when the expectation of further employment during the calendar year ceases to exist.

143.9 If it becomes necessary to correct a Form D-2 after it has been delivered to an employee, the new statement shall be clearly marked "CORRECTED BY EMPLOYER."

143.10 If the withholding statement is lost or destroyed, the employer is authorized to furnish substitute copies to the employee; however, each substitute shall be clearly marked "REISSUED BY EMPLOYER."

143.11 Upon application, the Deputy Chief Financial Officer is authorized to grant an employer an extension of time, not to exceed thirty (30) days, in which to furnish employees with Withholding Statements.

History

• SOURCE: Commissioners' Order 56-1431 effective July 24, 1956, 16 DCRR §§ 310.27 and 310.28; as amended by Commissioners' Order 71-6 effective February 25, 1971, 17 DCR 567 (March 8, 1971).

9 DCMR § 144 ESTIMATED TAX: GENERAL PROVISIONS

144.1 A declaration of estimated tax shall be made by each individual residing or domiciled in the District when gross income not subject to District withholding tax shall result in a tax liability of more than one hundred dollars ($ 100.00) for the taxable year.

144.2 The requirement set forth in § 144.1 shall not apply to any of the following, unless such persons are domiciled within the District at any time during the taxable year:

(a) An elected official of the government of the United States;

(b) Any employee on the staff of an elected officer in the legislative branch of the government of the United States, if that employee is a bona fide resident of the State of residence of the elected officer;

(c) Any officer of the executive branch of the U.S. government whose appointment to the office held was by the President of the United States and subject to confirmation by the Senate of the United States, and whose tenure of office is at the pleasure of the President of the United States; or

(d) A Justice of the Supreme Court of the United States.

144.3 At the election of the taxpayer, any installment of estimated tax may be paid prior to the date prescribed for its payment.

History

• SOURCE: Commissioners' Order 56-1431 effective July 24, 1956, 16 DCRR 5§ 310.10, 310.29, and 310.32; as amended by Final Rulemaking published at 30 DCR 1255, 1258 (March 8, 1983).

9 DCMR § 145 DECLARATION OF ESTIMATED INDIVIDUAL INCOME TAX

145.1 The declaration of estimated tax shall be on Form D-40ES. The form may be obtained from the Deputy Chief Financial Officer. The form shall be executed and filed in accordance with the instructions on the form.

145.2 For the purpose of making a declaration, the amount of gross income which the taxpayer can reasonably be expected to receive or accrue (as the case may be, depending upon the method accounting used to compute net income); and the amount of the estimated allowable deduction, personal exemptions, and credit for dependents to be taken into account in computing the amount of the estimated tax shall be determined on the basis of facts and circumstances existing at the time prescribed for the filing of the declaration.

145.3 The declaration shall contain the following:

(a) The amount estimated as the tax for the taxable year;

(b) The amount estimated by the taxpayer as the credit for taxes withheld at the source for the taxable year; and

(c) The excess, if any, of the amount shown under paragraph (a) over the amount shown under paragraph (b), which excess shall be the estimated tax for the taxable year.

145.4 An amended declaration may be made in any case in which the taxpayer estimates that gross income, deductions, or credits will differ from the gross income, deductions, or credits reflected in the previous declaration.

145.5 An amended declaration may also be made based upon a change in the number of exemption to which the taxpayer may be entitled for the then current year.

145.6 Amended declarations shall be on Form D-40ES and marked "AMENDED."

145.7 No amended declaration may be filed during the quarterly period in which the original declaration was filed. Only one (1) amended declaration may be filed in any quarterly period subsequent to the quarterly period during which the original declaration was made.

145.8 In the case of a taxpayer on the calendar year basis, if an original declaration was previously filed, an amended declaration which is to be filed after September 15th may be filed on or before January 15th of the succeeding calendar year.

145.9 In the case of a taxpayer on the fiscal year basis, if an original declaration has previously been filed, an amended declaration which is to be filed after the 15th day of the ninth month of that fiscal year may be filed on or before the 15th day of the first month of the succeeding fiscal year.

History

• SOURCE: Commissioners' Order 56-1431 effective July 24, 1956, 16 DCRR §§ 310.30 and 310.33; as amended by Final Rulemaking published at 27 DCR 4929 (November 7, 1980), incorporating text of Proposed Rulemaking published at 27 DCR 3347 (August 1, 1980).

9 DCMR § 146 JOINT DECLARATIONS OF ESTIMATED TAX

146.1 A joint declaration may be made by husband and wife, in which case liability with respect to estimated tax shall be joint and several.

146.2 No joint declaration may be made if the husband and wife are separated under a decree of divorce or of separate maintenance, or if they have different taxable years.

146.3 If a joint declaration is made, but a joint return is not made for the taxable year, the estimated tax for that year may be treated as the estimated tax of either husband or wife, or may be divided between them.

146.4 The making of a joint declaration does not require the husband and wife to file a joint final return. However, if a husband and wife make separate declarations, they cannot file a joint return.

146.5 If a joint declaration is made but separate returns are made for the taxable year, the estimated tax for that year may be treated as the estimated tax of either the husband or the wife or may be divided between them in any proportion they may choose.

History

• SOURCE: Commissioners' Order 56-1431 effective July 24, 1956, 16 DCRR § 310.31; as amended by Final Rulemaking published at 28 DCR 5393 (December 18, 1981), incorporating text of Proposed Rulemaking published at 28 DCR 4112 (September 18, 1981).

9 DCMR § 147 FILING ESTIMATED TAX DECLARATIONS AND PAYMENT OF TAX

147.1 The Act requires that the first payment of tax shall always accompany the filing of the declaration first filed by the taxpayer.

147.2 If the taxpayer first meets the requirement for filing a declaration after September 15th (or in the case of a fiscal year taxpayer, after the 15th day of the 9th month of the fiscal year), the taxpayer may file an income tax return on or before the 15th day of the 1st month of the succeeding taxable year (in lieu of making a declaration) and the return shall be considered a declaration. In such cases, the entire tax shall be paid with the return.

147.3 If the taxpayer fails to file a declaration at the time required (including any extension of time), he or she shall pay, when the declaration is filed, all installments of estimated tax which he or she would have paid had he or she filed the declaration at the required time. Any remaining installments of tax shall be paid in the amounts and at the times they would be payable if the declaration had been filed at the required time.

147.4 In the case of an amended declaration filed pursuant to § 145.4, there shall be paid concurrently with the filing of the amended declaration an amount which, when added to amounts paid on declarations previously filed for the same taxable year, will aggregate the amount which would have been paid had the amended declaration been filed as the original declaration. Any remaining installments of tax to be paid after the filing of the amended declaration shall be based upon the amended declaration.

147.5 No refund of estimated tax previously paid shall be made except upon the filing of a final income tax return on Form D-40 after the close of the taxable year.

147.6 No extension of time shall be granted for filing a declaration of estimated tax and for paying any amount shown on the declaration to be due unless on or before the date that the declaration is required to be filed or payment of tax is required to be made an application for an extension is filed with the District.

147.7 Each application for extension of time to file shall state the reason why an extension of time is desired by the taxpayer.

147.8 Except for taxpayers who are abroad, no extension for filing declarations may be granted for a period longer than six (6) months.

147.9 The following table sets forth the time for filing of declarations and for making payment of estimated tax for taxpayers filing returns on a calendar year basis:

CALENDAR YEAR TAXPAYERS

If requirement is first met.

Declaration shall be filed on or before

Portion of tax payable

Due date of each payment

AFTER

BUT BEFORE

Beginning of a year

April 2

April 15

1/4

Date declaration is filed.

1/4

June 15

1/4

September 15

1/4

January 15 of succeeding taxable year

April 1

June 2

June 15

1/3

Date declaration is filed.

1/3

September 15

1/3

January 15 of succeeding taxable year.

July 1

Sept. 2

Sept. 15

1/2

Date declaration is filed.

1/2

January 15 of succeeding taxable year.

October 1

Jan. 1 of Succeeding taxable year

Jan. 15 of succeeding taxable year

All

Date declaration is filed.

147.10 The following table sets forth the time for filing declarations and payment of estimated tax or fiscal year basis taxpayers:

FISCAL YEAR TAXPAYERS

If requirement is first met.

Declaration shall be filed on or before

Portion of tax payable

Due date of each payment

AFTER

BUT BEFORE

Beginning of a fiscal year

2nd day of 4th month of the fiscal year

5th day of the 4th month of the fiscal year

1/4

Date declaration is filed.

1/4

15th day of 6th month of FY

1/4

15th day of 9th month of FY

1/4

15th day of the first month of the succeeding taxable year.

1st day of 4th month of the fiscal year

2nd day of 6th month of the the fiscal year

15th day of the 6th month of the fiscal year

1/3

Date declaration is filed.

15th day of 9th month of FY

15th day of the first month of the succeeding taxable year.

1st day of 7th month of the fiscal year

2nd day of 9th month of the fiscal year

15th day of the 9th month of the fiscal year

1/2

Date declaration is filed.

1/2

15th day of the first month of the succeeding taxable year.

1st day of 10th month of the fiscal year

1st month of the succeeding fiscal year

15th day of the 1st month of the succeeding fiscal year

All

Date declaration is filed.

147.11 In accordance with § 1(d) of Title XIII of the Act (Underpayment of Estimated Tax by Individuals), there is added to the tax fifteen percent (15%) per annum of the amount by which the tax exceeds estimated tax payments for the period of underpayment.

147.12 The period of underpayment referred to in § 147.11 shall run from the date the installment was required to be paid to whichever of the following dates is earlier:

(a) The fifteenth (15th) day of the fourth (4th) month following the close of the taxable year; or

(b) With respect to any portion of the underpayment the date on which that portion is paid.

History

• SOURCE: Commissioners' Order 56-1431 effective July 24, 1956, 16 DCRR §§ 310.9 and 310.35, as amended by Commissioners' Order 71-6 effective February 25, 1971, 17 DCR 567 (March 8, 1971); by Final Rulemaking published at 27 DCR 4929 (November 7, 1980), incorporating text by Proposed Rulemaking published at 27 DCR 3347 (August 1, 1980); by Final Rulemaking published at 30 DCR 1255, 1258 (March 18, 1983); by Final Rulemaking published at 32 DCR 1354, 1358 (March 8, 1985).

9 DCMR § 148 USE OF TAX RETURN AS A DECLARATION OF ESTIMATED TAX

148.1 If a taxpayer files a District income tax return for a calendar year on or before January 15th of the succeeding calendar year (or if the taxpayer is on a fiscal year basis, on or before the 15th day of the first month immediately following the close of that fiscal year) and pays in full the amount of tax shown on the return as payable, that return shall also be considered a declaration for the taxable year if the taxpayer first met the requirement with respect to filing declaration after September 1st of the taxable year (or the 1st day of the ninth month of the taxable year for fiscal year taxpayers).

148.2 If the tax shown on the return differs from the estimated tax shown in the previously filed declaration, the return shall be considered as an amended declaration the filing of which before the 15th day of the first month following the close of the taxable year is permitted.

148.3 If a taxpayer files on or before September 15th a timely declaration for that year and after that (on or before January 15th of the succeeding taxable year or corresponding date in the case of a taxpayer on a fiscal year basis) files a return for that year, and pays at the time of filing the tax shown by the return to be payable, the return shall be treated as an amended declaration timely filed.

148.4 For the purposes of this section a taxpayer may file a return, Form D-40, on or before the 15th day of the first month following the close of the taxable year even though he or she has not been furnished Form D-2 by his or her employer.

148.5 When filing a return in accordance with § 148.4, the taxpayer shall compute, as accurately as possible, his or her wages for the year and the tax withheld for which he or she is entitled to a credit; and shall report those wages and tax on the return, Form D-40, together with all other pertinent information necessary to the determination of tax liability for that year.

History

• SOURCE: Commissioners' Order 56-1431 effective July 24, 1956, 16 DCRR § 310.34: as amended by Final Rulemaking published at 27 DCR 4929 (November 7, 1980), incorporating text of Proposed Rulemaking published at 27 DCR 3347 (August 1, 1980).

9 DCMR § 149 DECLARATION AND PAYMENT OF ESTIMATED FRANCHISE TAX

149.1 Each corporation, financial institution, and unincorporated business required to make and file a franchise tax return under this article shall make and file a declaration of estimated tax if its franchise tax imposed by § 1 of Title 10 of the Act for the taxable year can reasonably be expected to exceed one thousand dollars ($ 1,000).

149.2 For the purpose of this section and § 150, any amount paid prior to the last date prescribed in § 3(a) of Title V of the Act for filing purposes, shall be deemed to be paid on the last date.

149.3 If an amendment of a declaration is filed, remaining installments, if any, shall be ratably increased or decreased (as the case may be) to reflect the respective increase or decrease in the estimated tax by reason of the amendment.

149.4 If any amendment is made after the fifteenth (15th) day of the ninth (9th) month of the taxable year, any increase in the estimated tax by reason of the amendment shall be paid at the time of making the amendment.

149.5 The declaration of estimated tax required of corporations, financial institutions, and unincorporated businesses shall be filed as follows:

IF THE REQUIREMENTS OF §1 OF TITLE 10 OF THE ACT ARE FIRST MET:

THE DECLARATION SHALL BE FILED ON OR BEFORE:

Before the 1st day of the 4th month of the taxable year:

The 15th day of the 4th month of the taxable year:

After the last day of the :3rd month and before the 1st day of the 6th month of the taxable year:

The 15th day of the 6th month of the taxable year:

After the last day of the 5th month and before the first day of the 9th month of the taxable year:

The 15th day of the 9th month of the taxable year:

After the last day of the 8th month and before the 1st day of the 12th month of the taxable year:

The 15th day of the 12th month of the taxable year.

149.6 If estimated franchise taxes are paid in installments, the amount of estimated tax (as defined in § 14 of Title 12 of the Act) with respect to which a declaration is required shall be paid in installments in accordance with the following table:

IF THE DECLARATION IS TIMELY FILED ON OR BEFORE THE 15th DAY OF THE FOLLOWING MONTH:

THE FOLLOWING PERCENTAGES OF THE ESTIMATED TAX SHALL BE PAID ON THE 15TH DAY OF THEFOLLOWING MONTH:

4th Month

6th Month

9th Month

12thMonth

4th month of the taxable year

25%

25%

25%

25%

6th month of the taxable year (but after the 15th day of the 4th month)

33 1/3

33 1/2

33 1/3

9th month of the taxable year (but after the 15th day of the 6th month)

50

50

12th month of the taxable year (but after the 15th day of the 9th month)

100

149.7 The addition to tax due by corporations and unincorporated businesses referred to in § 14(b) of Title XII of the Act shall not be imposed when the taxpayer has met the requirements described in §§ 6655(d) and (e) of the Internal Revenue Code.

History

• SOURCE: Commissioners' Order 56-1431 effective July 24, 1956, 16 DCRR §§ 310.39 through 310.43; as amended by 28 DCR 5393 (December 18, 1981), incorporating text of Proposed Rulemaking published at 28 DCR 4112 (September 18, 1981); by Final Rulemaking published at 30 DCR 1255, 1258 (March 18, 1983); and by Final Rulemaking published at 32 DCR 1354, 1359 (March 8, 1985).
• EDITOR'S NOTE: For the first taxable year beginning after January 1, 1970, only one-half (1 /2) of the percentages cited in § 149.6 is applicable.

9 DCMR § 150 OVERPAYMENT OF TAX AND REFUND SET-OFFS

150.1 If it is determined by the Deputy Chief Financial Officer that there has been an overpayment of any tax (whether as deficiency or otherwise), interest shall be allowed and paid upon that overpayment of tax at the rate of six per cent (6%) per annum from the date the overpayment was paid until the date of refund, except as otherwise provided in this section or the Act.

150.2 That part of any overpayment which was not assessed and paid as a deficiency or as additional tax shall bear interest only from the date on which a claim for refund was filed:

150.3 Interest on overpayments resulting from excessive withholding, excessive payments on declarations, or both, shall in no event begin to accrue prior to ninety (90) days after the overpayment is made or after the date of the filing of a final return, whichever is later.

150.4 For the purposes of this section, any tax deducted and withheld during any calendar year and any amounts paid except as provided for in § 149.2 prior to the fifteenth (15th) day of the fourth (4th) month after the close of the taxable year as estimated tax shall be deemed to have been paid on the fifteenth (15th) day of the fourth (4th) month following the close of the taxable year.

150.5 No interest may be paid unless a properly completed claim for refund is filed with the Deputy Chief Financial Officer.

150.6 If the final return filed by an individual for the taxable year shows an overpayment resulting from excessive withholding or excessive payments on declarations, or both, an automatic refund of the overpayment shall be made; Provided, that all of the withholding statements supporting all of the withholding taxes claimed as a credit is submitted with the final income tax return. No interest on overpayments shall be allowed or paid on refunds made in this manner.

150.7 If a final return shows an overpayment of less than two dollars ($ 2), it shall be refunded only upon application to the Deputy Chief Financial Officer.

150.8 No refund of estimated tax previously paid shall be made except upon the filing of a final income tax return on Form D-40 after the close of the taxable year.

150.9 Each claim for refund shall be in writing, under oath, and shall state the specific grounds upon which the claim is based.

150.10 Forms to be used in filing a claim for refund may be obtained from the Deputy Chief Financial Officer, upon request.

150.11 Notwithstanding any other provisions of this section, a refund due on the return of an individual may be intercepted by the Deputy Chief Financial Officer, Office of Tax and Revenue in accordance with the provisions of § 11(a) of Title XII of the Act (D.C. Code § 47-1812(a)(4)(4a)) as amended.

150.12 For the purposes of this section, the term "set-off" shall mean the amount of a District of Columbia income tax refund intercepted from an individual who is in default on a National Direct Student Loan or a Nursing Student Loan or who is in arrears on court-ordered child support payments, or any combination thereof.

150.13 For the purposes of this section, the phrase, "affected agency" means the following:

(a) The Department of Human Services for an arrearage of court-ordered child support payments; or

(b) The University of the District of Columbia for a default of a National Direct Student Loan or a Nursing Student Loan, or both.

150.14 For the purposes of this section, the phrase "authorized official" shall mean, as it applies to the affected agency, the Deputy Director of the Department of Human Services or the Vice President of the Financial Management Division of the University of District of Columbia.

150.15 The interception of a refund requested by married persons filing on a combined separate form (Columns A and B of Form D-40) shall be limited to the net refund attributable to the spouse who has a set-off. The following example illustrate the application of § 150.15:

Example A:

Husband

(Col A)

Refund

$ 200.00

Wife

(Col. B)

Refund

100.00

Total Refund

$ 300.00

The husband has a set-off. He is in arrears of child-support payments. Only two hundred dollars ($ 200.00) is subject to interception.

Example B:

Husband

(Col. A)

Refund

$ 200.00

Wife

(Col. B)

Balance

$ 250.00

Net Balance Due

$ 50.00

The husband is in arrears of child-support payments, a set-off, but no refund is due. Therefore, no interception can be made.

Example C:

Husband

(Col. A)

Balance Due

$ 100.00

Wife

(Col. B)

Refund

$ 150.00

Net Balance Due

$ 50.00

The wife is in default under the federal student loan program. A set-off is made. Although she computes a refund of one hundred and fifty dollars ($ 150.00), only the net refund of fifty dollars ($ 50) is subject to interception.

150.16 The net refund on a joint return (where only Column B of Form D-40 is completed) shall be subject to interception.

150.17 If the taxpayer contends that the intercepted refund is attributable in part to a spouse not subject to the set-off, the taxpayer shall submit a protest together with an amended Form D-40X utilizing the combined-separate filing status (Form D-40, Columns A and B) in accordance with the provisions of § 150.20 within the thirty (30) day period specified in paragraph (6) of § 11(a) of Title XII of the Act (D.C. Code § 47-1812.11(a)(5) and (6)).

150.18 The Bureau of Paternity and Child Support Enforcement, Department of Human Services (hereinafter the "Bureau") or the Office of Financial Management of the University of the District of Columbia (hereinafter the "Division") shall afford any taxpayer aggrieved by the mandate of the Act the opportunity for a hearing to determine the existence and the amount of a child-support or loan default obligation within thirty (30) days of receipt of the notice of intent to intercept a part or all of the District tax refund.

150.19 All taxpayer requests for a hearing under § 150.17 shall be made through the authorized official named in § 150.14, or his or her designee.

150.20 The aggrieved taxapayer's protest shall be limited to the following:

(a) The existence or amount of the offset;

(b) The division of a joint return; or

(c) The existence of new facts, issues, or evidence not previously decided.

150.21 Protests concerning the existence or amount of the set-off, or the existence of new facts, issues, or evidence not previously decided shall be reviewed by the affected agency.

150.22 Protests concerning the apportionment of joint returns shall be reviewed by the Office of Tax and Revenue.

150.23 The Office of Tax and Revenue or the affected agency shall maintain official records of each protest, including testimony and exhibits, regarding the interception of a refund when court-ordered child-support payments are in arrears, or when a Federal Student or Nurse Student Loan obligation is determined to be in default. Transcription of any proceedings shall not be required.

150.24 The Office of Tax and Revenue or the affected agency shall notify the taxpayer in writing of any determination as a result of a protest. The notification shall set forth the reason(s) for the determination.

150.25 Any person aggrieved by a determination of the authorized official of the Department of Human Services concerning the existence and the amount of a support obligation may request an adminsitrative review by the Chief, Bureau of Paternity and Child Support Enforcement.

150.26 Any person aggrieved by a determination of the Office of the Comptroller of the University of the District of Columbia concerning the existence and the amount of a Federal Student or Nurse Student Loan obligation may request an administrative review by the Vice President of Financial Management of the University of the District of Columbia.

150.27 The administrative review provided for in §§ 150.25 and 150.26 shall not include issues concerning the apportionment of joint returns. The determination of the Office of Tax and Revenue with respect to the apportionment of joint returns shall be final, and the determination shall not be subject to administrative review by the affected agency.

150.28 If no protest or request for administrative review is filed within a thirty (30) day period, the decision of the affected agency shall be final.

150.29 Any person aggrieved by a final determination of the Office of Tax and Revenue or an affected agency, made pursuant to the § 11(a) of Title 12 of the Act (D.C. Code § 47-1812.11(a)) may within six (6) months from the date of the determination appeal to the Superior Court of the District of Columbia, in the same manner and to the same extent as set forth in D.C. Code §§ 47-3303, 47-3304 and 47-3306-3308; Provided, that the person aggrieved shall have first filed a protest and request for hearing, and a request for administrative review as provided for in the Act and this chapter.

History

• SOURCE: Commissioners' Order 56-1431 effective July 24, 1956, 16 DCRR §§ 310.37 and 310.38; as amended by 27 DCR 4929 (November 7, 1980), incorporating text of Proposed Rulemaking published at 27 DCR 3347 (August 1, 1980); by Final Rulemaking published at 30 DCR 1255, 1258 (March 18, 1983); by Final Rulemaking published at 30 DCR 3763 (July 29, 1983); and by Final Rulemaking published at 35 DCR 2028 (March 11, 1988).

9 DCMR § 151 PENALTIES FOR FAILURE TO FILE RETURNS OR PAY TAXES

151.1 If any person fails to make and file a return within the time prescribed by law, (except in the case of an employer filing quarterly returns), unless it is shown that the failure is due to reasonable cause and not due to willful neglect, there shall be added to the amount required to be shown as the tax on that return five percent (5%) of the amount of the tax (if the failure is for not more than one (1) month), with an additional five percent (5%) for each additional month or fraction of a month during which the failure continues, not exceeding twenty-five percent (25%) in the aggregate.

151.2 For purposes of this section the amount of tax required to be shown on the return shall be reduced by the amount of any part of the tax which is paid on or before the date prescribed for payment of the tax and by the amount of any credit against the tax which may be claimed upon the return.

151.3 With respect to declarations of estimated tax, for the purposes of this section, the amount and due date of each installment shall be the same as if a declaration had been filed within the time prescribed showing an estimated tax equal to the correct tax reduced by the amount of credit for tax withheld.

151.4 In the case of any employer who is required to withhold taxes on wages, make a return of those taxes, and pay to the District the taxes required to be withheld, and who fails to withhold the taxes, make the return, or pay to the District the taxes required to be withheld, there shall be imposed on that employer a civil penalty (in addition to any criminal penalty provided by law) of five percent (5%) of the amount required to be shown as tax on the return if the failure is for not more than one (1) month, with an additional five percent (5%) for each additional month or fraction of a month during which the failure continues, not exceeding twenty-five percent (25%) in the aggregate.

151.5 If any corporation, financial institution, or unincorporated business fails to pay the amount of franchise tax within the time prescribed by law or by the Mayor or Council in pursuance of law, five percent (5%) of the tax shall be added to the tax for each month or fraction of a month that the failure continues, not to exceed twenty-five percent (25%) in the aggregate.

151.6 The penalty for failure to pay the franchise tax within the time prescribed shall be, in addition to all other penalties, prescribed by the Act.

History

• SOURCE: Commissioners' Order 56-1431 effective July 24, 1956, 16 DCR §§ 311.1 through 311.3; as amended by Commissioners' Order 67-579, 13 DCR 251 (May 1, 1967); by the Third Amendment to the Revenue Act of 1975 Act, D.C. Law 1-61, 22 DCR 4383 (February 12, 1976); and by Final Rulemaking published at 28 DCR 5393 (December 18, 1981), incorporating text of Proposed Rulemaking published at 28 DCR 4112 (September 18, 1981).

9 DCMR § 152 TRADE, BUSINESS, AND PROFESSIONAL LICENSES

152.1 Each person (except a registered or practical nurse, a corporation, or an unincorporated business) who has been exempted from the unincorporated business tax either because that person's trade or business cannot by law, custom, or ethics be incorporated or, because more than eighty percent (80%) of the gross income of that trade or business is derived from personal services actually rendered by the individual or members of the partnership or other entity, and in which capital is not a material income-producing factor, who engages in or conducts in the District of Columbia a trade or business, is required to apply for and obtain annually a trade, business, or professional license.

152.2 To enable the Deputy Chief Financial Officer to make a determination of the liability of any person for obtaining a license under the provisions of Title 14 of the Act, the Deputy Chief Financial Officer shall be authorized to require that person to furnish any information that the Deputy Chief Financial Officer may need to make a determination.

152.3 Application for license shall be filed with the Deputy Chief Financial Officer prior to December 1st of each year for the succeeding calendar year on forms to be furnished by the Deputy Chief Financial Officer.

152.4 Each application shall be accompanied by the license fee of one hundred dollars ($ 100).

152.5 Individuals working for others on a salary basis shall not be required to obtain a license pursuant to this section for their work as employees, nor shall registered or practical nurses be required to obtain a license.

152.6 Each person required to obtain a license who commences to engage in or conduct a trade, business, or profession on or after January 1, 1957, shall obtain a license within sixty (60) days after the date of commencement of the trade, business, or profession in the District of Columbia.

152.7 Licenses issued under Title 14 of the Act are in addition, and not in lieu of, all other licenses and permits required by law.

152.8 All licenses issued under Title 14 of the Act and this section shall be in effect for the duration of the calendar year for which issued, unless revoked as provided in Title 14 of the Act.

152.9 All licenses issued under this section shall expire at midnight on the 31st day of December each year.

152.10 No license may be transferred to any person.

History

• SOURCE: Commissioners' Order 56-1431 effective July 24, 1956, 16 DCRR §§ 310.3, 312.1 through 312.3; as amended by Final Rulemaking published at 32 DCR 1354, 1359 (March 8, 1985).

9 DCMR § 153 MODIFICATIONS TO INCOME AND DEDUCTIONS

153.1 Income from annuities and pensions may be modified, and the income may be deducted to arrive at the District adjusted gross income under the following circumstances:

(a) If, under the provisions of § 72(d)(1) of the Internal Revenue Code (relating to employees' contributions recoverable in three (3) years), the taxpayer's contribution to a pension or annuity has not been recovered;

(b) If amounts received as an annuity or under a pension plan were reported to the District as income under the three percent (3%) rule in effect for years prior to January 1, 1982 (§ 2(b)(2) of title III of the Act); and

(c) If a computation to support the deduction provided for under this subsection is submitted with the taxpayer's return.

153.2 The following example illustrates the application of this subsection (Taxpayer retired December 31, 1979. Taxpayer's contribution to pension $ 15,000.):

Year

Pension Income

Included in Federal Gross Income

Included in D.C. Gross Income

1980

$6.000

-0- (Cost not recovered)

$ 450 (3% Rule)

1981

6.400

-0- (Cost not recovered)

$ 450 (3% Rule)

1982

6,900

$ 4,300 (Excess over $ 15,000 cost)

$ 4,300* (Federal Conformity)

*The modification to District gross income would be nine hundred dollars ($ 900), since that amount was previously taxable in the District.

153.3 Income received from retirement plans may be reduced to the extent that contributions to the plans were subject to District income tax in years beginning prior to January 1, 1982.

153.4 The following example illustrates the application of this subsection: (Taxpayer contributed a total of four thousand dollars ($ 4,000) to an IRA plan for years beginning prior to January 1, 1982. In 1982, taxpayer will be eligible to withdraw the entire amount if he or she elects to do so.)

Year

Contrzibutions Included Federal Gross Income

Contributions Included in D.C. Gross Income

Years Prior to 1982

-0-

$ 4,000

1982

$ 4,000

$ 4,000*

*The modification to D.C. adjusted gross income would be four thousand dollars ($ 4,000), since this amount has been previously taxed by the District.

153.5 Interest received on the amount of contribution withdrawn shall be taxable.

153.6 Carryovers of charitable contributions are allowable in the same manner and to the same extent as permitted under § 170(d)(1) of the Internal Revenue Code; Provided, that no deduction shall be allowed for carryovers of contributions made prior to January 1, 1982.

153.7 In the case of two (2) earner married couples, the deduction permitted under § 221 of the Internal Revenue Code shall not be applicable to the District of Columbia individual income tax returns, since such deduction serves only to adjust federal tax rates.

153.8 If a taxpayer is an owner of an entity subject to the unincorporated business franchise tax, the individual taxable income of the taxpayer shall be reduced by his or her share of income taxed to the unincorporated business.

153.9 The dividend exclusions allowed to corporations under § 243 of the Internal Revenue Code shall not be applicable to the Act.

History

• SOURCE: Final Rulemaking published at 30 DCR 1255, 1258 (March 18, 1983).

9 DCMR § 154 FEDERAL ADJUSTMENTS TO RETURNS

154.1 The written notice referred to in § 10(e) of title XII of the Act (relating to changes or corrections to the taxpayers taxable income made by the Internal Revenue Service or a Court of the United States) shall be addressed to the Audit Division, Office of Tax and Revenue, P.O. Box 556, Washington, D.C. 20044.

154.2 Notification required pursuant to § 105.7 which is sent to any addressee other than the addressee specified in that subsection will not cause the statutory period of one hundred and eighty (180) days to begin for purposes of an assessment by the Mayor or his or her duly authorized representatives resulting from the adjustment to taxable income.

History

• SOURCE: Final Rulemaking published at 34 DCR 3846, 3848 (June 12, 1987).

9 DCMR § 155 DISTRICT OF COLUMBIA COLLEGE SAVINGS PROGRAM

155.1 Program Administration and Management: The Program shall be administered by the Chief Financial Officer in compliance with Section 529 of the Internal Revenue Code (including the regulations and administrative guidance thereunder), the D.C. Official Code, and this Regulation. The Program (and any trust established in connection therewith) shall be an instrumentality of the District of Columbia.

(a) Procedures and forms for use in the administration and management of the Program shall be subject to the approval of the Chief Financial Officer. Pursuant to its authority in §§ 47-4505(c) and 47-4506 of the D.C. Official Code, the Chief Financial Officer shall designate one or more program managers to assist or act on behalf of the Chief Financial Officer with respect to the administration and management of the Program. The Chief Financial Officer may create a trust Program, and shall serve, or, by a lawful written delegation order, appoint the Deputy Chief Financial Officer of the Office of Finance and Treasury and Treasurer of the District of Columbia, to serve, as trustee of any such trust. Any such trust shall be an instrumentality of the District of Columbia.

(b) The Chief Financial Officer may retain the services of consultants, administrators, and other personnel, as necessary, to administer the Program.

(c) The Chief Financial Officer may execute contracts and other necessary instruments, solicit and accept gifts, grants, loans or other aid from any source, impose and collect reasonable administrative fees for transactions involving the Program, procure insurance against a loss of Program assets, endorse insurance coverage written exclusively for the purpose of protecting an Account or its owner or Designated Beneficiary, designate terms under which money may be withdrawn from the Program, establish the methods by which the funds held in Accounts may be disbursed, establish additional procedural and substantive requirements for participation in, and the administration and promotion of, the Program, seek rulings and other guidance from the Internal Revenue Service and other federal agencies relating to the Program, and make changes to the Program required for the Participants in the Program to obtain the federal income tax benefits provided by § 529 of the Internal Revenue Code.

(d) The Chief Financial Officer shall solicit proposals from financial organizations to act as program manager(s) or account depository(ies). In selecting one or more financial organizations to serve as program manager or depository for the trust, the Chief Financial Officer shall consider the financial stability of the organization, the safety and suitability of the investment alternatives offered through the organization, the ability of the organization to satisfy applicable record-keeping and reporting requirements, the organization's plan for promoting the Program, the fees that the organization proposes to charge to Account Owners for opening new Accounts; the minimum initial deposit and minimum Contributions that the financial organization will require, the ability of the organization to accept electronic withdrawals, including payroll deduction plans, and other benefits to the District of Columbia or its residents.

(e) Any Program or investment management contract shall include terms requiring the financial organization to act at all times in a manner consistent with maintaining the Program as a Qualified Tuition Program; to keep adequate records of each Account, keep each account segregated from each other account, and to provide the Chief Financial Officer with the information necessary to prepare any required financial statements or reports; to compile information sufficient to provide periodic statements to Account Owners; if there is more than one program manager, provide the Chief Financial Officer with the information necessary to determine compliance with D.C. Code §47-4503; to provide the Chief Financial Officer or his or her designee with access to its books and records to the extent needed to determine compliance with the contract; to hold all Accounts for the benefit of the Account Owner, to submit to an independent audit at least annually, to provide the Chief Financial Officer with copies of all regulatory filings and reports made by the financial organization during the term of the contract or while it is holding any Accounts, to ensure that any description of the Program is consistent with the marketing plan developed in conjunction with the Chief Financial Officer. The Program Manager shall provide an accounting to the Chief Financial Officer on a periodic basis, but no less frequently than annually.

(f) The Chief Financial Officer may provide that an audit may be conducted by a certified public accounting firm of the operations of the program managers or depository at any time that the Chief Financial Officer deems necessary or appropriate, but no less frequently than annually.

(g) At least biennially, the Chief Financial Officer shall review the performance of each program manager or depository that has been appointed, taking into account, among other considerations, the factors described in Section 155.1(d), above, and shall consider whether it would be in the best interest of the Program and its Participants and Designated Beneficiaries to solicit alternative proposals from other financial organizations.

(h) If the Chief Financial Officer terminates, or determines not to renew, the contract of any financial organization appointed as a program manager or depository, the financial organization shall not accept any new Accounts; however, additional Contributions may be made to existing Accounts until the Chief Financial Officer arranges for the transfer of such Accounts to another financial organization that is selected as a program manager or depository.

155.2 [Reserved].

155.3 The Application Process and Eligibility Criteria for the Program shall be as follows:

(a) A Designated Beneficiary may be any individual designated as such in a Participation Agreement.

(b) An Account Owner may be any Person (1) who submits to the Program Manager a completed Participation Agreement, a Social Security or taxpayer identification number and an address for each of the Account Owner and the Designated Beneficiary in the United States or U.S. Territory, and (2) who otherwise meets the qualifications set forth in federal law, District of Columbia law and regulations governing the Program. An Account Owner may not be an individual who has not reached the age of majority (18).

(c) A Scholarship Sponsor that establishes a Scholarship Account shall provide the valid Social Security numbers or taxpayer identification numbers and addresses in the United States or U.S. Territory of each Designated Beneficiary of the application Scholarship Account prior to or in connection with a request for a Distribution.

(d) To participate in the Program, a prospective Account Owner must submit a completed Participation Agreement with either an initial Contribution of an amount of $25 if paid by electronic funds transfer or check, or $15 if paid by payroll deduction to the Program Manager designated by the Chief Financial Officer pursuant to D.C. Official Code § 47-4506.

(e) The Chief Financial Officer shall provide, or shall cause to be provided, information to each Account Owner regarding the terms and conditions for opening and maintaining an Account, restrictions on the substitution of Designated Beneficiaries, identification of the persons entitled to terminate the Account, the terms and conditions under which money may be wholly or partially withdrawn from the Program, including charges and fees that may be imposed for withdrawal, the probable tax consequences associated with Contribution to, and Distributions from, the Accounts, and other terms, conditions and provisions that the Chief Financial Officer considers appropriate.

(f) The Participation Agreement will provide that the Account Owner (and any successor Account Owner) will retain ownership of payments made under the Program through the opening of an Account in the name of the Account Owner and for the benefit of the Designated Beneficiary designated by such Account Owner (or the successor Account Owner).

(g) The Program Manager may charge an enrollment fee, not to exceed $25, to an Account Owner who is not a resident of the District of Columbia to open an Account in the Program. The Program Manager shall be responsible for collecting such fee directly from the Account Owner.

(h) Only one Account Owner is permitted per Account; however, anyone can make Contributions to an Account. One or more Account Owners may establish separate Accounts for a single Designated Beneficiary.

(i) Only one Designated Beneficiary is permitted per Account, except that Scholarship Accounts may be established for the benefit of one or more present or future Designated Beneficiaries. Each Participation Agreement shall provide that the Participation Agreement may be canceled upon the terms and conditions set forth therein.

(j) The D.C. Official Code and any amendment to the D.C. Official Code and/or regulations promulgated by the Chief Financial Officer will automatically amend the Participation Agreements and be incorporated by reference in the Participation Agreements. Any provision contained in a Participation Agreement which is inconsistent with the D.C. Official Code or this Regulation shall automatically be amended to bring such inconsistent provision into conformity with the D.C. Official Code and/or this Regulation.

(k) An annual fee of $10 may be imposed on an Account Owner who is a resident of the District of Columbia for the maintenance of the Account. An annual account maintenance fee of $15 may be imposed on an Account Owner who is not a resident of the District of Columbia.

(l) An Account Owner may transfer ownership of an Account to another Person eligible to be an Account Owner under the provisions of the D.C. Official Code and this Regulation, and upon receipt of a request for change of Account Owner that satisfies the criteria set forth in this Subsection, the transferee shall be considered the Account Owner for all purposes related to the Program, regardless of the source of subsequent Contributions.

(i) General Rule. Any such change of Account ownership shall be effective provided that the transfer (A) is irrevocable, (B) transfers all ownership, reversionary rights, and powers of appointments (i.e., power to change Designated Beneficiaries and to direct Distributions from the Account), and (C) is submitted to the Program Manager on a change of Account Owner form in such form as the Chief Financial Officer may specify from time to time and completed by the Account Owner (or, in the event of the death of the Account Owner, by the personal representative of his or her estate). Such forms shall be available from the Program website or from the Office of the Chief Financial Officer or the Program Manager.

(ii) An Account Owner may transfer all or a portion of the balance of an Account to another Account under the Program or into another Qualified Tuition Program for the benefit of the Designated Beneficiary or a Member of the Family of the Designated Beneficiary in accordance with procedures established by the Chief Financial Officer. Transfer requests shall be submitted to the Program Manager in such form as the Chief Financial Officer may specify from time to time and completed by the Account Owner. Such forms shall be available from the Program website or from the Office of the Chief Financial Officer or the Program Manager. A transfer to another Qualified Tuition Program to the credit of the same Designated Beneficiary shall be treated as a Nonqualified Withdrawal described in Section 155.5(c) if the transfer occurs within 12 months from the date of a previous transfer.

(m) Designation of Contingent Account Owners. Any Account Owner that is an individual person may designate a contingent Account Owner for the Account, to become the owner of the Account automatically upon the death of such Account Owner. Prior to the initial action taken by the contingent Account Owner following the death of the deceased Account Owner, the contingent Account Owner shall provide a certified copy of a death certificate sufficiently identifying said deceased Account Owner by name and Social Security number or taxpayer identification number, or such other proof of death as is recognized under applicable law.

(n) An Account Owner may cancel a Participation Agreement at any time by submitting to the Program a notice to terminate the Participation Agreement in such form as the Chief Financial Officer may specify from time to time. Any Nonqualified Withdrawal distributed as a result of such cancellation shall be subject to an addition to the tax imposed under Section 529(c)(6) of the Internal Revenue Code for federal and District income tax purposes. In addition, a Nonqualified Withdrawal shall trigger the recapture of previous deduction(s) taken in the District of Columbia as described in Section 155.8(b).

155.4 All Contributions to Accounts shall be in Cash either by mail to the Program Manager, by electronic transfer, or by payroll deduction Contributions subsequent to the initial Contribution shall be made in an amount of at least $25 per investment option if made by check or electronic transfer, or at least $15 per investment option if made through an employer-offered payroll deduction program.

(a) The maximum amount which may be contributed (including earnings on Contributions) by an Account Owner with respect to a Designated Beneficiary may be established by the Chief Financial Officer, from time to time, but in no event shall be more than the maximum amount permitted for the Program to qualify as a "qualify tuition program" pursuant to Section 529 of the Internal Revenue Code. The current Contribution limit (including earnings on Contributions) for all Accounts established on behalf of a single Designated Beneficiary is $500,000. This limit does not apply to Scholarship Accounts.

(b) Contributions for any Designated Beneficiary shall be rejected to the extent the Contribution would cause the total Contributions (including earnings on Contributions) to the Account, together with all Contributions to other Accounts established under the Program for the benefit of the same Designated Beneficiary, to exceed the maximum amount established by the Chief Financial Officer. A Contribution that exceeds the Contribution limit must be promptly withdrawn in a Nonqualified Withdrawal or transferred to another Account.

(c) To the extent such change would not cause the balance in an Account for the new Designated Beneficiary to exceed the Account Balance Limited on Contribution (including earnings on Contributions), an Account Owner may change the Designated Beneficiary designated for an Account to any Member of the Family of the current Designated Beneficiary at any time, without penalty, by submitting a completed change of Designated Beneficiary form to the Program Manager in such form as the Chief Financial Officer may specify from time to time. Such forms may be obtained from the Program website or the Office of the Chief Financial Officer or the Program Manager. Any change of Designated Beneficiary by an Account Owner to a person who is not a Member of the Family of the current Designated Beneficiary shall be a Nonqualified Withdrawal subject to the additional tax described in Section 529(c )(6) of the Internal Revenue Code.

(d) To the extent such change would not cause the balance in an Account for the new Designated Beneficiary to exceed the Account Balance Limit on Contribution (including earnings on Contributions), an Account Owner may transfer, in a Rollover Distribution, all or part of the Account Balance (1) to an Account or an account in another Qualified Tuition Program for another Designated Beneficiary who is a Member of the Family of the current Designated Beneficiary or (2) no more than once in any 12-month period, to an account in another Qualified Tuition Program for the same Designated Beneficiary, by submitting a completed request for transfer of Account funds in such form as Chief Financial Officer may specify from time to time. Such forms may be obtained from the Program website or the office of the Chief Financial Officer or the Program Manager.

(e) Separate Accounting. The Program, through the Program Manager, shall provide separate accounting (as provided in Section 529 of the Internal Revenue Code) for each Designated Beneficiary and for each Account.

155.5 Payment of Benefits and Withdrawals shall occur as follows:

(a) An Account Owner may request a Qualified Withdrawal from the Account upon thirty (30) days notice or such shorter period as may be authorized by the Chief Financial Officer by submitting a completed request for Qualified Withdrawal to the Program in such form as the Chief Financial Officer may specify from time to time.

(b) An Account Owner may request a Withdrawal Due to the Death or Disability of, or Scholarship to, a Designated Beneficiary from the Account by submitting a completed request to the Program in such form as the Chief Financial Officer may specify from time to time. Such forms shall be available from the Program website or from the Office of the Chief Financial Officer or Program Manager.

(c) An Account Owner may request a Nonqualified Withdrawal by submitting a completed request form to the Program Manager in such form as the Chief Financial Officer may specify from time to time. Such forms shall be available from the Program website or from the Office of the Chief Financial Officer or Program Manager. Any such Nonqualified Withdrawal shall be subject to the additional federal tax of 10% of Account earnings that is described in Section 529(c)(6) of the Internal Revenue Code.

(d) No distributions may be made within thirty (30) days of receipt by the Program Manager of a completed change of Account Owner form or request to change the mailing address of the Account Owner, unless the current Account Owner's signature is guaranteed on the request. Signature guarantee shall be provided through notarization or other procedure approved by the Program Manager. No Contribution may be withdrawn for 10 days after receipt thereof by the Program.

(e) An Account Owner or Designated Beneficiary may not pledge, transfer, or use any Account or other interest in the Program or any portion thereof as security for a loan, nor shall they be permitted to borrow any assets of an Account for any reason.

(f) An Account Owner may change the Designated Beneficiary of an Account in accordance with procedures established by the Chief Financial Officer. Any change in the Designated Beneficiary of an Account shall not be treated as a withdrawal if the new Designated Beneficiary is a Member of the Family of the former Designated Beneficiary.

(g) If there is a Distribution from an Account to an individual or for the benefit of an individual during a calendar year, the Distribution shall be reported to the Internal Revenue Service by the distributee to the extent required by Section 529(c)(3) of the Internal Revenue Code. The Program, through the Program Manager, shall provide the distributee with a 1099Q. The distributee of a Nonqualified Withdrawal will be required to include such nonqualified portion of the Distribution that is attributable to earnings on Contributions (plus Contributions previously deducted) in his or her gross income for purposes of the federal tax return and D.C. tax return, in the case such distributee is a D.C. resident, filed by the distributee.

(h) Statements shall be provided to each Account Owner on a periodic basis, but at least once each year within 60 days after the end of the 12-month period to which they relate. The statement shall identify the Contributions made during a preceding 12-month period, the total Contributions made to the Account through the end of the period, the value of the Account at the end of the period, Distributions made during the period, and any other information that the Chief Financial Officer shall require to be reported to the Account Owner. Statements and information relating to Accounts shall be prepared and filed to the extent required by federal and state tax law.

155.6 Investments under the Program shall occur pursuant to the following rules:

(a) The Chief Financial Officer (and any investment manager appointed by the Chief Financial Officer) shall invest the funds on deposit in the Program, together with any income thereon, in a manner that is reasonable and appropriate to achieve the objectives of the Program. In accordance with the investment policy statement and the D.C. Official Code, the Chief Financial Officer may invest funds received pursuant to the Program. Any such investment shall be made solely in the interest of the Account Owners and Designated Beneficiaries and for the exclusive purposes of providing benefits to Designated Beneficiaries for Qualified Higher Education Expenses and defraying reasonable expenses of administering and managing the Program.

(b) The Chief Financial Officer may appoint one or more investment managers (who may also be a program manager) to act on behalf of the Chief Financial Officer in the investment or reinvestment of all or part of the funds, including holding, purchasing, selling, assigning, transferring or disposing of any or all of the securities and investments in which such funds shall have been invested. Such investment manager shall be registered as an investment advisor with the United States Securities and Exchange Commission, unless exempt from registration.

(c) The Chief Financial Officer shall preserve, invest, and expend the assets of the Program solely for the purposes of the District of Columbia College Savings Act, as amended from time to time. The Chief Financial Officer shall not loan, transfer, or use the assets of the Program for any other purpose.

(d) An Account Owner or Designated Beneficiary may not directly or indirectly direct the investment of any Contributions or Earnings of the Program. This restriction shall be interpreted in accordance with applicable guidance under §529 of the Internal Revenue Code, including IRS Notice 2001-55. In general, IRS Notice 2001-55 permits an Account Owner to change investment strategies for an Account twice per calendar year or upon a change of Designated Beneficiary.

(e) Nothing in this Regulation shall create, or be construed to create, an obligation or guarantee of the District of Columbia, its agencies or instrumentalities, including without limitation any trust established by the Chief Financial Officer pursuant to Section 155.1(a) above, the Chief Financial Officer or any of his or her authorized delegates, including, without limitation, the selection of the Program Manager, or the trustee of any trust established pursuant to Section 155.1(a), for the benefit of an Account Owner or Designated Beneficiary with respect to (1) Contributions; (2) the rate of interest or other return on an Account; or (3) the payment of interest or other return on an Account.

155.7 An Administrative Fund for the Program will be set up under the following rules:

(a) Pursuant to the authority in the D.C. Official Code § 47-4503(c), § 47-4503(r), § 47-4505(b), § 47-4505(c)(5), and § 47-4506(b)(9), the Chief Financial Officer shall create an Administrative Fund to be used to pay the reasonable expenses of administering and managing the Program as permitted under applicable law, including expenses for legal, actuarial, accounting, advisory, consulting and other administrative and financial management services.

(b) All monies received by the Program other than Contributions from Account Owners (and earnings thereon) shall be deposited in the Administrative Fund, which shall be assets of the Trust and shall be considered part of the Trust. The assets of the Administrative Fund shall be deposited in money market fund or similar fund, as the Chief Financial Officer shall deem appropriate. All earnings on deposits in the Administrative Fund shall be credited to the Administrative Fund.

(c) The program manager, on behalf of the Program, may withdraw each month a fee of up to .025% (on an annualized basis) of the average daily net assets of the Program to pay for the administration and management of the Program, and shall deposit the amount of such fee in excess of those that it is authorized to retain pursuant to the agreement between the Program Manager and the Chief Financial Officer in the Administrative Fund.

(d) The Program may apply for, accept and expend gifts, grants, or donations from public or private sources to enable the Program to carry out its objectives. These funds shall be deposited in the Administrative Fund, and shall be expended only for the purposes for which they were received.

(e) No funds shall be withdrawn, and no expenses shall be paid from the Administrative Fund except to meet the purposes of the Program. All expenditures from the Administrative Fund shall require the written approval of the Deputy Chief Financial Officer of the Office of Finance and Treasury and Treasurer of the District of Columbia, Associate Treasurer or Program Administrator. All withdrawals from the Administrative Fund shall require the written approval of (i) the Deputy Chief Financial Officer of the Office of Finance and Treasury and Treasurer of the District of Columbia, Associate Treasurer, or the Program Administrator, and (ii) an authorized official of the Program Manager.

(f) The Administrative Fund shall be held, accounted for and disbursed separately from other Trust assets. The Chief Financial Officer or his or her designee, or the Program Manager, shall cause the Administrative Fund to be audited by a certified public accounting firm on a periodic basis, but no less frequently than annually, and shall provide an accounting to the Chief Financial Officer, the D.C. Council and the Advisory Board.

155.8 An Account Owner who files an income tax return in the District of Columbia may claim a deduction in an annual amount not to exceed $4,000 for Contributions made to all Accounts under the Program (provided that such Contribution does not cause the Account to exceed the limitation in Section 155.4(a)). With respect to married couples filing jointly, each spouse may subtract up to $4,000 annually for Contributions made to all Accounts under the Program for which that spouse is the Account Owner. A Rollover Distribution shall not be treated as a Contribution for purposes of this deduction.

(a) If an amount greater than $4,000 is contributed to one or more Accounts in any one tax year, the excess may be carried forward as a deduction, subject to the annual limit, in subsequent tax years within five years.

(b) Any deduction taken hereunder shall be subject to recapture with respect to a withdrawal or rollover taken within 2 years of the establishment of the Account for any reason other than the payment of Qualified Higher Education Expenses, Withdrawals Due to Death or Disability of, or Scholarship to, a Designated Beneficiary (except that only the amount of the scholarship is exempt from recapture), or the funds are transferred to another account under the “Rollover Distribution” provisions in 155.99. To implement the recapture, the Account Owner shall be required to add to his or her income an amount equal to the previous deduction(s) taken for Contributions to the income reported for the year in which the withdrawal or rollover is made.

(c) For District income tax return purposes, a part-year resident of the District of Columbia is allowed a deduction for contributions made to the District 529 Program only during the period of residency in the District of Columbia.

155.9 Distributions under the Program will be treated as follows for District tax Purposes:

(a) Qualified Withdrawals shall be exempt from District of Columbia income taxation.

(b) That portion of any Nonqualified Withdrawal that is attributable to Account Earnings shall be subject to District of Columbia income taxation in the year in which the withdrawal is made.

155.10 The provisions of Section 529 of the Internal Revenue Code, Treasury regulations (or final regulations), and administrative guidance promulgated thereunder, each as amended from time to time, are incorporated herein by reference with the same effect as if fully set forth herein. If any provision of this regulation, or the application of it to any person or circumstance, is determined to be invalid by a court of competent jurisdiction, such invalidity shall not affect other provisions of this regulation which can be given effect without the invalid provision or application, and to that end, the provisions of this regulation are severable.

155.11 - 155.98 [Reserved]

155.99 Definitions.

For purposes of this section, the following terms and phrases shall have the meanings ascribed to them below.

"Account" means a college savings account established under § 47-4503.

"Account Balance" means the aggregate Program unit values of an Account on a particular date.

"Account Owner" means the individual who enters into a college savings agreement under this chapter establishing an Account. The Account Owner may also be the Designated Beneficiary of the Account.

"Cash" shall include, but not be limited to checks drawn on a banking institution located in the United States in U.S. dollars (other than cashier checks, travelers checks or third-party checks exceeding $10,000), payroll deduction, and electronic funds transfer. Cash does not include property.

"Contribution" means a Cash contribution to an Account, but shall not include amounts added to an Account through a Rollover Distribution.

"D.C. Official Code" means the Official Code of the District of Columbia.

"Designated Beneficiary" means an individual who is:

(1) the individual designated at the commencement of participation in the Program as the beneficiary of amounts paid (or to be paid) to the Program;

(2) in the case of a change in Designated Beneficiaries, the individual who is the new beneficiary; or

(3) in the case of an interest in a qualified tuition program purchased by a State or local government (or agency or instrumentality thereof) or an organization described in section 501(c)(3) of the Internal Revenue Code and exempt from taxation under section 501(a) of the Internal Revenue Code as part of a scholarship program operated by such government or organization, the individual receiving such interest as a scholarship.

"Disability" means, with respect to a Designated Beneficiary, any condition that causes such Designated Beneficiary to be "disabled" within the meaning of Section 530(d)(4)(B)(ii) of the Internal Revenue Code.

"Eligible Institution" has the same meaning as "eligible educational institution" in section 529(e)(5) of the Internal Revenue Code, and generally means K-12 education, accredited post-secondary educational institution offering credit towards a bachelor's degree, and associate's degree, a graduate level or professional degree, or another recognized post-secondary credential. Certain proprietary institutions, apprenticeships and post-secondary vocational institutions and certain institutions located in foreign countries are also eligible institutions. To be an eligible institution, the institution must be eligible to participate in the U.S. Department of Education student aid programs.

"Internal Revenue Code" means the Internal Revenue Code of 1986, approved October 22, 1986 (100 Stat. 2085; 26 U.S.C. § 1 et seq.), as amended from time to time.

"Member of the Family" means, with respect to any Designated Beneficiary;

(A) the spouse of such Designated Beneficiary;

(B) a son or daughter of the Designated Beneficiary, or a descendent or either;

(C) a stepson or stepdaughter of the Designated Beneficiary;

(D) a brother, sister, stepbrother, stepsister of the Designated Beneficiary;

(E) the father or mother of the Designated Beneficiary, or an ancestor of either;

(F) a stepfather or stepmother of the Designated Beneficiary;

(G) a son or daughter of a brother or sister of the Designated Beneficiary;

(H) a brother or sister of the father or mother of the Designated Beneficiary;

(I) a son-in-law, daughter-in-law, father-in-law, mother-in-law, brother- in-law, or sister-in-law of the Designated Beneficiary;

(J) the spouse of any individual described in subparagraphs (B) through (I); and

(K) any first cousin of such Designated Beneficiary.

"Nonqualified withdrawal" means a withdrawal from an Account:

(A) Other than a qualified withdrawal;

(B) Made as the result of the death or disability of the Designated Beneficiary of an Account; or

(C) Made on account of a scholarship.

"501(c)(3) Organization" means an organization described in Section 501(c)(3) of the Internal Revenue Code and exempt from taxation under Section 501(a) of the Internal Revenue Code.

"Participation Agreement" means a college savings agreement as defined in the D.C. Official Code, which serves as an application for participation in the Program submitted by a prospective Account Owner to the Program Manager designated by the Chief Financial Officer.

"Participant" means as Account Owner.

"Person" means any individual, estate, association, unincorporated organization, trust, custodian or guardian, partnership, limited liability company corporation, the District of Columbia or any department thereof, or any political subdivision of the District of Columbia.

"Program" means the District of Columbia College Savings Program established under § 47-4502.

"Program Administrator" means the Program Director for the 529 D.C. College Savings Program.

"Program Manager" means the person selected by the Chief Financial Officer to administer the Program. The current Program Manager is Ascensus College Savings.

"Qualified Higher Education Expenses" means:

(A) Tuition, fees, and the costs of books, supplies, and equipment required for enrollment or attendance of a qualified Designated Beneficiary at an Eligible Institution; or

(B) Certain costs of the room and board of a Designated Beneficiary for any academic period during which the student is enrolled at least half-time at an Eligible Institution;

(C) In the case of a Designated Beneficiary with special needs, expenses for special needs services which are incurred in connection with their enrollment or attendance at an Eligible Institution; and

(D) Expenses for the purchase of computer or peripheral equipment (as defined in section 168(i)(2)(B) of the Internal Revenue Code), computer software (as defined in section 197(e)(3)(B) of the Internal Revenue Code), or Internet access and related services, if such equipment, software, or services are to be used primarily by the Designated Beneficiary during any of the years the Designated Beneficiary is enrolled at an Eligible Institution.

"Qualified Tuition Program" means a program established and maintained by a State or agency or instrumentality thereof or by one or more eligible education institutions under which a person may prepay tuition or make contributions to a savings account established for the purpose of meeting the Qualified Higher Education Expenses of the Designated Beneficiary of the Account and which meets the requirements of Section 529 of the Internal Revenue Code.

"Qualified Withdrawal" means a withdrawal from an Account to pay the qualified higher education expenses of the Designated Beneficiary of the Account.

"Rollover Distribution" means (A) a transfer of funds withdrawn from one Account and deposited to another Account within 60 days of the withdrawal, (B) a transfer of funds from another Qualified Tuition Program to an Account within 60 days of withdrawal of the funds, (C) a transfer of funds to another Qualified Tuition Program from an Account within 60 days of withdrawal of the funds, in each case to the extent permitted as a rollover Distribution under Section 529(c)(3)(C) of the Internal Revenue Code, or (D) a transfer of funds withdrawn from one Account and deposited to a Qualified ABLE Account, as defined in D.C. Official Code § 47-4901(1) within 60 days of the withdrawal of the funds. The transfer must either be made for the benefit of a new Designated Beneficiary who is a Member of the Family of the prior Designated Beneficiary, or, with respect to (B), (C), and (D), for the benefit of the same Designated Beneficiary provided that no other such transfer for the benefit of such Designated Beneficiary has been made within the previous 12 months.

"Scholarship" means any scholarship and any allowance or payment described in Section 530(d)(4)(B)(iii) of the Internal Revenue Code.

"Scholarship Account" means an Account in the Program established by an Account Owner that is a Scholarship Sponsor and maintained for the benefit of one or more current and/or future Designated Beneficiaries.

"Scholarship Sponsor" means the District of Columbia, or an agency or instrumentality of the District of Columbia, or a Section 501(c)(3) Organization, in each case who establishes one or more Accounts as part of a scholarship Program:

"Trust" means the trust established by the Chief Financial Officer with one or more depositories to hold the assets of the Program, other than the Administrative Fund.

"Withdrawal Due to Death or Disability of, or Scholarship to, a Designated Beneficiary" means a Distribution from an Account established under the Program (A) made because of the death or Disability of the Designated Beneficiary, or (B) made because of the receipt of a Scholarship by the Designated Beneficiary to the extent that such Distribution does not exceed the amount of such Scholarship.

History

• SOURCE: Final Rulemaking published at 51 DCR 739 (January 16, 2004); as amended by Final Rulemaking published at 68 DCR 013108 (December 10, 2021). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 155

9 DCMR § 156 COMBINED REPORTING: OUTLINE; PURPOSE; GENERAL RULE; EFFECTIVE DATE; AND DEFINITIONS

156.1 Outline. 156, et seq. is organized as follows:

156. Outline, Effective Date, Purpose; General Rule; Revocation of Election to File Consolidated Returns; and Definitions

157. Composition of the Combined Group

158. Determination of a Unitary Business; Commonly Controlled; and Unitary Presumptions

159. Passive Holding Companies

160. Statute of Limitations

161. Water’s-Edge Determination

162. Worldwide Reporting; and Initiation and Withdrawal of Election

163. Determination of Taxable Income or Loss Using a Combined Report

164. Combining Special Apportionment Formulas

165. Net Operating Losses

166. Tax Credits

167. Taxable Year; Part-Year Members

168. Designated Agent; Liability

169. Apportionment

170. Unincorporated Business Entities / Partnerships

171. Minimum Tax Payable

172. Estimated Tax Payments

173. Real Estate Investment Trusts

174. Regulated Investment Companies

175. FAS 109 Deduction

176. Time and Place for Filing Tax Returns; Extensions; Closing Out Separate Entities

156.2 Effective date. The combined reporting regulations shall be effective for tax years beginning after December 31, 2010.

156.3 Purpose. The purpose of the combined reporting regulations is to provide rules for the combined reporting of income as required by D.C. Official Code § 47-1805.02a (2005 Repl.) which requires a person subject to tax under chapter 18 of title 47 of the D.C. Official Code that is engaged in a unitary business with one or more persons to compute its share of the combined unitary income or loss attributable to the District using a combined report.

156.4 General rule. A person is required to file a combined report when it is subject to tax under chapter 18 of title 47 of the District of Columbia Official Code and is engaged in a unitary business with one or more other persons that are required to be included in a combined report under D.C. Official Code § 47-1805.02a (2005 Repl.) and the combined reporting regulations. The combined report shall be filed with the taxpayer member’s tax return, and shall include the income and apportionment information of all persons that are members of the combined group and such other information as required by the Chief Financial Officer.

156.5 Revocation of election to file consolidated returns. Any taxpayer election that was made under D.C. Official Code § 47.1805.02(5)(B) and (C) (2005 Repl.) and 9 DCMR § 109 is revoked for tax years beginning after December 31, 2010.

156.6 Definitions of terms and phrases. For purposes of combined reporting, the following terms and phrases shall have the meanings ascribed:

(a) Combined group - the group of all persons whose income and apportionment factors are required to be taken into account under D.C. Official Code § 47-1810.02 (2005 Repl.) and the DCMR in determining the taxpayer's share of the net business income or loss apportionable to the District;

(b) Combined group member – a person for which any part of such person’s net income or loss is subject to combination and is, therefore, required to be included in a combined report;

(c) Combined report - a computational schedule or schedules, as required by D.C. Official Code § 47-1805.02a, and the combined reporting regulations or any other rules or procedures established by the Chief Financial Officer, which are to be attached to a taxpayer member's tax return and which report the income and apportionment information of all persons that are members of the taxpayer member's combined group, as well as any supporting information required by the Chief Financial Officer;

(d) Combined reporting regulations/rules – the rules provided under 9 DCMR §§ 156 through 175;

(e) Combined unitary income - the combined group’s net income or loss attributable to the unitary business which is subject to combination under D.C. Official Code § 47-1805.02a before apportionment. Combined unitary income excludes any amounts that are not subject to combination pursuant to the water’s-edge rules unless the taxpayer has made a valid worldwide election;

(f) Commonly owned or controlled - where more than fifty percent (50%) of the ownership interest and/or voting control of each member of the group is directly or indirectly owned by a common owner or owners, either corporate or non-corporate. In determining common ownership or control, the Chief Financial Officer may take into account any plan or arrangement, whether existing by operation of law, by contract, or otherwise, for bestowing or shifting ownership or voting control, in addition to the terms of any actual stock ownership or control;

(g) Commonly controlled group – a commonly controlled group exists where there is common ownership or control of stock representing more than fifty percent (50%) of the ownership interest and/or voting power of the members in the group;

(h) Corporation – Any entity or organization of any kind treated as a corporation for tax purposes under the laws of the District, wherever located, which, were it doing business in the District, would be subject to the tax imposed under chapter 18 of title 47 of the D.C. Official Code. A corporation includes any S corporation as defined in I.R.C. § 1361(a);

(i) Designated agent – the taxpayer member of the combined group who is responsible for acting on behalf of the group for matters relating to the combined report including filing the combined report See 9 DCMR § 168;

(j) Person – shall have the same meaning as defined under D.C. Official Code § 47-1801-01(39) except a “person” within the meaning of the combined reporting statute and regulations does not include individuals;

(k) Taxpayer member – A member of a combined group that has nexus in the District and is therefore subject to tax on its income under chapter 18 of title 47 of the D.C. Official Code.

(l) Unitary business – shall have the same meaning as defined under D.C. Official Code § 47-1801.04(55)(A). See 9 DCMR § 158.1.

(m) Water’s-edge rules - the rules provided under 9 DCMR § 161 under which some or all of a person’s items attributable to a unitary business are not subject to combination because of the degree of the person’s activity outside the United States; and

(n) Worldwide election - an election by the designated agent of the combined group on behalf of all of the members of the group to treat as the combined group, for purposes of 9 DCMR §§ 156 through 175, all persons that are engaged in the unitary business, wherever located, on such terms and in keeping with such requirements as are further explained by the combined reporting rules, forms, instructions or other notices that the Chief Financial Officer issues.

History

• SOURCE: Final Rulemaking published at 59 DCR 10875 (September 14, 2012).

9 DCMR § 157 COMBINED REPORTING: COMPOSITION OF THE COMBINED GROUP

157.1 General rule. Where a person subject to tax under chapter 18 of title 47 of the D.C. Official Code is engaged in a unitary business with one or more other persons that are related by common ownership, the taxpayer member must determine its tax liability based upon the income and apportionment information of all persons included in the combined group using a combined report unless it is an excluded person under 9 DCMR § 157.3.

157.2 Included persons. Persons that are required to be included in a combined group and therefore required to be included in a combined report filed by the designated agent of a combined group shall include all persons of the kind that are subject to tax or would be subject to tax if doing business in the District, under chapter 18 of title 47 of the D.C. Official Code, even if those persons do not have nexus. The persons to be included in a combined group include, but are not limited to, any unincorporated business, financial institution, utility company, transportation company, S corporation as defined in I.R.C. § 1361(a), a real estate investment trust (REIT) as referenced under I.R.C. §§ 856 through 859, and a regulated investment company (RIC) as referenced under I.R.C. §§ 851 through 855.

157.3 Excluded persons. Persons that are not included in a combined group and therefore not included in a combined report filed thereby, irrespective of whether they are engaged in a unitary business with a member of such group, include, unless such persons are otherwise required to be included under D.C. Official Code § 47-1805.02a: any insurance company subject to premium tax under D.C. Official Code § 47-2608 (2005 Repl.) or § 31-3403.01 (2005 Repl.) exempt organization including an organization that has unrelated business income subject to tax under I.R.C. § 511; Qualified High Technology Company (QHTC); person, regardless of the place incorporated or formed, if the average of its property, payroll, and sales factors outside the U.S. is eighty percent or more; or as otherwise provided in chapter 18 of title 47 of the D.C. Official Code.

History

• SOURCE: Final Rulemaking published at 59 DCR 10875, 10878 (September 14, 2012).

9 DCMR § 158 COMBINED REPORTING: DETERMINATION OF A UNITARY BUSINESS; COMMONLY CONTROLLED; AND UNITARY PRESUMPTIONS

158.1 Determination of unitary business. The term “unitary business” is defined in D.C. Official Code § 47-1801.04(55)(A) as a single economic enterprise that is made up either of separate parts of a single business entity or of a commonly owned or controlled group of business entities that are sufficiently interdependent, integrated, and interrelated through their activities so as to provide synergy and mutual benefit that produces a sharing or exchange of value among them and a significant flow of value to the separate parts. Under D.C. Official Code § 47-1801.04(55)(A), the definition of “unitary business” shall be construed to the broadest extent permitted by the U.S. Constitution.

158.2 Commonly controlled. A unitary business may consist of a single entity or of a group of two (2) or more related entities. A group of related entities may satisfy the commonly controlled requirement of a unitary business if they are related in any of the following ways:

(a) The entities are related within the meaning of the provisions of I.R.C. § 267. By reference, this includes the rules in I.R.C. § 707(b), relating to partnerships;

(b) The entities are related under I.R.C. § 1563, which defines a "controlled group of corporations" for federal income tax purposes; and

(c) The entities in the same "commonly controlled group" for District purposes. "Commonly controlled group" has the stated meaning in 9 DCMR § 156.6(g) and includes any of the following:

(1) A parent corporation and any one (1) or more corporations or chains of corporations that are related to the parent corporation by direct or indirect ownership, if the parent corporation owns stock representing more than fifty percent (50%) of the voting power of at least one (1) of the related corporations or if the parent corporation or any of the related corporations owns stock that cumulatively represents more than fifty percent (50%) of the voting power of each of the related corporations;

(2) Any two or more corporations if a common owner, regardless of whether the owner is a corporate entity, directly or indirectly owns stock representing more than fifty percent (50%) of the voting power of the corporations or related corporations; or

(3) Any two or more entities including unincorporated businesses or partnerships if a common owner, regardless of whether the owner is a corporate entity, directly or indirectly owns more than fifty percent (50%) of interest in the entities.

158.3 Stock attribution rules. A shareholder is considered to have indirect ownership

of stock or to indirectly own stock if the shareholder has constructive ownership of the stock within the meaning of I.R.C. § 318, except as provided in (a) and (b) below.

Example: Corporation A owns stock representing forty percent (40%) of the voting power of Corporation B and has a fifty percent (50%) interest in Partnership C. Partnership C owns stock representing thirty percent (30%) of the voting power of Corporation B. Pursuant to I.R.C. § 318, Corporation A constructively owns stock representing fifty-five percent (55%) (40% + (50% x 30%)) of the voting power of Corporation B.

(a) In applying I.R.C. § 318(a)(2), if a partnership, estate, trust, or corporation owns, directly or indirectly, more than fifty percent (50%) of an entity, it shall be considered to own all of the stock or other ownership or control interests owned by that entity.

Example: Corporation D owns stock representing ten percent (10%) of the voting power of Corporation E and has a seventy-five percent (75%) interest in Partnership F. Partnership F owns stock representing forty-five percent (45%) of the voting power of Corporation E. Corporation D is considered to constructively own stock representing fifty-five percent (55%) (10% + 45%) of the voting power of Corporation E. This is because Corporation D owns more than fifty percent (50%) of Partnership F and is therefore considered to own all of the Corporation E stock owned by Partnership F.

(b) If a person has an option to acquire stock or other ownership interests in an entity, the stock or ownership interests are not considered owned by the person unless the Chief Financial Officer determines it to be necessary to prevent tax avoidance.

158.4 Voting power.

(a) A shareholder has ownership or control of stock representing more than fifty percent of the voting power of a corporation only if the shareholder has ownership or control of more than fifty percent (50%) of the total combined voting power of all classes of stock of the corporation entitled to vote.

(b) A group of two (2) or more corporations need not be commonly owned to be commonly controlled. A group of corporations may be a commonly controlled group if stock representing more than fifty percent (50%) of the voting power in each corporation are interests that cannot be separately transferred. If a group of two (2) or more corporations would be considered stapled entities under I.R.C. § 269B and the regulations applicable thereto, without regard to whether the corporations are foreign or domestic, the corporations shall be considered part of a commonly controlled group.

(c) The mere ownership of stock entitled to vote does not by itself mean that the shareholder owning the stock has the voting power of the stock. If there is any agreement, whether express or implied, that any shareholder will not vote its stock or will vote it only in a specified manner, or that shareholders owning stock having fifty percent (50%) or less of the total combined voting power will exercise voting power normally possessed by a majority of stockholders, the Chief Financial Officer may presume that the nominal ownership of the voting power is not determinative of which shareholders actually hold the voting power and may disregard the nominal ownership. This presumption may be rebutted by the taxpayer.

(d) If a shareholder owns shares of stock of a corporation which has another class of stock outstanding, the voting power of that other class of stock will be deemed owned by any person or persons on whose behalf it is exercised if the facts indicate that the shareholders of that other class of stock do not exercise their voting rights independently or fail to exercise their voting rights. If the voting power in that other class of stock is not exercised and the percentage of voting power of that class of stock is substantially greater than its proportionate share of the corporate earnings, the Chief Financial Officer may presume that the principal purpose of the arrangement was to avoid the inclusion of the corporation in the commonly controlled group and may disregard the voting power.

158.5 Common owner or owners. The common owner or owners need not be combined group members, and the common owner or owners may be persons other than corporations.

158.6 Multiple unitary businesses. A commonly controlled group may be engaged in one or more unitary businesses. Therefore, a commonly controlled group may contain more than one combined group.

158.7 Sufficiently interdependent, integrated, and interrelated.

(a) In general, the segments in a commonly owned or controlled economic enterprise are considered a unitary business if their activities generate synergy and mutual benefit that produces a sharing or exchange of value among them and a significant flow of value to the separate parts. For example, the segments in a commonly controlled economic enterprise may be considered a unitary business when the operations of the segments contribute to or depend upon each other in such a way as to result in functional integration between the segments; and

(b) “Functional integration” refers to, but is not limited to, transfers between or pooling among business segments of such items as products or services, technical information, marketing information, distribution systems, purchasing, and intangibles (such as patents, copyrights, formulas, processes, trade secrets, and the like) in a manner which substantially affects the segments' business operations related to such activities as development, manufacture, production, extraction, distribution, or sale of its products or services.

158.8 Sharing, exchange, and flow of value. Segments in a commonly controlled economic enterprise have sharing or exchange of value among them and a significant flow of value to the separate parts, and thus are a unitary business, if any of the following are true:

(a) The segments in the enterprise contribute or are expected to contribute in a nontrivial way to each other’s profitability;

(b) Each segment in the enterprise is either dependent on, or is relied upon by, one (1) or more other segments in the enterprise for achieving one (1) or more nontrivial business objectives;

(c) The enterprise offers one (1) or more segments, some economies of scale, or economies of scope that benefit the enterprise; or

(d) The prices charged on transactions between segments in the enterprise are inconsistent with the arms-length principle. However, if these prices are consistent with the arms-length principle, that fact does not negate, in any way, the existence of a unitary business.

158.9 Examples of flow of value. Activities between segments that constitute a flow of value between them include any of the following:

(a) Assisting in acquisition of assets;

(b) Assisting with filling personnel needs;

(c) Lending funds, guaranteeing loans, or pledging assets;

(d) Interplay in the area of corporate expansion, including but not limited to common future planning or development of the enterprise;

(e) Providing technical assistance, general operational guidance, or overall operational strategic advice;

(f) Supervising or common management;

(g) Common offices, manufacturing facilities, or distribution systems (including but not limited to transportation facilities, warehousing facilities, or order fulfillment systems, inventory control systems or other distribution systems or subsystems);

(h) Centralized purchasing, marketing, advertising, accounting, or research and development;

(i) Intercorporate sales or leases, including equipment and real estate;

(j) Intercorporate services, including administrative, data management, computer support, employee benefits, human resources, such as training and recruiting programs and hiring and personnel policies, insurance, tax compliance, legal, financial, and cash management services;

(k) Intercorporate use of proprietary materials, including trade names, trademarks, service marks, patents, copyrights, trade secrets or other intellectual property;

(l) Centralized executive force; and

(m) Common employees, including sales force;

158.10 Evidence of unitary business factors. The determination of whether or not the operations of business segments are a unitary business will turn on the facts and circumstances of the case. Several factors may evidence that the operations of business segments are a unitary business. Generally, several functionally integrating factors will exist in a unitary business, although a unitary business may exist as a result of few factors or even one (1) factor, if the factor or factors involved are particularly significant. In determining whether a unitary business exists, factors should not be examined in isolation. Instead, it should be determined whether the factors which are present, in combination, result in a functionally integrated business. The presence or absence of any one (1) factor or any particular factors is not necessarily determinative as to whether a unitary business exists, although absence of all of the factors will generally result in a finding that a unitary business does not exist.

158.11 Presumptions. Presence of a unitary business will be presumptively shown by the presence of the following:

(a) Same type of business. Business activities that are in the same general line of business generally constitute a single unitary business, as, for example in the case of multiple entities that comprise a multistate grocery chain;

Steps in a vertical process. Business activities that comprise different steps in a vertically structured business almost always constitute a single unitary business. For example, a business engaged in the exploration, development, extraction, and processing of a natural resource and the subsequent sale of a product based upon the extracted natural resource, is engaged in a single unitary business, regardless of the fact that the various steps in the process are operated substantially independently of each other with only general supervision from the business's executive offices; and

(c) Strong centralized management. Business activities which might otherwise be considered as part of more than one (1) unitary business may constitute one (1) unitary business when there is a strong central management, coupled with the existence of centralized departments for such functions as financing, advertising, research, or purchasing. Strong centralized management exists when a central manager or group of managers makes substantially all of the operational decisions of the business. For example, some businesses conducting diverse lines of business may properly be considered as engaged in only one (1) unitary business when the central executive officers are actively involved in the operations of the various business activities and there are centralized offices which perform for the business activities the normal matters which a truly independent business would perform for itself, such as personnel, purchasing, advertising, financing, or research and development.

(d) Newly formed entities. When an entity that is a member of a unitary group forms another entity, a presumption of unity arises between the two (2) entities as of the date of formation. Any party may rebut the presumption by proving that the entities are not unitary or became unitary at a later date. For purposes of this rule, a newly formed entity includes but is not limited to:

(1) A corporation that is formed through a corporate reorganization, a corporate divestiture, split-up, or split-off;

(2) One (1) or more new subsidiaries is acquired and substantially all of the assets and operations of an existing division or operation are placed into or under the administrative or operational responsibility of the acquired corporation;

(3) A partnership or unincorporated business is created or formed; or

(4) An existing corporation changes its form of doing business from one (1) organizational structure to a new organizational structure or merges into an existing or newly formed entity.

(e) Newly acquired entities.

(1) When an entity acquires another entity so that the acquired entity is a member of a commonly controlled group for the first time, it shall be presumed that the acquiring and acquired entities are not engaged in a unitary business for the purchaser’s taxable year that includes the acquisition. If the purchaser is already a combined group member, the taxable year that includes the acquisition is the taxable year of the combined group.

(2) The presumption may be rebutted by proving that the entities are unitary. If the presumption is rebutted, then the entities shall be considered unitary as of the date of acquisition, unless the evidence shows that unity was established as of another date.

(3) In the succeeding reporting period after the first reporting period subsequent to an acquisition whereby an entity that is a member of a unitary group acquires another entity, and for all reporting periods thereafter, a presumption of a unitary relationship exists. The presumption may be rebutted by proving that the entities are not unitary.

(f) Pre-existing relationship. The presumption against unity shall not apply if, immediately preceding the acquisition, the acquiring and acquired entities were engaged in a unitary business apart from being in the same commonly controlled group.

(g) Refusal to provide information. In all cases, the Chief Financial Officer’s determination of whether an entity is engaged in a unitary business is presumed to be correct if the taxpayer unreasonably refuses to provide information pertinent to the determination of a unitary business.

(h) Noncontrolling factors. Where evidence of a unitary business relationship exists as between two (2) or more entities such evidence is not negated by:

(1) The use of arms-length pricing for sales, exchanges, or transfers between entities; or

(2) The fact that a business uses a separate accounting system, including separate accounting division, by entity, by geographical area, by business function, or by business segment.

History

• SOURCE: Final Rulemaking published at 59 DCR 10875, 10879 (September 14, 2012).

9 DCMR § 159 COMBINED REPORTING: PASSIVE HOLDING COMPANIES

159.1 Passive holding companies. A passive holding company that is in a commonly controlled economic enterprise and holds intangible assets that are used by the enterprise in a unitary business shall be deemed to be engaged in the unitary business, even if the holding company’s activities are primarily passive.

159.2 A passive parent holding company that directly or indirectly controls one (1) or more operating company subsidiaries engaged in a unitary business shall be deemed to be engaged in a unitary business with the subsidiary or subsidiaries, even if the holding company’s activities are primarily passive.

History

• SOURCE: Final Rulemaking published at 59 DCR 10875, 10886 (September 14, 2012).

9 DCMR § 160 COMBINED REPORTING: STATUTE OF LIMITATIONS

160.1 Statute of limitations. If the statute of limitations applicable to refund claims and assessments is open with respect to a particular member of the combined group, the statute of limitations is open with respect to that particular taxpayer notwithstanding the fact that the statute of limitations may have expired for one or more other members of the combined group.

160.2 The statute of limitations applicable to refund claims and assessments for members of a combined reporting group which have filed their tax return based on a fiscalized reporting period matched to the accounting period of the designated agent shall be the statute of limitations determined and computed based on the fiscalized accounting period.

160.3 If a return is filed pursuant to a combined report, the Chief Financial Officer may examine and audit that return, and collect any deficiency from a combined group member for whom the statute of limitations for assessments has not expired, even if the statute of limitations for other members which filed pursuant to the same combined report has expired. Any deficiency assessed pursuant to the audit or examination will not cause a reopening of the statute of limitations for those other members for which the statute of limitations has expired who filed pursuant to the same combined report.

History

• SOURCE: Final Rulemaking published at 59 DCR 10875, 10886 (September 14, 2012).

9 DCMR § 161 COMBINED REPORTING: WATER’S-EDGE DETERMINATION

161.1 Water’s-edge determination. Absent an election to report based upon a worldwide unitary combined reporting basis, taxpayer members of a unitary group shall determine each of their apportioned shares of the net business income or loss of the combined group on a water’s-edge unitary combined reporting basis. In determining tax on a water’s-edge unitary combined reporting basis, members shall take into account all or a portion of the income and apportionment factors as required under D.C. Official Code § 47-1810.07 (2005 Repl.) as follows:

(a) One hundred percent (100%) included. All the income and apportionment factors must be included for the following members:

(1) Domestic corporations and entities.

(2) Any member, regardless of where it is incorporated or formed, if the average of its property, payroll, and sales factors within the United States is twenty percent (20%) or more;

(3) Domestic international sales corporations (DISC) described in I.R.C. §§ 991-994, foreign sales corporations (FSC) described in I.R.C. §§ 921-927, and export trade corporations (ETC) described in I.R.C. §§ 970-972; and

(4) Any member doing business in a tax haven, as defined in D.C. Official Code § 47-1801.04(49) (2005 Repl.).

(b) Partially included. The following members that are not described above are included only to the extent of any U.S. source income and factors:

(1) Any member shall include its business income that is effectively connected or treated as effectively connected with the conduct of a trade or business within the United States and, for that reason, is subject to federal income taxation;

(2) Controlled foreign corporation (CFC) defined in I.R.C. § 957, if they have Subpart F income defined in I.R.C. § 952.

(3) Any member that is a resident of a country that does not have a comprehensive income tax treaty with the United States and earns more than twenty percent (20%) of its income, directly or indirectly, from intangible property or service-related activities that are deductible against the business income of the other members of the water’s-edge group, to the extent of that income and the apportionment factors related thereto.

History

• SOURCE: Final Rulemaking published at 59 DCR 10875, 10886 (September 14, 2012).

9 DCMR § 162 COMBINED REPORTING: WORLDWIDE REPORTING AND INITIATION AND WITHDRAWAL OF ELECTION

162.1 Worldwide reporting. The member or members of the combined group engaged in a unitary business may elect to determine their apportioned share of the aggregate taxable net income or loss derived from the unitary business pursuant to a worldwide election under which each member shall take into account the income and apportionment factors of all the members, wherever located, includible in the combined group. If the members of a combined group do not make this election, each member shall determine its apportioned share of such income on a water’s-edge basis.

162.2 Mechanics for making the worldwide election. A worldwide election shall be made by the designated agent of the combined group. The election shall be made on an election form and shall be attached to an original, timely filed return. The election, to be valid, must indicate, in the manner that the Chief Financial Officer requires, that every entity that is a member of the combined group has agreed to be bound by such election. This election must include an agreement by each member of the group that such election shall apply to any member that subsequently enters the group and an agreement that each member continues to be bound by the election in the event that such member is subsequently the subject of a reverse acquisition described in Treas. Reg. § 1.1502-75(d)(3).

162.3 Effect of election in subsequent tax years. A worldwide election shall be binding for and applicable to the taxable year for which it is made and for the next nine taxable years. Any person entering the unitary combined group after the year of the election shall be deemed to have consented to the application of the election and to have waived any objection thereto. Reverse acquisition rules based on the federal rules set forth in Treas. Reg. § 1.1502-75(d)(3) shall be applied in determining whether a person is bound by a worldwide election in fact patterns described in such rules.

162.4 Change in reporting method. If either the water’s-edge or worldwide method was used to account for the combined group members’ income and apportionment data in the preceding tax year and the other method is to be used for the combined group’s combined report for the current tax year, adjustments to the income and apportionment data of the group members shall be made to prevent income and apportionment data from being omitted, or duplicated.

History

• SOURCE: Final Rulemaking published at 59 DCR 10875, 10887 (September 14, 2012).

9 DCMR § 163 COMBINED REPORTING: DETERMINATION OF TAXABLE INCOME OR LOSS USING COMBINED REPORT

163.1 The use of a combined report does not disregard the separate identities of the taxpayer members of the combined group. Each taxpayer member is responsible for tax based on its taxable income or loss apportioned or allocated to the District, which shall include, in addition to other types of income, the taxpayer member’s apportioned share of business income of the combined group, where business income of the combined group is calculated as a summation of the individual net business incomes of all members of the combined group. A member’s net business income is determined by removing all except business income, expense and loss from that member’s total income, as provided in D.C. Official Code §§ 47-1810.04 and 47-1810.05.

163.2 Example: General computation of the taxpayer member’s income.

Taxpayer’s federal taxable income (determined without regard to federal consolidated rules)

• or – District adjustments

– Taxpayer’s nonbusiness income

– Taxpayer’s business income from another unitary business (separately apportioned)

= Taxpayer’s unitary business income

• Other group members’ similarly calculated unitary business income

= Total unitary business income

x Taxpayer’s apportionment percentage (where each factor numerator is taxpayer’s in District factor, and each factor denominator is the sum of all group members’ factors)

= Taxpayer’s District unitary business income

• Taxpayer’s nonbusiness income allocated to the District

• Taxpayer’s business income from another unitary business (separately apportioned)

= Taxpayer’s District taxable income

x Tax rate

= Taxpayer’s gross District tax

– Taxpayer’s District tax credits

= Taxpayer’s District tax liability

See also 9 DCMR §170 for inclusion of unincorporated business and partnership income in the above calculation and 9 DCMR §171 for minimum tax due.

History

• SOURCE: Final Rulemaking published at 59 DCR 10875, 10888 (September 14, 2012).

9 DCMR § 164 COMBINED REPORTING: COMBINING SPECIAL APPORTIONMENT FORMULAS

164.1 Combined groups which include some members which are required to use the four (4)-factor apportionment formula and other members which are required to use a special apportionment method are subject to apportionment as described below:

(a) Combined group members who use the four (4)-factor formula and those that use special apportionment methods for purposes of allocation and apportionment shall prepare a federal consolidated pro forma return consisting of all combined group members, including the elimination of all intercompany transactions, regardless of whether between or among combined group members who use the four (4)-factor formula and/or those that use special apportionment formulas;

(b) Each member shall separately compute its District apportionment factor numerators, determine its District apportionment factor based on the group’s denominators, and then apply its factors to the group’s business income or loss subject to apportionment to arrive at net income or loss apportioned to the District;

(c) Each member shall compute its nonbusiness income separately subject to the allocation rules;

(d) All income or loss allocated and apportioned to the District by each member shall be added together to arrive at District taxable income for each member; and

(e) Each member shall apply the appropriate District income tax rate to determine the proper District tax due.

164.2 Example: Financial Institutions

DISCRIPTION

COMBINED REPORT

CORPORATION A

FINANCIAL INSTITUTION

Sales

District

$3,000,000

$2,000,000

$1,000,000

Sales

Everywhere

$20,000,000

$10,000,000

$10,000,000

District Weighted Sales Factor

20.00%

5.00%

Property

District

$20,000

$20,000

Property

Everywhere

$250,000

$250,000

8.00%

Payroll

District

$30,000

$20,000

$10,000

Payroll

Everywhere

$500,000

$250,000

$250,000

4.00%

2.00%

District Apportionment Factor

8.00%

3.50%

• The receipt factor for financial institutions is not double-weighted. See 9 DCMR § 129. The

sum of the factors (sales/receipts and payroll), excluding property, is divided by two.

History

• SOURCE: Final Rulemaking published at 59 DCR 10875, 10889 (September 14, 2012).

9 DCMR § 165 COMBINED REPORTING: NET OPERATING LOSSES

165.1 Post-apportioned net operating loss carryforwards. A combined group member may carry forward its District apportioned net operating loss to the extent the carryforward and offset is consistent with the requirements and limitations of D.C. Official Code § 47-1803.03(a)(14). A District apportioned net operating loss carryforward is an attribute of the separate entity rather than of the combined group. A combined group member may not share all or a portion of its net operating loss carryforward with other members of the combined group or as an offset against the total income of the combined group. A District apportioned net operating loss carryforwards shall be allowed to offset only the District taxable income of the combined group member that created the net operating loss.

165.2 Pre-combination net operating loss carryforwards. Each member of a combined group shall have its own net operating loss carryforward deduction (before apportionment) for loss years prior to 2000 and District apportioned net operating loss deduction (after apportionment) for loss years 2000 and thereafter where:

(a) Such member filed a separate District franchise tax return for tax years beginning before January 1, 2011; or

(b) Such member was included in a District consolidated return for tax years beginning before January 1, 2011, in which case, the net operating loss shall be determined on a separate entity basis by using the prorated amount of the consolidated net operating loss assigned to the District consolidated member if that member had a loss.

165.3 Example: Applying an NOL in a Combined Report.

YEAR 1:

Corp. X

Corp. Y

Corp. Z

Combined

Unitary business income (loss) subject to apportionment

(400,000)

(10,000)

60,000

(350,000)

Apportionment percentages

5%

1%

3%

9%

Loss apportioned to D.C. (combined loss x apportionment %)

(17,500)

(3,500)

(10,500)

(31,500)

Nonbusiness items wholly attributable to D.C.

50,000

(2,500)

0

D.C. net income (loss)

32,500

(6,000)

(10,500)

NOL available to be carried forward (100% of loss)

0

(6,000)

(10,500)

YEAR 2:

Corp. X

Corp. Y

Corp. Z

Combined

Unitary business income (loss) subject to apportionment

50,000

80,000

(5,000)

125,000

Apportionment percentages

6%

4%

4%

14%

Income apportioned to D.C. (Combined income x apportionment %)

7,500

5,000

5,000

17,500

Non-business items wholly attributable to D.C.

2,500

(10,000)

0

D.C. net income (loss)

10,000

(5,000)

5,000

Application of NOL carryforward from Year 1

0

0

(5,000)

D.C. net income (loss)

10,000

(5,000)

0

NOL available to be carried forward (100% of loss)

0

(5,000)

0

Corp. X

Corp. Y

Corp. Z

Remaining NOL from Year 1

0

(6,000)

(5,500)

Loss in Year 2

0

(5,000)

0

NOL available to be carried forward

0

(11,000)

(5,500)

History

• SOURCE: Final Rulemaking published at 59 DCR 10875, 10890 (September 14, 2012).

9 DCMR § 166 COMBINED REPORTING: TAX CREDITS

166.1 Current year tax credits. A tax credit generated by a member of a combined group is an attribute of the member rather than of the combined group, and credits are to be computed for each taxpayer separately. Therefore, a tax credit earned by a member of the combined group that is not fully used by or allowed to that member shall not be used in either whole or in part by any other member of the combined group or applied in whole or in part against the total income of the combined group.

166.2 Tax credit carryforward. A tax credit carryforward of a member of a combined group that was derived from a credit generated by the member either during a year in which the member was subject to combined reporting, or a prior year when the member was not subject to combined reporting, shall not be used in either whole or in part by any other member of the combined group or applied in whole or in part against the total income of the combined group.

History

• SOURCE: Final Rulemaking published at 59 DCR 10875, 10891 (September 14, 2012).

9 DCMR § 167 COMBINED REPORTING: TAXABLE YEAR; PART YEAR MEMBERS

167.1 Taxable year of the combined group. The combined group’s taxable year is determined as follows:

(a) If two (2) or more members of a group file a federal consolidated return, the group’s taxable year is the taxable year of the federal consolidated group; and

(b) In all other cases, the group’s taxable year shall be the taxable year of the designated agent.

167.2 52 to 53 week tax years. Where a member files federal income tax returns on the basis of an annual period which varies from fifty-two (52) to fifty-three (53) weeks, its taxable year shall be treated as beginning with the first day of the calendar month beginning nearest to the first day of such taxable year or ending with the last day of the calendar month ending nearest to the last day of such taxable year.

167.3 Members with different taxable years. If the taxable year of a combined group member differs from the taxable year of the combined group, the designated agent shall include that member's net income or loss and apportionment factors in the combined report by using the pro rata method; however the Chief Financial Officer may require use of the interim closing method in certain instances.

167.4 Pro rata method. Under the pro rata method, the income and apportionment data of the member as adjusted to reflect the determination of income under District law is assigned to the respective portion of the combined group's taxable year based on the ratio of months in common with the tax year of the combined group.

(a) The income and apportionment data from the member's recomputed taxable years is then combined with the income and apportionment data of the taxable year of the combined group, along with the income and apportionment data of other members of the combined group for the same period, similarly recomputed if necessary. The combined group's taxable income is then apportioned to each of the taxable members of the combined group.

(b) In the event that the pro rata method requires the determination of income and apportionment data of a member whose taxable year has not yet closed, and the information cannot be obtained in time for the other members to file an accurate return, the income and apportionment data for that period shall be estimated based on available information. If the use of actual income and apportionment data results in a material misstatement of income apportioned to the District by the combined group, the taxpayer members must file an amended return to reflect the change.

(c) Material misstatement. For the purpose of determining whether a re-determination of income made with respect to the pro rata method results in a material misstatement of income apportioned to the District by the combined group, it is presumed that there is such material misstatement where the aggregate tax liability of the combined group members that filed returns based on a pro rata estimate is found to have understated the aggregate correct liability for such members by the greater of ten thousand dollars ($10,000) or ten percent (10%) or, where the change in the apportioned group income for any one taxpayer member of the group increases or decreases by more than one hundred thousand dollars ($100,000).

167.5 The pro-rata method shall be used in each subsequent taxable year unless the interim closing method is required.

167.6 Part-year members. If, during a combined group's taxable year, a member ceases to be a member of the combined group or a new person becomes a member, the designated agent shall include that person's items attributable to the portion of the taxable year that the person was a member in the combined report covering the combined group's entire taxable year. For the portion of the taxable year when the person was not a member of the combined group, the person shall file a separate return or file in the combined report of another combined group, as applicable.

History

• SOURCE: Final Rulemaking published at 59 DCR 10875, 10892 (September 14, 2012).

9 DCMR § 168 COMBINED REPORTING: DESIGNATED AGENT, LIABILITY

168.1 Designated agent. In the event that there are two or more taxpayer members of a combined group, as a filing convenience, and without changing the respective liability of the group taxpayer members, the taxpayer members of a combined group shall designate one taxpayer member of the combined group to file a single return in the form and manner prescribed by the Chief Financial Officer, in lieu of filing their own respective returns. The designated agent shall be the taxpayer member of the combined group that is either the common parent, or, where there is no such common parent or the parent is not a taxpayer member of the combined group, the taxpayer member of the combined group that has the greatest District business activity during the first year that the combined report is required to be filed, as measured by the total of the District factors, payroll, sales, and property for that year.

168.2 Duties of designated agent. The designated agent agrees to act as the agent on behalf of the taxpayer members of the combined group for all tax matters relating to the combined group, including, but not limited to: making estimated tax payments; assessments; requesting extensions of time to file returns; amending returns; reporting Internal Revenue Service adjustments to returns; renewing or revoking an election such as the worldwide election; filing a refund claim; reporting federal changes; accepting of refunds or notices; executing waivers and powers of attorney; and providing access to tax and other relevant records of all members of the combined group as reasonably requested by the Chief Financial Officer.

168.3 Continuity of agency into future years. Once a taxpayer member of the combined group is appointed as the designated agent, it shall remain the designated agent of that group for all future tax years. If the designated agent leaves the combined group, is acquired by another combined group, or ceases to exist, a new designated agent will be determined under § 168.1.

168.4 Liability. The designated agent of a combined group consents to act as surety with respect to the tax liability of all other taxpayer members, including, but not limited to, any interest, additions to tax, and penalties. If for any reason the designated agent is unwilling or unable to perform its responsibilities, tax liability may be assessed against the taxpayer members.

History

• SOURCE: Final Rulemaking published at 59 DCR 10875, 10893 (September 14, 2012).

9 DCMR § 169 COMBINED REPORTING: APPORTIONMENT

169.1 The Joyce Rule. For apportionment purposes, the principle established in Appeal of Joyce, Inc. (Cal. SBOE 11/23/66) shall apply, in which each taxpayer member of the combined group is treated as a separate taxpayer and that taxpayer’s numerators will include only that taxpayer’s own property, payroll, and sales factor numerators attributable to the District and will not include a share of a non-nexus member’s factors. Each taxpayer member’s denominator shall contain the property, payroll, and sales of the entire combined group wherever those property, payroll, and sales are attributed regardless of nexus. The following example illustrates the Joyce method:

Entity Name

District Receipts

Everywhere Receipts

District

Nexus

Entity A

50

100

Yes

Entity B

100

200

Yes

Entity C

100

200

No

Factor Total

150

500

History

• SOURCE: Final Rulemaking published at 59 DCR 10875, 10894 (September 14, 2012).

9 DCMR § 170 COMBINED REPORTING: UNINCORPORATED BUSINESS ENTITIES / PARTNERSHIPS

170.1 General rule. Notwithstanding any other provision of chapter 18 of title 47 of the D.C. Official Code or the combined reporting regulations, if the combined group includes or any member owns an unincorporated business (UB) that would be subject to the tax imposed under D.C. Official § 47-1808.03 (2005 Repl.), the income or loss of such UB shall be apportioned to the District using the apportionment factor of the UB, and the combined group member-partner’s distributive share of such income, including separately stated items, shall be added to the combined group member-partner’s “other income.” A combined group member-partner’s distributive share of that income that was actually taxed under D.C. Official Code § 47-1808.03 (2005 Repl.) shall be subtracted from the combined group member-partner as “other deductions” to prevent double taxation. The distributive share of the combined group member-partner shall be added to the numerator and denominator of the combined group member-partner’s sales factor using the apportionment factor of the UB.

170.2 Distributive share. Distributive share of income means the income reported on the Federal Schedule K-1 (K-1). If applicable, the distributive share of the UB income shall then be adjusted pro-ratably according to the amount attributable to the District.

170.3 Untaxed income at the UB level. The income which is untaxed at the UB level under D.C. Official Code § 47-1808.03 (2005 Repl.), including, but not limited to, the reasonable allowance for salaries under D.C. Official Code § 47-1808.03(11) and (11)(b) (2005 Repl.), the exemption under D.C. Official Code § 47-1808.04 (2005 Repl.), or separately stated items such as guaranteed payments, shall be included in the combined group member-partner’s “other income” to the extent of the member-partner’s distributive share whether the UB is part of the combined group or not.

170.4 Presumption of nexus. If a partner takes a deduction for salary allowance or other distribution for services rendered to the UB or if a combined group member is the general partner or managing member, the partner or member shall be deemed to be actively engaged in the conduct of the business which shall create nexus in the District.

170.5 Nonbusiness income. If the income from the ownership interest in the partnership or UB is non-business income, then that income will be subject to allocation to the combined group member-partner.

170.6 A UB that is part of the combined group. If the combined group includes a UB (i.e. meets unitary requirements) that would be subject to the tax imposed under D.C. Official Code § 47-1808.03 (2005 Repl.), the UB shall report all its income and apportionment factors on the combined report only and the combined group member-partner shall include in its sales apportionment factor, the numerator which shall include the combined group member-partner’s distributive share of District income from the K-1 using the UB’s apportionment factor and the denominator which shall include the combined group member-partner’s total distributive share of that income from the K-1. The combined group member-partner shall not include its share of the UB’s payroll, property, or sales in its apportionment factors.

170.7 A UB that is not part of the combined group. If the combined group does not include a UB (i.e. does not meet unitary requirements) that would be subject to the tax imposed under D.C. Official Code § 47-1808.03 (2005 Repl.), the UB shall file its own stand-alone return using form D-30 (District unincorporated business franchise tax return) and be subject to the UB tax under D.C. Official Code § 47-1808.03 (2005 Repl.). However, the combined group member-partner shall include, in its sales apportionment factor, the numerator which shall include the combined group member-partner’s distributive share of District income from the K-1 using the UB’s apportionment factor and the denominator which shall include the combined group member-partner’s total distributive share of that income from the K-1. The combined group member-partner shall not include its share of the UB’s payroll, property, or sales in its apportionment factors.

170.8 Partnership that is not a UB. Provided that a combined group member who has an interest in a partnership, that is not a UB as defined by D.C. Official Code § 47-1808.01 (2005 Repl.) and would therefore not be subject to the UB tax imposed under D.C. Official Code § 47-1808.03 (2005 Repl.), the partnership shall file its own stand-alone return using form D-65 (District partnership return). However, the combined group member-partner shall include, in its sales apportionment factor, the numerator which shall include the combined group member-partner’s distributive share of the partnership’s District income from the K-1 and the denominator which shall include the combined group member-partner’s total distributive share of partnership income from the K-1 which shall be added to the combined group member-partner’s “other income.” There shall be no subtraction of the income because the income was not taxed at the partnership level.

170.9 Single Member Limited Liability Corporation (SMLLC). If a combined group member owns one hundred percent (100%) of a partnership or limited liability company (LLC), and the partnership or LLC is considered disregarded for federal income tax purposes, the combined group member-owner of the disregarded entity shall include in the combined group member-owner’s gross income and deductions of the disregarded entity on the combined report. The combined group member-owner shall include the payroll, property, and sales of the disregarded entity in both its numerator and denominator.

History

• SOURCE: Final Rulemaking published at 59 DCR 10875, 10895 (September 14, 2012).

9 DCMR § 171 COMBINED REPORTING: MINIMUM TAX PAYABLE

171.1 The minimum tax payable as provided under D.C. Official Code §§ 47-1807.02(b) and 47-1808.03(b) (2005 Repl.), as applicable, applies to each taxpayer member of the combined reporting group that is subject to tax under chapter 18 of title 47 of the District of Columbia Official Code and the minimum tax due of each taxpayer member shall be included in the combined report. If a combined group member’s gross District tax is less than the minimum tax due, the minimum tax shall be due.

History

• SOURCE: Final Rulemaking published at 59 DCR 10875, 10897 (September 14, 2012).

9 DCMR § 172 COMBINED REPORTING: ESTIMATED TAX PAYMENTS

172.1 Combined estimated tax payments. In general, only the designated agent of a combined group may make the estimated tax payments that must be made by the taxpayer members included in the combined report.

Exception: When separate estimated payments are allowed. Although the designated agent is always authorized to make estimated payments on behalf of any and all of the taxpayer members, a combined group taxpayer member other than the designated agent may make estimated payments on its own behalf if any of the following apply:

(a) For the first taxable year for which a combined group files a combined return, any taxpayer member of the group may make estimated payments on its own behalf; and

(b) For the first taxable year for which a person is a member of a combined group, that person may make estimated payments on its own behalf.

History

• SOURCE: Final Rulemaking published at 59 DCR 10875, 10897 (September 14, 2012).

9 DCMR § 173 COMBINED REPORTING: REAL ESTATE INVESTMENT TRUSTS

173.1 Dividends-paid deduction. Under D.C. Official Code § 47-1803.03(a)(13) (2005 Repl.), a real estate investment trust shall be allowed a deduction from gross income of dividends paid by a real estate investment trust which qualify for the dividends-paid deduction under § 857 of the Internal Revenue Code.

History

• SOURCE: Final Rulemaking published at 59 DCR 10875, 10897 (September 14, 2012).

9 DCMR § 174 COMBINED REPORTING: REGULATED INVESTMENT COMPANIES

174.1 Dividends-paid deduction. Under D.C. Official Code § 47-1803.03(a)(12) (2005 Repl.), a regulated investment company shall be allowed a deduction of dividends paid by a regulated investment company which qualify for the dividends-paid deduction under § 852 of the Internal Revenue Code.

History

• SOURCE: Final Rulemaking published at 59 DCR 10875, 10897 (September 14, 2012).

9 DCMR § 175 COMBINED REPORTING: FINANCIAL ACCOUNTING STANDARDS NO. 109 (FAS 109) DEDUCTION

175.1 Eligibility. If the enactment of combined reporting requirements for unitary businesses in the District results in an increase to a combined group's net deferred tax liability, the combined group is entitled to a FAS 109 deduction. “Net deferred tax liability” is defined as the net increase, if any, in deferred tax liabilities minus the net increase, if any, in deferred tax assets of the combined group, as computed in accordance with Generally Accepted Accounting Principles (GAAP) that would otherwise result from the imposition combined reporting in the District. Only companies that were publicly traded as of January 1, 2011 and that prepare their financial statements in accordance with GAAP qualify for the FAS 109 deduction. The term “publicly traded company” shall mean a company whose stock is publicly traded; a privately held company that issues publicly traded debt is not eligible for the FAS 109 deduction.

175.2 Timing of the deduction. The FAS 109 deduction shall be claimed annually over a seven (7)-year period beginning with the combined group’s taxable year that begins in 2015 equal to one-seventh (1/7) of the deduction amount.

175.3 Filing requirements. Any taxpayer intending to claim the FAS 109 deduction shall file a form with the group’s combined report with the Chief Financial Officer on or before the due date for the 2012 District franchise tax returns, specifying the total amount of the deduction which the taxpayer claims. This rule does not limit the authority to the Chief Financial Officer to review or redetermine the proper amount of any deduction claimed, whether on the form required or on a tax return for any taxable year.

175.4 Recordkeeping requirements. To facilitate review and potential audit of the taxpayer’s form and any claimed deduction, a taxpayer shall maintain records and workpapers necessary to support the calculation and journal entries identified for the full length of taxable years in which the deduction may be claimed, and all additional periods of time for which such taxable years may be subject to audit or adjustment.

History

• SOURCE: Final Rulemaking published at 59 DCR 10875, 10898 (September 14, 2012).

9 DCMR § 176 TIME AND PLACE FOR FILING TAX RETURNS; EXTENSIONS; CLOSING OUT SEPARATE ENTITIES

176.1 Extension for combined reporting filers. Effective for tax years beginning after December 31, 2010, a calendar or fiscal year taxpayer that is a member of a combined group and that must report income derived from the activities of that group in a combined report, shall receive an automatic 7-month extension. This extension applies to all final zero returns.

176.2 The request for an extension of time to file must be made on or before the due date of the return and shall not extend the date for payment of the tax due.

176.3 Closing out separate entities. If an entity filed a District return on a separate reporting basis or on a District consolidated basis for the tax year beginning prior to January 1, 2011, and that entity will now be filing on a combined reporting basis for the tax year beginning after December 31, 2010, that entity (or entities), except for the designated agent, shall file a separate final zero return along with the combined report.

History

• SOURCE: Final Rulemaking published at 59 DCR 10875, 10898 (September 14, 2012); as amended by Final Rulemaking published at 60 DCR 11234 (August 2, 2013).

9 DCMR § 177 RESERVED

History

• SOURCE: Final Rulemaking published at 59 DCR 10875, 10899 (September 14, 2012).

9 DCMR § 178 RESERVED

History

• SOURCE: Final Rulemaking published at 59 DCR 10875, 10899 (September 14, 2012).

9 DCMR § 179 RESERVED

History

• SOURCE: Final Rulemaking published at 59 DCR 10875, 10899 (September 14, 2012).

9 DCMR § 180 RESERVED

History

• SOURCE: Final Rulemaking published at 59 DCR 10875, 10899 (September 14, 2012).

9 DCMR § 181 RESERVED

History

• SOURCE: Final Rulemaking published at 59 DCR 10875, 10899 (September 14, 2012).

9 DCMR § 182 RESERVED

History

• SOURCE: Final Rulemaking published at 59 DCR 10875, 10899 (September 14, 2012).

9 DCMR § 183 RESERVED

History

• SOURCE: Final Rulemaking published at 59 DCR 10875, 10899 (September 14, 2012).

9 DCMR § 184 RESERVED

History

• SOURCE: Final Rulemaking published at 59 DCR 10875, 10899 (September 14, 2012).

9 DCMR § 185 RESERVED

History

• SOURCE: Final Rulemaking published at 59 DCR 10875, 10899 (September 14, 2012).

9-2 INHERITANCE AND ESTATE TAXES

9 DCMR § 200 GENERAL PROVISIONS

200.1 The provisions of this chapter are adopted under authority of the District of Columbia Revenue Act of 1937, as amended, D.C. Code § 47-1923.

200.2 References in this chapter to sections and articles of the "Act" are to the sections and articles of Title 5 of the District of Columbia Revenue Act of 1937, as amended, D.C. Code § 47-1901 et seq.

200.3 Words defined in § 13 of Article 3 of the Act shall have the same meaning when used in this chapter.

200.4 The Deputy Chief Financial Officer of the Office of Tax and Revenue is constituted the representative of the Mayor for the supervision and enforcement of Title 5 of the Act and this chapter.

200.5 The term "Deputy Chief Financial Officer" means the Deputy Chief Financial Officer of the Office of Tax and Revenue ("Office"), or his or her designee, agent, or representative.

History

• AUTHORITY: Unless otherwise noted, the authority for this chapter is the District of Columbia Revenue Act of 1937, approved August 17, 1937, and the District of Columbia Revenue Act of 1939, approved July 26, 1939, D.C. Code § 47-1901 (1981 Ed.).
• SOURCE: Commissioners' Order 299-637/12, effective June 14, 1944, 16 DCRR §§ 400 and 401.
• EDITOR'S NOTE: The Office of the Chief Financial Officer of the District of Columbia published a Notice of Public Interest at 44 DCR 2345 (April 18, 1997) changing the name of the "Department of Finance and Revenue" to the "Office of Tax and Revenue."

9 DCMR § 201 TAXABLE SITUS

201.1 The taxable situs of real estate is the place where the real estate is situated.

201.2 The taxable situs of tangible personal property is the place where the property is physically located at the time of the decedent's death, except as otherwise provided in this section.

201.3 The taxable situs of tangible personal property which, by its nature, is readily movable shall be determined by the Deputy Chief Financial Officer from the facts of each case.

201.4 If readily movable property belonging to a decedent domiciled within the District is accidentally or casually outside of the District at the time of the decedent's death, the taxable situs of that property shall be the District.

201.5 The taxable situs of intangible personal property belonging to a non-alien decedent is the place where the decedent was domiciled at the time of death, except as otherwise provided by this section.

201.6 If the non-alien decedent during his or her lifetime caused intangible personal property to become an integral part of a business, trade, profession, or vocation carried on by the owner and localized in the District, that property acquires a "business situs" in the District and has a taxable situs in the District.

201.7 Whether the intangible personal property of a non-alien decedent has acquired a "business situs" in the District shall be determined by the Deputy Chief Financial Officer. In making a determination, the Deputy Chief Financial Officer may consider evidence such as affidavits, bank records, court records, agreements, and any other evidence which appears material.

201.8 Generally, all property of an alien decedent situated within the District at the time of the decedent's death has a taxable situs in the District, regardless of the domicile of the alien at the time of the alien's death.

201.9 No tax is imposed upon any transfer of securities specifically exempted under the provisions of § 15 of Article 3 of the Act, even though the securities were issued by or are obligations of a corporation organized under the laws of the District.

History

• SOURCE: Commissioners' Order 299-637/12, effective June 14, 1944, 16 DCRR § 402.

9 DCMR § 202 VALUATION

202.1 The taxable value of any estate for years shall be determined by multiplying five percent (5%) of the market value of the property from which the estate accrues by the figure shown in the table in § 202.3 opposite the number of years for which the estate is fixed.

202.2 The taxable value of a fixed annuity shall be determined by multiplying the aggregate fixed sum or sums to be received each year by the figure shown in the table in § 202.3 opposite the fixed number of years during which the annuity is to run.

202.3 FIXED ANNUITY TABLE (5%): Present worth of an annuity of one dollar ($ 1) payable at the end of each year for a certain number of years:

Years

Years

Years

Years

1

$ 0.9524

21

$ 12.8212

41

$ 17.2944

61

$ 18.9803

2

1.8594

22

13.1630

42

17.4232

62

19.0288

3

2.7232

23

13.4886

43

17.5459

63

19.0751

4

3.5460

24

13.7986

44

17.6628

64

19.1191

5

4.3295

25

14.0939

45

17.7741

65

19.1611

6

5.0757

26

14.3752

46

17.8801

66

19.2010

7

5.7864

27

14.6430

47

17.9810

67

19.2391

8

6.4632

28

14.8981

48

18.0772

68

19.2753

9

7.1078

29

15.1411

49

18.1687

69

19.3098

10

7.7217

30

15.3725

50

18.2559

70

19.3427

11

8.3064

31

15.5928

51

18.3390

71

19.3740

12

8.8633

32

15.8027

52

18.4181

72

19.4038

13

9.3936

33

16.0025

53

18.4934

73

19.4322

14

9.8986

34

16.1929

54

18.5651

74

19.4592

15

10.3797

35

16.3742

55

18.6335

75

19.4850

16

10.8378

36

16.5469

56

18.6985

76

19.5095

17

11.2741

37

16.7113

57

18.7605

77

19.5329

18

11.6896

38

16.7113

58

18.8195

78

19.5551

19

12.0853

39

17.0170

59

18.8758

79

19.5863

20

12.4622

40

17.1591

60

18.9293

80

19.5965

202.4 The taxable value of life interest in any property shall be determined by multiplying five percent (5%) of the market value of the property (as of date of death of decedent) from which the life interest is to accrue, by the figure shown opposite the age of the beneficiary in the American Experience Table of Mortality in § 202.6.

202.5 The taxable value of an annuity for life shall be multiplied by the appropriate figure in the same table, instead of five percent (5%) of the value of the property from which the annuity accrues. If payments under an annuity are to be made more often than once each year, the aggregate of those payments per year shall be considered the annuity payment for purposes of determining the taxable value.

202.6 ANNUITY VALUATION TABLE BASED ON AMERICAN EXPERIENCE TABLE OF MORTALITY (WITH INTEREST AT 5%): Annuity or present value of one dollar ($ 1) due at the end of each year during the life of a person of specified age:

Age

Age

Age

0

$ 12.818

32

$ 14.85666

64

$ 7.75900

1

14.922

33

14.73492

65

7.45885

2

15.731

34

14.60774

66

7.15921

3

16.125

35

14.47479

67

6.86074

4

16.346

36

14.33572

68

6.56420

5

16.472

37

14.19057

69

6.27048

6

16.535

38

14.03897

70

5.98022

7

16.561

39

13.88092

71

5.69422

8

16.560

40

13.71604

72

5.41286

9

16.540

41

13.54430

73

5.13592

10

16.50475

42

13.36528

74

4.86279

11

16.46076

43

13.17891

75

4.59264

12

16.41469

44

12.98494

76

4.32477

13

16.36642

45

12.78344

77

4.05856

14

16.31581

46

12.57414

78

3.79392

15

16.26274

47

12.35728

79

3.53109

16

16.20722

48

12.13275

80

3.27017

17

16.14986

49

11.90076

81

3.01349

18

16.08779

50

11.66175

82

2.76062

19

16.02372

51

11.41594

83

2.51052

20

15.95658

52

11.16361

84

2.26066

21

15.88620

53

10.90499

85

2.00986

22

15.81257

54

10.64036

86

1.76061

23

15.73552

55

10.37017

87

1.51750

24

15.65484

56

10.09472

88

1.28611

25

15.57033

57

9.81450

89

1.06704

26

15.48176

58

9.52988

90

0.85453

27

15.38910

59

9.24127

91

0.64497

28

15.29210

60

8.94928

92

0.44851

29

15.19051

61

8.65445

93

0.28761

30

15.08425

62

8.35742

94

0.13605

31

14.97307

63

8.05876

202.7 The age of the beneficiary to be used is the age on the birthday of the beneficiary nearest the date of the death of the decedent.

202.8 In determining the value of any estate for life limited upon a precedent estate for life or a term of years, the value of the precedent life interest or a term of years shall be deducted, except where the time for payment of the tax is postponed under the provisions of § 7 of Article 1 of the Act.

202.9 Where an estate for life, or for years, can be divested by the act or omission of any legatee or devisee, it shall be taxed as if there were no possibility of such divesting.

202.10 In determining the value of the share or interest of a beneficiary in any estate where the beneficiary is presently in possession or enjoyment of the share or interest, no allowance shall be made on account of any contingent encumbrance nor for any contingency upon the happening of which the estate of property or some part of it or interest in it might be abridged, defeated, or diminished.

202.11 Income accrued but not collected at the time of the death of the decedent is subject to the tax and is to be included in the valuation of the property.

History

• SOURCE: Commissioners' Order 299-637/12, effective June 14, 1944, 16 DCRR §§ 403.1 through 403.3, 403.5 through 403.7.

9 DCMR § 203 TAXABILITY OF FUTURE INTERESTS

203.1 If the donee for life or years has the right, in his or her sole discretion, to expend or consume the corpus, or a part of the corpus, for the donee's own use, the taxable value of the interest of the donee for life or years in that corpus, or that part of the corpus, shall be the value of the entire corpus or of that part of the corpus as may be so expended or consumed without reference to the method of determining the value of the life interest or of an estate for years as provided in § 202, except insofar as the market value of that part of the corpus as may be expended or consumed may be computed with reference to a fixed and definite standard, stated in the instrument creating the corpus, for the expenditure or consumption.

203.2 If the corpus may be expended or consumed in whole or in part by any person or persons for the benefit of, or on behalf of, a donee for life or years (whether or not the donee for life or years shall personally have the right of invasion or use), the taxable value of the interest of the donee for life or years in that corpus shall be the value of the entire corpus (or of that part of the corpus as may be so expended or consumed) without reference to the method of determining the value of a life interest or of an estate for years as provided in § 202, except insofar as the market value of that part of the corpus as may be expended or consumed may be computed with reference to a fixed and definite standard, stated in the instrument creating the corpus, for the expenditure or consumption.

203.3 To the extent which the corpus may be expended or consumed as set forth in this section, the future interest in the corpus shall be presumed to have no market value, unless, concurrently with the filing of the tax returns required to be filed for assessment purposes (for tax upon the interest of the donee for life or years and upon the future interest in the corpus), there is filed with the Deputy Chief Financial Officer tangible evidence relating to the age, life expectancy, state of health, accustomed scale of living, economic circumstances, and other sources of income of the donee for life or years.

203.4 The Deputy Chief Financial Officer may, in his or her discretion, require additional evidence prior to assessment for the purpose of determining the market value referred to in this section.

History

• SOURCE: Commissioners' Order 299-637/12, effective June 14, 1944, 16 DCRR § 403.4; as amended by Commissioners' Order 55-68, 1 DCR 200 (January 31, 1955); by Commissioners' Order 56-683, effective April 5, 1956, 2 DCR 263 (April 23, 1956).

9 DCMR § 204 INSURANCE AND ANNUITIES

204.1 Transfers of the proceeds of insurance on the life of the decedent and of annuity contract benefits are taxable under Article 1 of the Act in the following circumstances:

(a) If the proceeds are payable, directly or indirectly, to the estate;

(b) If the proceeds are taken out to provide for the payment of taxes (including estate and inheritance taxes) or other charges against the estate, or to be used for the benefit of the estate of the insured; or

(c) If the proceeds are made payable to a named beneficiary who has pre-deceased the insured.

204.2 Transfers of the annuity contract benefits are taxable under Article 1 of the Act if the annuity policies or contracts are ones upon which the decedent received benefits during his or her lifetime and upon which the full value did not terminate with his or her death.

204.3 Transfers of the proceeds of policies written by the United States government to which any of the circumstances set forth in this section applies are taxable under Article 1 of the Act.

History

• SOURCE: Commissioners' Order 299-637/12, effective June 14, 1944, 16 DCRR § 404.

9 DCMR § 205 DEDUCTIONS FROM VALUATION OF GROSS ESTATE

205.1 Amounts actually expended for funeral expenses may be allowed as deductions, but the deduction shall not exceed one thousand dollars ($ 1,000) unless any expenditure in excess of one thousand dollars ($ 1,000) is directed in the will of the decedent.

205.2 No deductions shall be allowed for a monument or memorial unless the expenditure for a monument or memorial is directed in the will of the decedent.

205.3 The amounts deductible from the gross estate as administration expenses are those expenses that are actually and necessarily incurred in the administration of the estate; that is, in the collection of assets, payment of debts, and distribution among the persons entitled.

205.4 Expenditures not essential to the proper settlement of the estate, but incurred for the individual benefit of the heirs, legatees, or devisees, may not be taken as deductions.

205.5 Administration expenses include executor's or administrator's commissions and attorney's fees. Commissions and attorney's fees may be allowed if approved by the Probate Court or at the discretion of the Deputy Chief Financial Officer.

205.6 The allowable deduction for District real estate taxes for the fiscal year in which the decedent died is the pro rata portion of the total yearly tax based on the number of days the decedent lived during that fiscal year compared to three hundred sixty-five (365), less any real estate tax paid prior to death.

205.7 Taxes unpaid at time of decedent's death upon income received during the decedent's lifetime are deductible, including interest accrued on the income at time of death. Taxes upon income received after death are not deductible.

205.8 No deduction shall be allowed for hospital expenses, doctors and nurses bills, and any other expenses incurred, if those expenses were paid by decedent prior to his or her death.

205.9 Funeral, administration, and other expenses and debts of the decedent are not proper deductions from the value of jointly held real estate or personal property passing by right of survivorship or from any other property received by a beneficiary (such as a U.S. Civil Service Retirement Fund) which may not be attached for debts of the decedent. Exceptions to this rule are encumbrances on District real estate and taxes on District real estate computed to the date of decedent's death, and liens on personal property having a taxable situs in the District.

205.10 There shall be allowed as a deduction from the gross estate that proportionate part of the total federal estate tax determined by the use of the following fraction:

(a) The NUMERATOR shall be the total net value of all transfers of property or portions of property which are subject to District inheritance tax; Provided, that the net value of any transfer so included shall not exceed the net amount at which that transfer is valued for federal estate tax purposes; and

(b) The DENOMINATOR shall be the total net value of the estate subject to federal estate tax, including the value of insurance benefits subject to the federal estate tax.

205.11 If the estate of a resident or non-resident decedent is comprised in part of property which has no taxable situs in the District for inheritance tax purposes, there shall be allowed as a deduction only that portion of the debts of the decedent for which the property having a taxable situs in the District is properly chargeable either through direct allocation or apportionment.

History

• SOURCE: Commissioners' Order 299-637/12, effective June 14, 1944, 16 DCRR § 405.

9 DCMR § 206 SUSPENSION OF VALUATION AND IMPOSITION OF TAX

206.1 Under the following circumstances, final valuation of an estate and final imposition of tax shall be suspended until such time as, in the opinion of the Deputy Chief Financial Officer, sufficient facts are available for proper determination of the tax:

(a) If part of the decedents estate consists of an interest in an estate which has not been settled;

(b) If the right to take under a will is in litigation;

(c) If the determination of tax based on the return of the beneficiary is contingent upon certain information to be disclosed in the return of the personal representative;

(d) If the value of the decedent's interest in a partnership cannot be determined at the time of death; or

(e) If the determination of the existence, nature, or value of the property or interest subject to tax depends upon the outcome of litigation; the happening of an event which has not occurred; or the determination of a fact undetermined at the time of decedent's death.

206.2 If, in the opinion of the Deputy Chief Financial Officer, circumstances other than those listed in § 206.1 are such that the tax should be suspended, the Deputy Chief Financial Officer shall authorize suspension; Provided, that in all cases, the imposition of the tax shall be suspended only with respect to that portion of the property which in the opinion of the Deputy Chief Financial Officer cannot be properly assessed.

206.3 If the nature of the property or the interest subject to the tax cannot be more certainly ascertained by postponing the valuation, the imposition of the tax shall not be postponed.

History

• SOURCE: Commissioners' Order 299-637/12, effective June 14, 1944, 16 DCRR § 406.

9 DCMR § 207 CONTESTED WILLS AND RENUNCIATIONS

207.1 If a will is contested and the contest is compromised by an agreement under which the will is permitted to take effect, the tax is nevertheless imposed as though distribution had been made in accordance with the provisions of the will. In other words, where the will is permitted to stand, the tax is paid as if the compromise had not been made.

207.2 If a will is contested and the contest is settled by an agreement under which the will is withdrawn and the law of distribution and descent is allowed to operate, the tax is imposed upon those who take under the law of distribution and descent and not on those to whom a compromise payment is made for permitting the withdrawal of the will.

207.3 If a will is construed by the court, the tax shall be imposed upon those persons who are entitled to take by decision of the court and upon the shares which they are entitled to receive by reason of the court decision.

207.4 If a person renounces the share to which he or she is entitled under a will, and if the renunciation is properly filed with the court, and if the person renouncing receives no valuable consideration for the renunciation, the tax shall be imposed upon the person or persons in favor of whom he or she has renounced.

History

• SOURCE: Commissioners' Order 299-637/12, effective June 14, 1944, 16 DCRR § 407.

9 DCMR § 208 CREDITS AGAINST ESTATE TAXES

208.1 There shall be credited against and applied in reduction of the tax imposed by § 1 and § 5 of Article 2 of the Act, the amount of any inheritance tax imposed by the District.

208.2 Before any credit may be allowed against the tax imposed by § 1 and § 5 of Article 2 of the Act for estate, inheritance, legacy, or succession taxes lawfully imposed by any state or territory of the United States, the following shall be submitted to the Deputy Chief Financial Officer:

(a) A certificate of the proper officer of the taxing state or territory, showing the following:

(1) The total amount of tax imposed (before entering interest and penalties, and before allowing discount);

(2) The amount of discount allowed;

(3) The amount of penalties and interest imposed or charged;

(4) The total amount actually paid in cash; and

(5) The date of payment.

(b) A certificate of the proper officer of the taxing state or territory indicating the following:

(1) Whether a claim for refund of all or part of the taxes is pending; and

(2) Whether a refund of all or part of the taxes has been authorized.

208.3 If a refund has been made, the date the refund was made, the amount of the refund, and a description of the property or interest with respect to which the refund was made must be shown in the certificate filed under § 208.2(b).

208.4 The evidence described in §§ 208.2 and 208.3 should be filed with the copy of the return; Provided, that if the filing is not convenient or possible, it should be submitted to the Deputy Chief Financial Officer promptly after the filing of the copy of the return.

208.5 The Deputy Chief Financial Officer may require the submission of additional proof deemed necessary to establish the right to the credit or the final determination of the amount of the State or territorial taxes.

208.6 If, subsequent to the allowance of the credit by the Deputy Chief Financial Officer, a refund is made of any estate, inheritance, legacy, or succession taxes paid to a State or territory; the executor or administrator, as the case may be (or, if the refund is made after the executor's or administrator's discharge, then any person or persons to whom the refund is made) shall advise the Deputy Chief Financial Officer of the date of the refund and the amount of the refund, and shall furnish the Deputy Chief Financial Officer with a description of the property or interest with respect to which the refund is made, and pay the tax due as the result of the refund, together with interest on the amount of tax due.

History

• SOURCE: Commissioners' Order 299-637/12, effective June 14, 1944, 16 DCRR § 408.

9 DCMR § 209 COMPUTING NON-RESIDENT ESTATE TAXES: AN EXAMPLE

209.1 The following is an example of the method to be used in computing taxes imposed by § 5 of Article 2 of the Act: Assume that a decedent who was not domiciled at the time of his death in the District left the following estate:

Real estate and tangible personal property situated in the District

$ 50,000.00;

Assets in the State in which decedent was domiciled

250,000.00

Total estate

$ 300,000.00

The federal estate tax, under the 1926 Federal Revenue Act

4,500.00

The maximum credit of 80% of this tax against which the estate may apply inheritance, estate, and succession taxes

3,600.00

Assume that the estate paid inheritance taxes of $ 300 to the District and inheritance taxes of $ 500 in another jurisdiction

800.00

Balance of 80% credit ($ 3,600 • $ 800)

2,800.00

One-sixth (ratio of real estate and tangible personal property in the District of the total estate) of $ 2,800 is the estate tax assessable by the District

466.67

History

• SOURCE: Commissioners' Order 299-637/12, effective June 14, 1944, 16 DCRR § 409.

9 DCMR § 210 JOINTLY HELD SAFE DEPOSIT BOXES

210.1 After the death of one of the joint holders of a safe deposit box in any bank, trust company, or under the custody or control of any person, the safe deposit box shall not be opened by any person other than the executor, administrator, or collector of the estate of the decedent appointed by the U.S. District Court (D.C.) without giving the Deputy Chief Financial Officer at least ten (10) days prior notice of the date, time, and place of the contemplated or intended opening.

210.2 The safe deposit box shall not be opened prior to the time specified in the notice (except by the executor, administrator, or collector), unless the safe deposit box is opened before the time in the notice in the presence of the Deputy Chief Financial Officer (or the Deputy Chief Financial Officer's representative) under an arrangement with the Deputy Chief Financial Officer for that purpose.

210.3 If the Deputy Chief Financial Officer is present at the time and place specified in the notice, and the safe deposit box, for any reason, cannot be opened, that safe deposit box shall not be opened without a new ten (10) day notice as provided in § 210.1.

210.4 After examination of the entire contents of the safe deposit box by the Deputy Chief Financial Officer, the Deputy Chief Financial Officer shall issue a written order authorizing the bank or other lessor of the box to deliver the entire contents of the box to the survivor without any liability on the part of the lessor for the payment of the tax imposed on account of the transfer of the contents of the box.

210.5 If the Deputy Chief Financial Officer is not present at the time and place specified in the notice, the safe deposit box may be opened, in which event, the lessor of the safe deposit box shall be liable for the payment of any taxes assessed on account of the transfer of the contents of the box, and the lessor shall accurately list and describe the contents of the safe deposit box on the statement to the Deputy Chief Financial Officer.

210.6 All property in any such safe deposit box shall be presumed to be the property of the decedent where ownership is not established to the satisfaction of the Deputy Chief Financial Officer.

History

• SOURCE: Commissioners' Order 299-637/12, effective June 14, 1944, 16 DCRR § 410.

9 DCMR § 211 REPORTS OF JOINTLY HELD PROPERTY

211.1 Any bank or trust company, dealer in securities, real estate broker, storage company, or other person holding a joint deposit or account of the value of three hundred dollars ($ 300) or more in the name of a decedent and another person or persons, shall notify the Deputy Chief Financial Officer in writing of that fact immediately on learning of the decedent's death.

211.2 The notice shall contain the names and addresses of the decedent and each of the survivors to whom the joint deposits, accounts, or assets comprising those joint deposits or accounts shall have passed by right of survivorship, together with the date of death of the decedent, the value and character of the joint deposit, joint account, and assets as of the date of death of the decedent.

211.3 Similar notice to the Deputy Chief Financial Officer shall also be given by any insurance company or other person which has issued to a resident decedent an annuity policy or annuity contract which was in effect at the time of the death of the decedent and under the terms of which payments are to continue to a survivor or survivors.

History

• SOURCE: Commissioners' Order 299-637/12, effective June 14, 1944, 16 DCRR § 411.

9 DCMR § 212 RELEASE OF PROPERTY FROM LIEN OF TAXES

212.1 When the Deputy Chief Financial Officer is satisfied that the tax liability of any estate has been fully discharged or provided for, the Deputy Chief Financial Officer may issue a certificate releasing any and all property of the estate from the lien imposed under the Act.

212.2 The form of the release shall be determined by the Deputy Chief Financial Officer.

212.3 The words "provided for" in § 212.1 mean the filing of a bond with the Deputy Chief Financial Officer in a sum equal to the entire amount of the tax found to be due or equal to the value of the property requested to be released, or the submission of evidence which convinces the Deputy Chief Financial Officer that the collection of the tax will not be jeopardized by granting the release requested.

212.4 The Deputy Chief Financial Officer shall furnish a release only upon request.

History

• SOURCE: Commissioners' Order 299-637/12, effective June 14, 1944, 16 DCRR § 412.

9 DCMR § 213 EXTENSION OF TIME TO FILE RETURN

213.1 The time within which any person is required to file a return as provided in this chapter, the time for the payment of tax as provided in this chapter, and the time for the performance of any other duty imposed by the Act may be extended by the Deputy Chief Financial Officer for any reason which the Deputy Chief Financial Officer deems satisfactory.

213.2 Each application for extension of time must be in writing and must clearly state the reasons for the request.

213.3 An application may be considered by the Deputy Chief Financial Officer even though it is received after the time has expired for the filing of the return, the payment of the tax, or the performance of any other duty.

History

• SOURCE: Commissioners' Order 299-637/12, effective June 14, 1944, 16 DCRR § 413.

9-3 REAL PROPERTY TAXES

9 DCMR § 300 GENERAL PROVISIONS

300.1 The provisions of this chapter are adopted under authority of the "District of Columbia Real Property Tax Revision Act of 1974," 88 Stat. 1053, as amended, D.C. Code § 47-814 and § 47-820 (1981 Ed.).

300.2 The purpose of this chapter is to establish rules for the assessment and reassessment of real property and related matters consistent with the provisions of the "District of Columbia Real Property Tax Revision Act of 1974" (also referred to in this chapter as the "Act"), as amended, and other applicable provisions of law.

300.3 For the purposes of this chapter, the word "Mayor," means the Mayor of the District of Columbia or his or her authorized representative.

300.4 For the purposes of this chapter, the term "Deputy Chief Financial Officer" means the Deputy Chief Financial Officer of the Office of Tax and Revenue ("Office") or his or her designee, agent, or representative.

300.5 For the purposes of this chapter, the word "erected" means completely built and finished.

300.6 For the purposes of this chapter, the word "roofed" and the phrase "under roof" mean the stage of completion of a structure where the main roof and the roofs of any structures on the main roof are in place.

History

• AUTHORITY: Unless otherwise noted, the authority for this chapter is the District of Columbia Real Property Tax Revision Act of 1974, 88 Stat. 1053, as amended, D.C. Code §§ 47-814 and 47-820 (1981 Ed.).
• SOURCE: Regulation No. 74-35 effective December 12, 1974, 21 DCR 1643 (January 20, 1975), 16 DCRR §§ 100, 101.
• EDITOR'S NOTE: The Office of the Chief Financial Officer of the District of Columbia published a Notice of Public Interest at 44 DCR 2345 (April 18, 1997) changing the name of the "Department of Finance and Revenue" to the "Office of Tax and Revenue."

9 DCMR § 301 SUBMISSION OF PROPOSED REAL PROPERTY TAX RATES

301.1 On or before July 15th of each year the Mayor shall submit to the Council of the District of Columbia (Council), in accordance with the provisions of the Act, a proposed real property tax rate for the tax year; Provided, that the Mayor may extend for up to thirty (30) days the period for submitting the tax rate.

301.2 At the time the Mayor submits to the Council the proposed tax rate under § 301.1, the Mayor shall also submit, in addition to other information required by the Act, the real property tax rate (rounded to the nearest penny) calculated to yield in the tax year the same amount of revenue (exclusive of the revenue attributable to new construction) as was raised by the tax at the rate applicable during the year preceding the tax year.

301.3 When the rounding of the tax rate in accordance with § 301.2 does not yield the same amount of revenue as was obtained from the previous year's levy, the tax rate shall be increased to the nearest penny which will yield at least the same amount of revenue.

History

• SOURCE: Regulation No. 74-35 effective December 12, 1974, 21 DCR 1643 (January 20, 1975), 16 DCRR § 102(a).

9 DCMR § 302 ESTABLISHMENT OF REAL PROPERTY TAX RATES

302.1 The Council, after public hearing, shall establish each year a tax rate within thirty (30) days after receipt of the proposed rate submitted by the Mayor.

302.2 The Council may, by resolution, extend the time for setting the rate of taxation, except that if the Council does adopt an extension, it must establish the tax rate for the tax year.

302.3 In establishing the rate each year, the Council shall consider the tax burden studies made pursuant to § 303 and any other comparisons it deems advisable to make.

History

• SOURCE: Regulation No. 74-35 effective December 12, 1974, 21 DCR 1643 (January 20, 1975), 16 DCRR §§102(b), 102(c).

9 DCMR § 303 TAX RATE AND BURDEN STUDIES

303.1 On or before June 30th of each year, the Mayor shall compile and publish studies based on the best information available regarding the relative amount of tax burden for all major taxes compared with those in surrounding jurisdictions in the Washington Metropolitan Area and other cities of comparable size.

303.2 For the purpose of this chapter, the terms "vicinity of the District" and "Washington Metropolitan Area" mean Prince Georges and Montgomery Counties in the State of Maryland; Arlington and Fairfax Counties in the Commonwealth of Virginia; and the cities of Alexandria and Fairfax in the Commonwealth of Virginia.

303.3 For the purposes of this chapter, the term "cities of comparable size" means at least the thirty (30) largest cities in the United States as listed in the United States Bureau of the Census population studies.

303.4 Major taxes for purposes of tax burden studies of individuals shall include, but not necessarily be limited to, individual income taxes, real property taxes, sales taxes, and motor vehicle taxes.

303.5 The tax impact study on businesses shall be an annual study which shall present business tax rate comparisons. Major taxes for purposes of comparing tax rates on businesses shall include, but not necessarily be limited to, real property taxes, business income taxes, personal property taxes, and major excise taxes.

303.6 For purposes of § 413 of the Act, with respect to exempt property, major classes of property shall mean, at least the following classes:

(a) Properties owned by the United States government;

(b) Properties owned by the District government; and

(c) All exempt properties other than properties owned by the United States government or the District of Columbia government.

303.7 For purposes of § 413 of the Act, with respect to taxable properties, major classes of property shall mean at least the following classes:

(a) Residential real property; and

(b) Commercial real property.

303.8 Residential property shall include the following:

(a) Vacant land zoned for residential use;

(b) Residential garages; and

(c) All improved property used primarily for residential dwelling purposes, including detached dwellings, semi-detached dwellings, row dwellings, flats, residential condominiums, cooperatives, and apartments.

303.9 Commercial property shall include all taxable real property other than residential property.

History

• SOURCE: Regulation No. 74-35 effective December 12, 1974, 21 DCR 1643 (January 20, 1975), 16 DCRR §§101, 102(c).

9 DCMR § 304 ASSESSMENT AREAS AND ASSESSMENT STUDIES

304.1 The Mayor shall annually prepare an assessment-sales ratio study for major classes of property for the entire District and for major classes of property within each assessment area for which sufficient data is available, as determined by the Mayor. Results of the study shall be published in the D.C. Register and made available to the news media.

304.2 The Mayor may designate geographic assessment areas for purposes of analyzing market values. An "assessment area" is a geographic area within the District which has been designated by the Mayor as an area for assessment purposes.

304.3 The boundaries of the assessment areas may be changed as necessary in order to reflect changing economic or other conditions which have a bearing on the market value of properties.

304.4 For the purpose of analyzing market values, the Mayor may, if he or she deems it desirable, analyze values by types of property (for example, all motels or all hotels) rather than only those types of properties located in a geographical area.

304.5 Descriptions of the boundaries of assessment areas or maps showing these boundaries shall be made available to the public during normal business hours.

History

• SOURCE: Regulation No. 74-35 effective December 12, 1974, 21 DCR 1643 (January 20, 1975), 16 DCRR §§101, 103, and 107.

9 DCMR § 305 ASSESSMENTS

305.1 All real property shall be assessed on an annual basis.

305.2 For the purposes of this chapter, the term "real property" means real estate identified by plat on the records of the District of Columbia Surveyor according to lot and square, together with improvements on that real estate.

305.3 For the purposes of this chapter, except where specifically provided otherwise, the word "assess" means to value real property for tax purposes.

305.4 For the purposes of this chapter, except where specifically provided otherwise, the word "assessment" means a real property valuation established by the Deputy Chief Financial Officer for tax purposes against which the rate of tax is applied to arrive at the tax liability.

305.5 For the purposes of this section, the terms "assess" and "assessed" do not include changes in assessed value resulting from new construction, additions to existing structures, damages to or destruction of property, and any other similar changes specified in D.C. Code §§ 47-829 and 47-830 (1981 Ed.).

History

• SOURCE: Regulation No. 74-35 effective December 12, 1974, 21 DCR 1643 (January 20, 1975), 16 DCRR §§ 101, 104.

9 DCMR § 306 ASSESSED VALUE AND CLASSIFICATION

306.1 The assessed value of all real property shall be the proposed estimated market value established on or before January 1st of the year preceding the tax year, as determined by the Deputy Chief Financial Officer, except as follows:

(a) The assessed value of new structures and other improvements added to the assessment roll as of July 1st each year shall be the estimated market value as of that July 1st; and

(b) The assessed value of new structures and improvements added to the assessment roll as of January 1st each year shall be the estimated market value as of January 1st of the tax year.

306.2 The assessed value of a property shall be established on the basis of the most current, accurate, and conclusive evidence of market value available at the time the assessed value is determined, in accordance with the provisions of § 307.

306.3 The Deputy Chief Financial Officer is authorized to conduct exterior and interior inspection of a property if, in the Deputy Chief Financial Officer's judgment, an inspection is necessary in order to establish the assessed value of the property.

306.4 Class 1A or Class 1B Property shall be used for dwelling purposes. Class 1A Property shall comprise 3 or more dwelling units. Class 1B Property shall comprise no more than 2 dwelling units.

History

• SOURCE: Regulation No. 74-35 effective December 12, 1974, 21 DCR 1643 (January 20, 1975), 16 DCRR §§ 105, 106; as amended by Final rulemaking published at 73 DCR 010858 (July 31, 2026).

9 DCMR § 307 DETERMINATION OF ASSESSED VALUE

307.1 In determining the assessed value of property the Deputy Chief Financial Officer shall take into account all available information which may have a bearing on the market value of the real property including, but not limited to, the following:

(a) Government imposed restrictions;

(b) Sales information for similar types of real property;

(c) Mortgage or other financial considerations;

(d) Replacement costs, less accrued depreciation because of age, condition, and other factors;

(e) Income earning potential (if any);

(f) Zoning;

(g) The highest and best use to which the property can be put; and

(h) The present use and condition of the property and its location.

307.2 In considering the factors set forth in § 307.1, the Deputy Chief Financial Officer may apply, when appropriate, one or more of the generally recognized approaches to valuation set forth in this section or any other method the Deputy Chief Financial Officer deems necessary to arrive at estimated market values.

307.3 The Deputy Chief Financial Officer may utilize the comparable sales approach to valuation, which bases assessed value on the price or prices at which reasonably comparable properties have recently sold, in accordance with the following guidelines:

(a) Sales which represent arm's length transactions between buyer and seller shall be used in analyzing market values. Sales which do not represent arm's length transactions shall either be adjusted for differences or disregarded; and

(b) Sales comparisons should be made by property type within an assessment area; Provided, that if sufficient sales data for an assessment area is not available, sales data from other similar areas may be used.

307.4 The Deputy Chief Financial Officer may utilize the replacement cost approach to valuation, which bases assessed value on the cost of replacing property with new property of similar utility at present price levels, in accordance with the following guidelines:

(a) The replacement cost of a property may be estimated by either of the following methods:

(1) Adjusting the property's original cost for price level changes; or

(2) Applying current prices to the property's labor and materials components and taking into account any other costs typically incurred in bringing the property to a finished state.

(b) Replacement cost shall be reduced by the amount of depreciation or estimated loss of value because of age, condition, or other factors.

307.5 The Deputy Chief Financial Officer may utilize the income approach to valuation, which bases assessed value on the amount that investors would be willing to pay to receive the income that the property could be expected to yield, in accordance with the following guidelines:

(a) An indication of the value of an income producing property may be estimated by computing the present worth of a future income stream;

(b) The income stream shall be capitalized or converted into an indicated value; and

(c) The amount to be capitalized may be either the gross return or the net return.

History

• SOURCE: Regulation No. 74-35 effective December 12, 1974, 21 DCR 1643 (January 20, 1975), 16 DCRR §§101 108.

9 DCMR § 308 INFORMATION TO BE PROVIDED BY PROPERTY OWNERS

308.1 If the Deputy Chief Financial Officer determines that, in order to carry out the functions and responsibilities of the Mayor under the Act, facts in the possession of a property owner should be made available, the Deputy Chief Financial Officer may, by written notice to the property owner, require the owner to provide such facts as, in the discretion of the Deputy Chief Financial Officer, will assist the Deputy Chief Financial Officer to determine the estimated market value of the property.

308.2 Information provided in response to the notice given under § 308.1 shall be given on the form prescribed by the Deputy Chief Financial Officer.

308.3 In the absence of any extension of time granted by the Deputy Chief Financial Officer, the information filed in accordance with §§ 308.1 and 308.2 shall be filed with the Deputy Chief Financial Officer within thirty (30) days from the date on which the written notice was mailed to the property owner.

308.4 Any information obtained from a property owner pursuant to this section concerning any income derived from investment or income-producing real property shall be handled in the same confidential manner as is provided in paragraphs (a), (b), (c), and (d) of D.C. Code § 47-1805.4 (1981 Ed.).

308.5 Any violation of the provisions of § 308.1 shall be a misdemeanor and shall be punishable by a fine not exceeding one thousand dollars ($1,000) or imprisonment for six (6) months, or both, in the discretion of the Court.

308.6 All prosecutions under this section shall be brought in the Superior Court of the District of Columbia on information by the Corporation Counsel of the District of Columbia (or an Assistant Corporation Counsel) in the name of the District of Columbia.

History

• SOURCE: Regulation No. 74-35 effective December 12, 1974, 21 DCR 1643 (January 20, 1975), 16 DCRR §109.

9 DCMR § 309 AVAILABILITY OF RECORDS

309.1 The estimated assessment roll, all maps, field books, assessment sales-ratio studies, copies of any documents received from the Office of the Surveyor, and plats shall be available for public inspection during normal business hours.

309.2 Records of individual real properties, including any notes, memoranda, and statement(s) indicating the basis upon which the real estate has been assessed, shall be open for inspection by the owner or the owner's duly authorized representative during normal business hours; Provided, that an owner may be required to give the Deputy Chief Financial Officer notice of his or her intention to inspect records at least twenty-four (24) hours before the inspection.

309.3 Copies of all material shall be furnished to any person after the submission of a Freedom of Information Act request pursuant subchapter II of the District of Columbia Administrative Procedure Act (D.C. Official Code § 2-531, et seq.). The Deputy Chief Financial Officer shall collect a fee as permitted by law for the costs of such copies, unless the fee shall be waived under authority of law. Material shall be deemed available and delivered when published and accessible on the Internet.

309.4 Copies of documents recorded and indexed at the Recorder of Deeds shall not be subject to a Freedom of Information Act request, as such documents are already available to the public generally.

309.5 Copies of real property tax bills or assessment notices shall be furnished to the owner or the owner's duly authorized representative without charge. A duly authorized representative is one who has a properly completed Letter of Agent Authorization on file and in force for the tax year or tax years requested. The duly authorized representative shall submit a copy of the Letter of Agent Authorization at the time the request for copies of real property tax bills or assessment notices is made.

309.6 Any person may request a copy of a real property tax bill or assessment notice of a real property by submitting a Freedom of Information Act request pursuant to subchapter II of the District of Columbia Administrative Procedure Act (D.C. Official Code § 2-531, et seq.).

309.7 Freedom of Information Act requests should be made in writing and delivered to: Freedom of Information Officer, Office of Tax and Revenue, 941 N. Capitol Street, NE, Suite 810, Washington, DC 20002. Such requests may also be faxed to the attention of the Freedom of Information Officer at (202) 442-6479.

History

• SOURCE: Regulation No. 74-35 effective December 12, 1974, 21 DCR 1643 (January 20, 1975), 16 DCRR § 110; as amended by Final Rulemaking published at 48 DCR 11705 (December 28, 2001).

9 DCMR § 310 PUBLICATION OF ASSESSMENT LISTINGS

310.1 The Deputy Chief Financial Officer shall publish annually a listing of the assessed value of each property by lot, square, and address where available.

310.2 The Deputy Chief Financial Officer shall publish the annual listing in sufficient quantity to allow for distribution to the One Judiciary Square Building, the main public library, and at least one (1) public library branch in each of the eight wards of the city.

310.3 For purposes of § 310.2, the annual listing shall be deemed published and distributed when it is made available for viewing via electronic media at the stated locations.

310.4 Additional copies of the listing shall be made available to any person upon request, and such request should be made as outlined in § 309.7. The Deputy Chief Financial Officer may, in his or her discretion, provide the listing by an electronic medium or in a tangible format. The listing shall be deemed available and delivered to the person when published and accessible on the Internet. A reasonable fee may be charged for the cost of providing (at the discretion of the Deputy Chief Financial Officer) the listing by an electronic medium other than via the Internet.

History

• SOURCE: Regulation No. 74-35 effective December 12, 1974, 21 DCR 1643 (January 20, 1975), 16 DCRR § 111; as amended by Final Rulemaking published at 48 DCR 11705 (December 28, 2001).

9 DCMR § 311 NOTICE TO TAXPAYERS

311.1 The Deputy Chief Financial Officer shall notify each owner of taxable property by mail of the assessment of the owner's real property for the next fiscal year.

311.2 The notice or accompanying statement shall include all of the information required by D.C. Official Code § 48-824(b)(3).

311.3 Notices shall be mailed as soon as possible after January 1st of each year, but not later than March 1st of each year (unless extended under D.C. Official Code § 47-824(b)(4)).

311.4 Unless otherwise specified, any notice, bill, or statement required by this chapter or other applicable provision of law to be served upon the property owner shall be deemed to be served when mailed by first class mail to the last known address of the property owner as recorded in the real estate assessment records of the District.

311.5 Appeals (for which a letter of agent authorization is submitted or shall be submitted) shall be filed electronically where the agent or agent’s employer submits five (5) or more appeals during any tax year. For the purposes of this section, the term “agent” and the phrase “agent’s employer” means any person which represents a real property owner, whether itself or through its employees, during an assessment appeal for which the person does not have an equity interest in, either directly or indirectly, or is not directly employed by, the real property owner.

History

• SOURCE: Regulation No. 74-35 effective December 12, 1974, 21 DCR 1643 (January 20, 1975), 16 DCRR § 112; as amended by Final Rulemaking published at 48 DCR 11705 (December 28, 2001); as amended by Final Rulemaking published at 67 DCR 22245 (February 28, 2020). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 311

9 DCMR § 312 INFORMATION FROM DISTRICT OF COLUMBIA AGENCIES

312.1 Within five (5) days from the date of the filing of a deed recordation tax return, the Recorder of Deeds shall transmit the return to the Office of Tax and Revenue.

312.2 The Department of Consumer and Regulatory Affairs shall forward to the Office of Tax and Revenue a copy of each building permit relating to structural, electrical, or plumbing changes within five (5) days from the date the permit is approved.

312.3 The Zoning Commission shall provide to the Office of Tax and Revenue a detailed listing of each zoning and land use change within ten (10) days from the date of adoption of the change.

312.4 The Board of Zoning Adjustment shall submit to the Office of Tax and Revenue each approved zoning variance within fifteen (15) days from the date of the adoption of the variance.

312.5 The Office of the Surveyor shall provide to the Office of Tax and Revenue copies of each plat recorded in the subdivision books, each plat recorded in connection with condominiums, and a copy of each other plat recorded with respect to record lots within ten (10) days after the plat is recorded with the Office of the Surveyor.

312.6 The Fire Marshal of the Department of Fire and Emergency Medical Services shall, on or before the tenth (10th) day of each month, provide the Office of Tax and Revenue with a listing of each real property in the District which has been damaged or destroyed by fire.

312.7 The Deputy Chief Financial Officer, upon request, may extend the time for the filing of any documents required by this section to be filed with the Office of Tax and Revenue.

History

• SOURCE: Regulation No. 74-35 effective December 12, 1974, 21 DCR 1643 (January 20, 1975), 16 DCRR § 113.

9 DCMR § 313 PAYMENT OF REAL PROPERTY TAX

313.1 Real property taxes are levied as of the beginning of every real property tax year. A payment of a tax year’s real property tax made anytime during that tax year constitutes payment to be applied against such tax levy for the entire tax year, provided that any prior tax year’s liability is first satisfied. Consequently, a payment applied to the current tax year or an earlier open period is not refundable, except to the extent that such payment exceeds all of the real property’s outstanding tax liabilities, including its liability for the entire, current tax year’s real property tax.

313.2 Notwithstanding Subsection 1 of this section, a payment of real property tax may, at the discretion of the DCFO, be refunded if the payment thereof is a result of a substantial error that would cause an injustice to the property owner; provided, that no refund shall be allowed to the extent that such refund shall create a delinquency for any half tax year or full tax year.

313.3 The tax bill shall include the following:

(a) The identity of the property by parcel or lot, and by square number;

(b) The amount of tax due; and

(c) The manner in which the tax is payable according to law.

313.4 If mailed, payment for real property taxes, business improvement district taxes and vault rents must be received at the address stated on the bill by the due date and in accordance with the payment instructions stated on the tax bill.

313.5 Payments of taxes or other charges levied or imposed under Chapters 8 or 10 of Title 47 (including possessory interest taxes), Business Improvement District (BID) taxes, or vault rents where the property or taxpayer is delinquent as to such tax, rent or charge, shall be applied to such delinquencies based on the date that each arose, beginning with the oldest such delinquency and ending with the current liability, until the payment is exhausted. The payment shall be applied to each such delinquency or liability in the following order: costs, penalties, interest, and the original amount of the tax, rent, or other charge.

313.6

(a) For purposes of D.C. Official Code § 811(b), the terms “hotel” and “motel” mean a real property any part of which is classified for tax year 2020 as Class 2 Property under § 47-813, is commercially improved and occupied, and is a hotel, motel, inn, or other place which is regularly used for the purpose of furnishing rooms, lodgings, or accommodations to transients.

(b) A hotel or motel, as defined herein, may pay its first half tax year 2020 real property tax installment through June 30, 2020, and such payment made by such date shall be timely, to the extent it brings the tax liability current. Penalty and interest owed for prior periods are unaffected by the Act. No payment may be designated to a particular period, and a payment is subject to the application of payments under this section. Further, a hotel or motel may not benefit from penalty and interest tax relief relating to sales and use taxes, as provided under D.C. Official Code § 47-4221(d).

(c) Possessory interest tax, owing by the lessee of immune or exempt government real property in lieu of real property tax, shall benefit from the same extension due date and under the same terms and limitations as real property tax owed by hotels and motels as defined under this subsection.

History

• SOURCE: Regulation No. 74-35 effective December 12, 1974, 21 DCR 1643 (January 20, 1975), codified at 16 DCRR §§116, 137; as amended by Final Rulemaking published at 29 DCR 1908 (May 7, 1982); as amended by Final Rulemaking published at 48 DCR 11705 (December 28, 2001); as amended by Final Rulemaking published at 65 DCR 2972 (March 23, 2018); as amended by Final Rulemaking published at 67 DCR 8456 (July 10, 2020); as amended by Final Rulemaking published at 70 DCR 013565 (October 13, 2023). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 313

9 DCMR § 314 PRIVATIZED TAX SALE RESEARCH AND NOTIFICATION

314.1 This section shall apply to tax sales conducted under DC Code § 47-1304.

314.2 For the purposes of this section, the term "research" means research required to locate a person with a legally protected interest in the real property sold at tax sale.

314.3 A tax sale purchaser may submit a request to the Deputy Chief Financial Officer stating that the tax sale purchaser shall conduct research concerning the property which he or she purchased. The request shall be submitted after the expiration of the statutory redemption period; provided that the tax sale purchaser shall not submit the request unless the tax sale purchaser shall have applied for a tax deed within the prescribed period of time; provided further that the application filing date shall precede or be simultaneous to the date of the request.

314.4 The request must identify the Square, Suffix and Lot numbers, or the Parcel and Lot numbers, of the property for which the research shall be conducted. If the property is identified by a parcel number, the letters "PAR" must precede the parcel number. An approved title company to perform the research, including its address and telephone number, shall also be stated in the request.

314.5 Once the request has been made, the Deputy Chief Financial Officer shall review its billing system for redemption payments.

(a) If the property has been redeemed, the request for research shall be denied.

(b) If the property has not been redeemed, the Deputy Chief Financial Officer shall notify the tax sale purchaser that he or she shall initiate the research.

314.6 After the request has been approved by letter from the Deputy Chief Financial Officer, the research shall be performed by the approved title company. An approved title company is one that has:

(a) Been continuously performing title research in the District of Columbia for more than a 1-year period; and

(b) Title insurance in the District of Columbia for liability coverage of $ 100,000 or more.

314.7 The research shall cover a period of at least 60 years, and shall identify all reasonably ascertainable parties with legally protected interests in the property. The title company shall inspect the public record at the Recorder of Deeds, the Superior Court of the District of Columbia, and any United States Bankruptcy Court situated in the District of Columbia metropolitan area, as necessary.

314.8 The party in interest identified through the research shall be promptly notified by the agent of the tax sale purchaser of his or her right to redeem the property before the issuance of a tax deed to the tax sale purchaser. Notification to the party in interest shall be made in substantially the form as the notice in subsection 19 of this section. Notification to each identified party in interest shall be sent by certified mail (return receipt requested) and first class mail.

314.9 The agent shall be either the title company or an attorney-at-law duly licensed to practice law in the District of Columbia.

314.10 The notice shall provide to the party in interest a 30-day period to redeem the property.

314.11 To redeem the property, any party in interest shall contact the Deputy Chief Financial Officer to receive a pay-off for the redemption payment. If the request has been approved, the redemption payment shall include the costs of the research fixed in the amount of $ 350.00.

314.12 Notwithstanding subsection 11 of this section, no costs shall be reimbursed to the tax sale purchaser unless the tax sale purchaser provides the necessary documentation to the satisfaction of the Deputy Chief Financial Officer that the identified parties in interest have been notified. Necessary documentation shall comprise the following: 1) a statement from the title company reflecting the debt incurred; 2) copy of the research; 3) copies of the notices; 4) copies of all returned mail; 5) proof of certified mailings; 6) and return receipts, if any.

314.13 If the party in interest has not redeemed the property within the 30-day period, the Deputy Chief Financial Officer may begin processing the tax deed application.

314.14 The tax sale purchaser shall submit to the Deputy Chief Financial Officer the necessary documentation specified in subsection 12 of this section within 4 months from the date of the letter approving the lax sale purchaser's request under subsection 6 of this section. If the necessary documentation is not so submitted with the prescribed period of time (or as extended by the Deputy Chief Financial Officer), the letter approving the tax sale purchaser's request shall be deemed a letter for payment (hereinafter "bill for tax deed") under DC Code 3 47-1304 wherein the prescribed period of time for payment expired.

314.15 The tax sale purchaser shall receive a bill for tax deed. The bill for tax deed shall be paid in full within 30 days from the date of the bill for tax deed, or as extended by the Deputy Chief Financial Officer. If payment shall not be received by the prescribed date, the tax deed application shall be canceled, the tax sale purchaser shall forfeit the amount paid at tax sale, and the tax sale purchaser shall not receive the costs.

314.16 The redeeming party shall pay the costs if the property is redeemed after the request was approved. If the property is redeemed before the request is approved, the tax sale purchaser shall not be entitled to the costs.

314.17 Failure of the tax sale purchaser to comply in good faith with the provisions of this section may result in the return of the costs to the redeeming party that paid the costs, without recourse against the District.

314.18 The tax sale purchaser that submits the request agrees to hold harmless and reimburse the District for damages incurred as a result of an error or omission in the research or notices.

314.19 The notice for which reference is made in this section shall be in substantially the following form:

[Address of Tax Sale Purchaser's Agent]

[Date]

[Name of Party in Interest]

[Mailing Address of Party in Interest]

Re: Square [Number], Suffix [Letter], Lot [Number] or Parcel [Number], Lot [Number] [Street Address, if any], Washington, DC

Dear Sir or Madam:

You have been identified as a party with a legally protected interest in the above-referenced property. This property was sold at the District of Columbia July [Year] tax sale for delinquent taxes.

Pursuant to District law (DC Code §§ 47-1304 and 47-1306), the property owner and you had six months to redeem the property from the tax sale. The six months expired in January [Year]. The District's records indicate that the payment of taxes in order to redeem the property was not made.

YOU MAY STILL REDEEM THE PROPERTY BY PAYING ALL PRIOR OUTSTANDING TAX LIABILITIES, WHETHER OR NOT OWNED BY THE DISTRICT OF COLUMBIA, IN ADDITION TO THE TAX LIABILITY FOR THE JULY [YEAR] TAX SALE. IF YOU CHOOSE NOT TO PAY THE ENTIRE AMOUNT, A TAX DEED MAY BE ISSUED TO THE TAX SALE PURCHASER AND YOU WOULD LOSE YOUR INTEREST IN THE PROPERTY.

My client purchased the property at the July [Year] tax sale for $ [Amount]. This amount, plus accrued interest, additional costs of $ 350, and any outstanding liabilities from prior years must be paid on or before [Insert Date 30 Days from Notice Date-Bolded, Increased Font and Underlined]. Payments are applied to the oldest liability first, so a partial payment will not be sufficient to redeem the property. Payments must be made at a First Union Bank with cash, money order, certified check or cashier's check, and payable to the D.C. Treasurer.

Pursuant to an agreement with the District, our office is responsible for notifying you of the information in this letter. This office represents the tax sale purchaser and cannot accept payments.

To determine the total amount which must be paid, or if you have any questions or need additional information regarding this matter, please immediately contact the DC Office of Tax and Revenue at (202) 727-4829, and you may also wish to contact Breen Capital Services Corporation at (202) 543-6361 to determine whether prior years' liabilities have been sold to private parties and payoff information related thereto.

Sincerely,

[Name of Tax Sale Purchaser's Agent]

History

• SOURCE: Regulation No. 74-35 effective December 12, 1974, 21 DCR 1643 (January 20, 1975), 16 DCRR § 117; as amended by Final Rulemaking published at 48 DCR 6445 (July 20, 2001).

9 DCMR § 315 TAX SALE COSTS

315.1 For any real property public auction tax sale conducted after December 31, 2000 and before January 1, 2006, an advertising fee in the amount of thirteen dollars ($13) shall be levied against each real property advertised for sale. The fee shall be included in the certificate of sale and added to the amount for which the property shall be sold at public auction.

315.2 For any real property public auction tax sale conducted after December 31, 2005, a tax sale fee in the amount of one hundred fifty dollars ($150) shall be levied against each real property advertised for sale and sold or bid off. The tax sale fee shall be included in the certificate of sale and added to the amount for which the property shall be sold or bid off at public auction.

315.3 For any real property public auction tax sale conducted after July 1, 2011, the tax sale fee described in subsection 315.2 shall be increased to the amount of two hundred dollars ($200). This two hundred dollar ($200) tax sale fee shall be levied against each real property advertised for sale and sold or bid off. The tax sale fee shall be included in the certificate of sale and added to the amount for which the property shall be sold or bid off at public auction.

History

• SOURCE: Regulation No. 74-35 effective December 12, 1974, 21 DCR 1643 (January 20, 1975), 16 DCRR §§ 118, 119, and 120; as amended by Final Rulemaking published at 48 DCR 8197 (August 31, 2001); as amended by Final Rulemaking published at 53 DCR 8492 (October 20, 2006); as amended by Notice of Final Rulemaking published at 58 DCR 2839 (April 1, 2011).

9 DCMR § 316 REAL PROPERTY TAX SALE REDEMPTION AND TAX DEED ISSUANCE RULES

316.1 This section shall apply to any tax sale conducted pursuant to Chapter 13A of Title 47 of the D.C. Official Code.

316.2 Tax Sale.

(a) A prospective tax sale purchaser shall have on deposit with the Cashier’s Office of the D.C. Treasurer twenty percent (20%) of the total purchase price.

(b) If a prospective tax sale purchaser does not have twenty percent (20%) of the purchase price on deposit, a sale cannot be completed, and the property will be re-auctioned immediately or as soon as possible.

(c) If a prospective tax sale purchaser bids on multiple properties, the deposit on record shall be applied to his or her winning bids in the consecutive order that the bids were placed. If a prospective tax sale purchaser bids on a property for which the deposit or any remaining deposit is insufficient, the property for which there is insufficient deposit shall be re-auctioned.

(d) Final payment for all properties purchased is due within five (5) business days from the last day of the tax sale.

(e) If final payment is not received within five (5) business days, 20% of the remaining deposit will be forfeited to the District and the sale of the property will be voided. If a tax sale purchaser purchased multiple properties and can only make a partial payment, the Office of Tax and Revenue will only select as sold to the tax sale purchaser as many of the properties as sold in consecutive order whose combined purchase price does not exceed the amount timely paid by the tax sale purchaser.

316.3 Forbearance.

A real property owner may apply to forbear a tax amount. Such application shall be submitted to OTR up to thirty (30) days prior to the first day of the tax sale. OTR shall review and either approve or deny the application within ninety (90) days of receipt of the application. The application shall be approved if the real property receives a homestead deduction and the tax amount to be sold is less than or equal to seven thousand, five hundred dollars ($7,500). OTR, in its discretion, may also approve an application that demonstrates hardship even if the real property is not receiving the homestead deduction, or the tax amount to be sold is more than $7,500. Upon approval of an application for forbearance, OTR shall remove the real property from the tax sale to which the approved forbearance corresponds or, if the tax sale has already occurred, cancel the sale. Penalties and interest shall continue to accrue on any tax amounts subject to forbearance from tax sale.

316.4 Redemption prior to the initiation of a foreclosure action in the Superior Court of the District of Columbia.

(a) A real property owner shall meet the following conditions:

Pay all real property taxes (including amounts certified to OTR pursuant to D.C. Official Code § 47-1340), business improvement district (BID) taxes, and vault rents to bring the real property’s account to current.

Pay the reimbursable Pre-Complaint Legal Expenses the tax sale purchaser has incurred prior to the initiation of a foreclosure action in the Superior Court of the District of Columbia, as provided in D.C. Official Code § 47-1377(a)(1)(A).

Pay all delinquent special assessments owed pursuant to an energy efficient loan agreement under subchapter IX of Chapter 8 of Title 47.

(b) The real property owner shall make all payments to the District in the manner provided in this section and the tax sale purchaser shall not accept any payment. Pre-Complaint Legal Expenses are collected by the District and reimbursed to the tax sale purchaser.

(c) The real property’s account shall be deemed to have been brought to current for purposes of redemption if the amounts payable to the Mayor, including tax, interest, penalties and expenses falls below one hundred dollars ($100). The remaining balance shall remain due and owing and any remaining expenses shall thereafter be deemed a real property tax.

(d) To stop further adverse actions to enforce collection of the lien sold at tax sale, the property owner shall provide OTR with proof of payment of all outstanding taxes, assessments, fees, costs and expenses in the manner provided below:

(1) If the real property owner pays the real property tax, vault rent, BID tax or other lien certified pursuant to D.C. Official Code § 47-1340, the property owner shall provide OTR with:

(A) A copy of the bill reflecting the outstanding real property taxes, vault rent, BID tax or other lien certified pursuant to D.C. Official Code § 47-1340, fees and costs; and

(B) A copy of the paid receipt issued by the bank; or

(C) A copy of the check or money order, remitted in payment of any tax stated in § 316.4(d)(A) if payment is made via US Mail.

316.5 Prerequisites to begin the processing of a Tax Sale Refund prior to the initiation of a foreclosure action in the Superior Court of the District of Columbia.

(a) To begin the processing of a Tax Sale Refund, the property’s real property taxes, vault rents, BID taxes and expenses payable to the Mayor shall be current or paid to within one hundred dollars ($100) or the tax sale shall have been cancelled in accordance with the requirements set forth in Subsection 316.11.

(b) Upon notification from OTR or information obtained from OTR records, including information on the OTR website, of payment of all real property taxes, vault rents, BID taxes, liens certified pursuant to D.C. Official Code § 47-1340, fees and charges payable to OTR on account of the real property, the tax sale purchaser shall surrender the original Certificate of Sale to OTR at the address provided on the Certificate of Sale.

(c) Upon receipt of a copy of the Certificate of Sale, OTR shall process the Tax Sale Refund.

(d) The Tax Sale Refund shall be comprised of the amount paid at tax sale, including any Surplus, and Statutory Interest.

(e) If a tax bill is requested to pay subsequent taxes and the request is made on or after February 1 (during the 1st half real property tax installment period), or on or after August 1 (during the 2nd half real property tax installment period), the installment attributable to such period may be included on the bill, and if so, shall be required to be paid. Interest attributable to such installment payment is only payable to the purchaser as collected by OTR.

(f) To collect the reimbursable Pre-Complaint Legal Expenses, the tax sale purchaser shall provide the following documentation:

(1) A copy of the Tax Sale Certificate; and

(2) Receipt issued for the rendering of the Pre-Complaint Legal Expenses; or

(3) An affidavit or a declaration from legal counsel attesting to the fact that the Pre-Complaint Legal Expenses were rendered. Such affidavit or declaration shall state when such expenses were incurred. Pre-Complaint Legal Expenses incurred within four (4) months from the last day of the tax sale shall not be reimbursed.

(g)

The documentation required in Subsection 316.5(f) shall be provided to OTR at the address on the Certificate of Sale.

Effective January 1, 2021, the documentation required in Subsection 316.5(f) shall be provided electronically to OTR using OTR’s online portal at MyTax.DC.gov.

(h) Upon receipt of the documentation required in Subsection 316.5(f), OTR shall process the refund of the Pre-Complaint Legal Expenses. Interest shall not be paid on the Pre-Complaint Legal Expenses.

316.6 Payment of subsequent real property taxes by the tax sale purchaser.

(a) The tax sale purchaser shall electronically submit a request to pay subsequent real property taxes on MyTax.DC.gov. The tax sale purchaser may then pay the Tax Sale Purchaser's Bill at the Cashier's Office of the DC Treasurer. Once payment has been remitted, the tax sale purchaser shall immediately provide OTR with a copy of the paid receipt issued by the Cashier's Office of the DC Treasurer and retain a copy of the receipt for the tax sale purchaser's record.

(b) Any intended subsequent tax payment made against the Real Property Tax Bill instead of against a Tax Sale Purchaser’s Bill shall be applied to the real property taxes due and owing against the real property as if the payments were made by the property owner. The tax sale purchaser shall not receive credit for any payment of subsequent real property taxes unless payment is made on a Tax Sale Purchaser’s Bill in the manner provided in Subsection 316.6(a).

(c) Any payments made by a tax sale purchaser pursuant to a Tax Sale Purchaser’s Bill shall be applied to the real property tax account at the time a Tax Deed is issued to the tax sale purchaser.

(d) The Tax Sale Purchaser's Bill shall include all tax, interest and penalty due and owing on the real property for all real property tax periods becoming owed in tax years after the last tax year sold at the tax sale at which the tax sale purchaser purchased his or her lien, which have not been otherwise validly sold to another purchaser whose corresponding certificate of sale is still valid. No partial payment of any half tax year shall be permitted. A Tax Sale Purchaser’s Bill may, at the request of the tax sale purchaser, also include any other periods owed for taxes to the extent such periods have not been validly sold.

316.7 Notices.

(a) The notices of delinquency required by D.C. Official Code § 47-1341 and the post-sale notice required by D.C. Official Code § 47-1353.01 shall be available on OTR's website.

(b) OTR shall mail a notice of tax delinquency on or before May 1st to the person who last appears as the owner of the real property on the tax roll, at the last mailing address shown on the tax roll, in accordance with D.C. Official Code § 47-1341(a). OTR shall mail a second notice at least two (2) weeks before the tax sale to the person who last appears as the owner of the real property on the tax roll, at the last mailing address shown on the tax roll, in accordance with D.C. Official Code § 47-1341(b-1). OTR shall also mail duplicate notices to the premise address if different from the mailing address, addressed to “Property Owner”.

(c) Within thirty (30) days after the date of the tax sale, OTR shall send a post-sale notice to the last known address of the owner in accordance with D.C. Official Code § 47-1353.01. OTR shall also mail a duplicate notice to the premise address if different from the mailing address, addressed to “Property Owner”. A copy of either version of the notice shall be posted to the property by the tax sale purchaser at least forty-five (45) days before the filing of the Complaint to Foreclose the Right of Redemption. The post-sale notice cannot be posted to the property until at least four (4) months from the date of the tax sale.

(d) The tax sale purchaser shall provide notice of the filing of the action to foreclose the right of redemption in the Superior Court of the District of Columbia by filing a notice of the pendency of the action (lis pendens), within thirty (30) days, in the Office of the Recorder of Deeds, pursuant to D.C. Official Code §§ 42-1207, et seq.

(e)

(1) The tax sale purchaser shall notify OTR and the Real Property Tax Ombudsman of filing of the Complaint to Foreclose the Right of Redemption within thirty (30) days of the filing. Such notification shall be by electronic mail to OTR’s Tax Sale Unit at taxsale@dc.gov and to the Real Property Tax Ombudsman at realpropertytax@dc.gov. The subject line of such electronic mail shall state: “Foreclosure Action Filed.” The electronic mail shall contain as attachments copies of the complaint and certificate of sale. OTR and the Real Property Tax Ombudsman shall provide reply confirmations to the purchaser by electronic mail within five (5) business days of receipt of the notice from the tax sale purchaser.

(2) Notwithstanding paragraph (1) of this subsection, and pursuant to Section 370, the tax sale purchaser shall notify OTR and the Real Property Tax Ombudsman of filing of the Complaint to Foreclose the Right of Redemption within thirty (30) days of the filing. Notice to OTR shall be provided electronically using OTR’s online portal at MyTax.DC.gov. The notification shall contain as attachments copies of the complaint and certificate of sale. The tax sale purchaser should retain a copy of the submission confirmation generated by OTR’s online portal. Notice to the Real Property Tax Ombudsman shall be by electronic mail to realpropertytax@dc.gov. The subject line of such electronic mail shall state: “Foreclosure Action Filed.” This electronic mail shall also contain as attachments copies of the complaint and certificate of sale. The Real Property Tax Ombudsman shall provide a reply confirmation to the purchaser by electronic mail within five (5) business days of receipt of the tax sale purchaser’s electronic mail.

316.8 Redemption after initiation of an action to foreclose the right of redemption in the Superior Court of the District of Columbia.

(a) To qualify the property for redemption, the real property owner shall pay in full the following:

(1) Pay all real property taxes (including amounts certified pursuant to D.C. Official Code § 47-1340), BID taxes, and vault rents to bring the real property current.

(2) Pay the reimbursable Pre-Complaint Legal Expenses the tax sale purchaser has incurred prior to the initiation of a foreclosure action in the Superior Court of the District of Columbia, as provided in D.C. Official Code § 47-1377(a)(1)(A);

(3) Pay all Post-Complaint Legal Expenses to which the tax sale purchaser is entitled to reimbursement under D.C. Official Code § 47-1377(a)(1)(B) where an action to foreclose the right of redemption has been filed;

(4) Pay all delinquent special assessments owed pursuant to an energy efficiency loan agreement under subchapter IX of Chapter 8 of Title 47.

(b) With the exception of Post-Complaint Legal Expenses, the real property owner shall make all payments to the District and the tax sale purchaser shall not accept any payment. Pre-Complaint Legal Expenses are collected by the District and reimbursed to the tax sale purchaser. The tax sale purchaser shall not include Pre-Complaint Legal Expenses in Post-Complaint Legal Expenses.

(c) Upon notification that the property owner is attempting to Redeem, OTR may request a Payoff Statement from the tax sale purchaser that indicates all allowable, reimbursable Post-Complaint Legal Expenses.

(d) Within fourteen (14) days of a request for a Payoff Statement made by OTR, the tax sale purchaser shall provide the property owner and OTR with a Payoff Statement reflecting the amount necessary to satisfy the Post-Complaint Legal Expenses. If the tax sale purchaser fails to respond to the request for a Payoff Statement, OTR will send by certified mail a request to the tax sale purchaser for a Payoff Statement.

(e) Failure to provide OTR with a copy of the Payoff Statement within fourteen (14) days from the date of the request sent by certified mail may result in the issuance of a Certificate of Redemption to the owner, upon request.

(f) If there is a dispute regarding the amount required to satisfy the Post-Complaint Legal Expenses, any party shall apply to the Superior Court of the District of Columbia for an order fixing the amount of expenses.

(g) The property owner shall pay in full the reimbursable Post-Complaint Legal Expenses payable to the tax sale purchaser. All payments of reimbursable Post-Complaint Legal Expenses shall be made to the tax sale purchaser, not to OTR.

(h) The real property’s account shall be deemed to have been brought to current for purposes of redemption if the amounts payable to the Mayor, including tax, interest, penalties and expenses is less than one hundred dollars ($100). The remaining balance shall remain due and owing and any remaining expenses shall thereafter be deemed a real property tax.

(i) At the time the property owner pays the Post-Complaint Legal Expenses as provided in this section, the tax sale purchaser shall provide to the property owner a receipt showing full satisfaction of said expenses.

(j) If the tax sale purchaser has filed a Lis Pendens at the Recorder of Deeds, within thirty (30) days from redemption, as provided in Subsection 316.8(a), the tax sale purchaser shall file a Release of Lis Pendens with the Recorder of Deeds.

316.9 Collection of the Tax Sale Refund after the initiation of a foreclosure action in the Superior Court of the District of Columbia.

(a) The tax sale purchaser shall submit the following documentation to begin the processing of a Tax Sale Refund, provided that all amounts required to be paid to OTR under Subsection 316.8 shall have been paid or the tax sale shall have been cancelled in accordance with the requirements set forth in Subsection 316.11:

(1) Copy of Tax Sale Registration Form with D.C. Cashier's receipt documenting payment;

(2) Copy of Tax Sale Certificate, if issued to Purchaser or assignor;

(3) Proof of subsequent tax payments, if applicable, in the form of a copy of the D.C. Cashier's receipt or a copy of the front and back of the cancelled check;

(4) Proof of the incurred Pre-Complaint Legal Expenses in the same manner as provided in Subsection 316.5(f).

(b) Upon receipt of the documentation required in paragraph (a) of this section, OTR shall process the Tax Sale Refund.

(c) The Tax Sale Refund shall be comprised of:

(1) The amount paid for the property sold at tax sale, including Surplus, and Statutory Interest. Statutory Interest shall be paid on the amount for which the property was sold (excluding Surplus). Statutory Interest shall not be paid on the Surplus.

(2) The Pre-Complaint Legal Expenses; and

(3) The amount paid pursuant to a Tax Sale Purchaser’s Bill to satisfy the subsequent real property taxes inclusive of interest.

(d) The Statutory Interest is paid on the amount of the real property tax delinquency sold at tax sale and accrues at a rate of 1 1/2 percent per month or part thereof.

(e) Interest is paid only on the base tax amount paid by the tax sale purchaser for the subsequent real property taxes and accrues at a rate of one and one-half percent (1½ %) per month or part thereof. No interest shall be paid for penalty and interest paid by the tax sale purchaser, although same shall be paid by the tax sale purchaser in addition to base tax. The interest shall begin to accrue on the first day of the month following the date the subsequent tax payment was made and shall cease to accrue on the date of cancellation or the Date of Redemption.

316.10 Issuance of a Tax Deed.

(a) To apply for a Tax Deed, the tax sale purchaser shall submit to OTR a certified copy, including an electronically issued copy with the official court date stamp and issuing judge’s electronic signature, of the final judgment issued by the Superior Court of the District of Columbia that forecloses the right of redemption to the real property and orders the issuance of a Tax Deed to the tax sale purchaser upon payment of the amounts specified in a Bill for Tax Deed.

(b) Upon proper application to OTR for a Tax Deed, the tax sale purchaser shall be issued a Bill for Tax Deed.

(c) The Bill for Tax Deed shall be satisfied within thirty (30) days of the final judgment and may include the following: (1) a Real Property Tax Bill; (2) BID tax bill; (3) Vault Rent Bill; and (4) Payoff Statements from subsequent and prior year tax sale purchasers.

(d) Payment of the Bill for Tax Deed may be made in the following ways:

(1) Any Surplus shall be applied to the outstanding taxes, assessments, fees and other costs due and owing against the real property. Any remaining surplus shall appear as a credit on the real property tax account and shall be refunded to the party who made the overpayment only upon receipt of a written request for refund that includes proof of payment; or

(2) If the Surplus (if applicable) is insufficient to pay the total taxes, assessments, fees and other costs due, the amount necessary to pay the total taxes, assessment, fees and other costs shall be paid in the form of cash, certified check, cashier’s check or money order.

(e) If the payment is made by certified check, cashier’s check or money order, the tax sale purchaser shall provide OTR with:

(1) A copy of the certified check, cashier’s check or money order remitted in payment of the Bill for Tax Deed;

(2) A copy of the receipt issued by the bank, the Cashier’s Office of the D.C. Treasurer and/or Third-Party Assignee; and

(3) A copy of the release showing that the Payoff Statement from the Third-Party Assignee and/or prior years or subsequent years tax sale purchasers has been satisfied.

(f) If payment is made by cash, the tax sale purchaser shall so indicate on the receipt and provide OTR with:

(1) A copy of the receipt issued by the bank, Cashier’s Office of the D.C. Treasurer and/or Third-Party Assignee indicating payment by cash;

(2) A copy of the release showing that the Payoff Statements from any and all Third-Party Assignees and prior years’ and subsequent years’ tax sale purchasers have been satisfied.

(g) The tax sale purchaser may forfeit all monies paid for the property at tax sale and any payments made toward the subsequent real property taxes if the tax sale purchaser fails to satisfy the Bill for Tax Deed on or before the due date provided on the Bill for Tax Deed.

(h) The tax sale purchaser shall provide Payoff Statements and receipts from prior years and subsequent years tax sale purchasers. Proof of payment includes:

(1) Copies of certified payments and receipts showing that the prior years and subsequent years tax sale purchasers’ Post-Complaint Legal Expenses were paid; and

(2) If applicable, signed releases from prior years and subsequent years tax sale purchasers or tax sale purchasers’ representatives that all Post-Complaint Legal Expenses were paid.

316.11 These are rules and prerequisites for Cancellation of a Certificate of Sale by OTR.

A Certificate of Sale may be cancelled to prevent an injustice to the real property owner or to a person with an interest in the real property.

A Certificate of Sale shall be canceled where:

The amount set forth in the notice of delinquency in order to avoid the tax sale is timely paid;

A forbearance authorization has been approved in writing for the applicable tax sale, in accordance with the requirements of Subsection 316.3;

The amount of tax sold was less than two thousand, five hundred dollars ($2,500) for improved properties;

The property is a Class 1 property that receives the homestead deduction with respect to which there is an outstanding non-void certificate of sale that was issued within three (3) years of the date of the tax sale; or

The property is a Class 1 property with five (5) or fewer units and the record owner or other person with an interest proves:

(A) A failure of OTR to mail any of the notices required by §§ 47-1341(a), 47-1341(b) or 47-1353.01; or

(B) OTR did not correctly or substantively update or change the address of the person who last appears as the record owner as properly updated by the record owner by the filing of a change of address.

(c) If a Certificate of Sale is cancelled, the tax sale purchaser shall be refunded the following:

(1) The amount paid for the property sold at tax sale, including Surplus and Statutory Interest;

(2) The Pre-Complaint Legal Expenses actually paid and properly incurred, with proof of such expenses to be submitted to OTR in the same manner as Subsection 316.5(f);

(3) The amount paid to satisfy the subsequent real property taxes and Statutory Interest;

(4) Post-Complaint Legal Expenses as permitted under D.C. Official Code § 47-1377(a)(1)(B).

(d) When cancelled, OTR shall provide to the tax sale purchaser a notice of cancellation of the tax sale.

(e) If the tax sale is cancelled after the initiation of a foreclosure action in the Superior Court of the District of Columbia, the tax sale purchaser shall provide OTR with the following documents upon receiving notification of cancellation of the tax sale:

(1) A Payoff Statement, signed by the tax sale purchaser’s attorney of record, for the expenses incurred as a result of the initiation of the foreclosure action; or

(2) A copy of the paid receipt issued for the rendering of services for the initiation of a foreclosure action; and

An affidavit attesting that services were rendered for the initiation of a foreclosure action.

Effective January 1, 2021, the documentation required by this subsection shall be provided to OTR using OTR’s online portal at

MyTax.DC.gov.

(f)

(1) Post-Complaint Legal Expenses shall not be reimbursed to the tax sale purchaser when any of the following circumstances would have put the tax sale purchaser on notice to suspend further action to foreclose and to request authorization from OTR to proceed (and OTR timely responded by cancelling the sale within forty-five (45) days or before the complaint was filed, whichever is later):

(A) Errors in ownership obtainable from a title report;

(B) Selling a real property under the threshold;

(C) Property was sold within three (3) years of the date of the Certificate of Sale and there is an outstanding non-void certificate of sale; or

(D) Property was sold in violation of a bankruptcy stay.

(2) Timely disclosure of the foregoing shall be made to the Tax Sale Unit Manager via electronic mail to taxsale@dc.gov.

(3) Notwithstanding paragraph (2) of this subsection, effective January 1, 2021, timely disclosure of the foregoing shall be made to OTR using OTR’s online portal at MyTax.DC.gov.

(g) Sales of properties owned by low-income seniors who later deferred taxes pursuant to D.C. Official Code § 47-845.03 shall be cancelled. Notwithstanding such a cancellation, the amount of accrued attorneys’ fees paid to a tax sale purchaser by the District when a sale is so cancelled shall remain the liability of the property owner. Upon payment of the refund to the tax sale purchaser, OTR shall add the amount representing the legal fees to the real property tax account of the low-income senior.

316.12

(a) The assignee of the Certificate of Sale shall notify OTR's Tax Sale Unit via electronic mail at taxsale@dc.gov of the assignment within thirty (30) days from the assignment of the Certificate of Sale. The assigned Certificate of Sale must meet the following requirements:

A written agreement, executed and acknowledged in the same manner as an absolute deed, that contains the assignee's name, address, telephone number and taxpayer identification number, notification of an assignment of the interest in the payment of other taxes and liabilities (subsequent taxes), and the legal identification of the property; and

The notice of assignment must be signed and acknowledged by the parties agreeing to the assignment and recorded among the land records in the Recorder of Deeds to be effective as to any person not having actual notice.

Recording of the Certificate of Assignment with the Recorder of Deeds shall not constitute notice to OTR. Actual notice shall include a copy of the Certificate of Sale, and be sent to OTR. An assignee shall be compliant with D.C. Official Code § 47-1346(a)(5)[Clean Hands].

(b) Effective January 1, 2021, and in lieu of subsection (a) of this section, the assignor of the Certificate of Sale shall notify OTR’s Tax Sale Unit of the assignment within thirty (30) days from the assignment of the Certificate of Sale. Such notice to OTR shall be provided electronically using OTR’s online portal at MyTax.DC.gov. The assigned Certificate of Sale must meet the following requirements:

A written agreement, executed and acknowledged in the same manner as an absolute deed, that contains the assignee's name, address, telephone number and taxpayer identification number, notification of an assignment of the interest in the payment of other taxes and liabilities (subsequent taxes), and the legal identification of the property; and

The notice of assignment must be signed and acknowledged by the parties agreeing to the assignment and recorded among the land records in the Recorder of Deeds to be effective as to any person not having actual notice.

Recording of the Certificate of Assignment with the Recorder of Deeds shall not constitute notice to OTR. Actual notice shall include a copy of the Certificate of Sale and a copy of the recorded Assignment and be submitted to OTR using OTR’s online portal as described in section (a) above. An assignee shall be compliant with D.C. Official Code § 47-1346(a)(5) [Clean Hands].

(c) At the time that OTR receives notice of the Assignment of the Certificate of Sale, the assignee of the Certificate of Sale shall submit a completed “Compliance Certification for Tax Sale Assignees.”

(d) If an assignee of the Certificate of Sale shall be found in violation of D.C. Official Code § 47-1346(a)(5), the assignee shall forfeit at the discretion of OTR all monies paid for the Certificate of Sale and any monies paid toward the subsequent real property taxes.

(e) Once the Certificate of Sale has been assigned, the assignee becomes the tax sale purchaser of the property associated with the certificate. The assignee shall be bound by all rules and regulations pertaining to a tax sale purchaser, including all rules of forfeiture.

316.13 These are rules and prerequisites to be followed for the filing of a Certificate of Redemption or a Praecipe of Dismissal with the Recorder of Deeds.

(a) After redeeming the property pursuant to Subsection 316.4 or 316.8, as applicable, a property owner may request a Certificate of Redemption or a certified copy of the Praecipe of Dismissal filed in the foreclosure action be filed with the Recorder of Deeds to cause a release of the Certificate of Sale. If a Praecipe of Dismissal is to be filed, it shall contain the square, suffix, and lot numbers, or parcel and lot numbers of the real property.

(b) OTR will process a Certificate of Redemption within sixty (60) days of receipt of a request.

(c) Upon issuance, a Certificate of Redemption releases the Certificate of Sale.

316.14 These definitions are essential to clarify the tax sale process.

(a) Assignment of the Certificate of Sale - The act of transferring all rights acquired in the Certificate of Sale.

(b) Bill For Tax Deed - A special tax bill required to be obtained by the tax sale purchaser, after the Superior Court of the District of Columbia has issued a judgment of foreclosure, to pay all real property taxes (together with penalties and interest), vault rents, BID taxes, liens certified pursuant to D.C. Official Code § 47-1340, fees, costs and expenses due and owing to the District of Columbia or other tax sale purchasers before a tax deed is issued.

(c) Certificate of Redemption - A document that confirms that all outstanding real property taxes (together with penalties and interest), vault rents, BID taxes, liens certified pursuant to D.C. Official Code § 47-1340, fees, costs and expenses have been paid for purposes of redemption only. This document statutorily releases any encumbrance created by the recordation of a certificate of sale.

(d) Certificate of Sale - A document issued to a tax sale purchaser that evidences that its holder is the purchaser of a tax lien.

(e) Date of Cancellation - Date a Certificate of Sale is cancelled.

(f) Date of Redemption - The date of payment of all real property taxes, penalties, interest, vault rents, BID taxes, liens certified pursuant to D.C. Official Code § 47-1340, costs and expenses.

(g) OTR - Office of Tax and Revenue.

(h) Payoff Statement - A document prepared by the tax sale purchaser that itemizes the allowable Post-Complaint Legal Expenses incurred as a result of filing and pursuing a foreclosure action in the Superior Court of the District of Columbia.

Praecipe of Dismissal - a document submitted to the Superior Court of the District of Columbia by the tax sale purchaser to end all legal action to foreclose the owner’s right of redemption subsequent to the owner having made all payments required to redeem or the tax sale being cancelled under the statute and regulations.

(j) Pre-Complaint Legal Expenses – Pursuant to D.C. Official Code § 47-1377(a)(1)(A), the tax sale purchaser’s reimbursable expenses incurred prior to an action to foreclose the right of redemption being filed, which includes the costs of a title search (limit to three hundred dollars ($300)), posting the notice required by § 47-1353.01 ($50), and the recordation fee charged by the District of Columbia to record the Certificate of Sale at the Recorder of Deeds.

(k) Post-Complaint Legal Expenses – Pursuant to D.C. Official Code § 47-1377(a)(1)(B), the tax sale purchaser’s reimbursable expenses incurred for filing and pursuing an action to foreclose the right of redemption in the Superior Court of the District of Columbia, including expenses incurred for personal service of process, service of process by publication, for publication, for postage and reasonable attorney’s fees.

(l) Real Property Owner - An owner of record of real property, or a party with a reasonably ascertainable ownership interest in the real property.

(m) Real Property Tax Bill - The tax bill mailed to a property owner semi-annually for the collection of real property taxes.

(n) Redeem - The payment of all outstanding real property taxes, penalties, interest, vault rents, BID taxes, liens certified pursuant to D.C. Official Code § 47-1340, costs and expenses (including Pre-Complaint Legal Expenses and Post-Complaint Legal Expenses) due and owing on the real property.

(o) Statutory Interest - The monthly simple interest (one and one-half percent (1½ %) that accrues on the amount paid for the purchase of properties sold or bid off at tax sale, excluding surplus, and which begins accruing the first day of the month following the tax sale and ends on the Date of Redemption or Date of Cancellation.

(p) Surplus - The portion of the bid for the property that exceeds the taxes, penalties, interest and costs for which the property was sold.

(q) Tax Deed - The document that transfers fee simple interest in real property, as described in the Certificate of Sale, to the tax sale purchaser pursuant to D.C. Official Code § 47-1382 and subject to (a) a lien filed by a taxing agency under D.C. Official Code § 47-1430(c) (tax deeds arising from sales under § 47-1353(a)(3) or (b) excepted); (b) the tenancy of a residential tenant (other than a tenant described in D.C. Official Code § 47-1371(b)(1)(C) and (D)); (c) easements of record and any other easement that can be observed by an inspection of the real property; (d) an instrument securing payment of a promissory note executed under D.C. Official Code § 47-1353(a)(3); (e) an energy efficiency loan agreement under subchapter IX of Chapter 8 of Title 47, and related documents or instruments and the obligation to pay the special assessment; and (f) a ground lease described in D.C. Official Code § 47-1345(b), any recorded covenant, agreement, or other instrument, and any other document incorporated by reference into a recorded covenant, agreement, or other instrument to which a ground lessor as described in D.C. Official Code § 47-1345(b) is a party or beneficiary.

(r) Tax Sale Purchaser’s Bill - A special tax bill, which includes accrued penalty and interest, requested by the tax sale purchaser to facilitate the payment of current and prior tax liabilities that have not been sold or bid off at tax sale. Payment of these tax liabilities is credited to the Bill for Tax Deed. Interest is tolled for the tax sale purchaser beginning on the first day of the month following the date payment is made. Interest continues to accrue for the owner.

(s) Tax Sale Refund - Comprises the amount paid at tax sale, Statutory Interest, and the Pre-Complaint Legal Expenses.

History

• SOURCE: Regulation No. 74-35 effective December 12, 1974, published at 21 DCR 1643 (January 20, 1975); 16 DCRR §§ 121, 122, and 123; as amended by § 2 of the Real Property Tax Sale Regulations Amendment Act of 1983, effective May 20, 1983 (D.C. Law 5-8; 30 DCR 1789 (April 22, 1983)); as amended by Final Rulemaking published at 48 DCR 6445 (July 20, 2001); as amended by Final Rulemaking published at 51 DCR 757 (January 16, 2004); as amended by Final Rulemaking published at 55 DCR 12277 (December 5, 2008); as amended by Final Rulemaking published at 62 DCR 11552 (August 21, 2015); as amended by Final Rulemaking published at 66 DCR 7170 (June 14, 2019); as amended by Final Rulemaking published at 67 DCR 8066 (July 3, 2020); as amended by Final Rulemaking published at 67 DCR 11444 (October 2, 2020); as amended by Final Rulemaking published at 67 DCR 14715 (December 18, 2020); as amended by Final Rulemaking published at 70 DCR 007986 (June 2, 2023). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 316

9 DCMR § 317 TAX SALE THRESHOLD

317.1 Only those real properties owing at least one thousand two hundred dollars ($1,200) and advertised to be sold at the September 2009 tax sale shall be auctioned at the continuation of the September 9, 2009, tax sale which shall begin on November 30, 2009. As a continuation of the September 2009 tax sale, the November 2009 tax sale shall be under the same terms, conditions, and amounts of the September 2009 tax sale, subject to the threshold provided by this regulation.

317.2 Only those real properties owing at least eight hundred dollars ($800.00) and advertised to be sold at the 2010 tax sale held under section 47-1346 of the D.C. Official Code shall be auctioned.

Only those real properties owing at least five hundred dollars ($500.00) and advertised to be sold at the 2011 tax sale held under Section 47-1346 of the D.C. Official Code shall be auctioned.

317.4 Only those real properties owing at least one thousand dollars ($1,000.00) in taxes and advertised to be sold for the same at the 2012 tax sale held under Section 47-1346 of the D.C. Official Code shall be auctioned.

317.5 Only those real properties with improvement owing at least one thousand dollars ($1,000) and only those unimproved real properties owing at least two hundred dollars ($200) in taxes and advertised to be sold for the same at the 2013 tax sale held under Section 47-1346 of the D.C. Official Code shall be auctioned. The meanings of the words “improvement” and “unimproved” are as defined in 9 DCMR § 9903.1.

317.6 For annual tax sales in July 2015 and prospectively, only those real properties advertised to be sold at the tax sale held under Section 47-1346 of the D.C. Official Code and: (1) with improvement shall be presented for auction for a liability (before tax sale costs) of at least two thousand five hundred dollars ($2,500); or, (2) unimproved shall be presented for auction for a liability (before tax sale costs) of at least two hundred dollars ($200). The meanings of the words “improvement” and “unimproved” are as defined in 9 DCMR § 9903.1.

History

• SOURCE: Final Rulemaking published at 56 DCR 8988 (November 20, 2009); as amended by Final Rulemaking published at 57 DCR 8418 (September 17, 2010); as amended by Final Rulemaking published at 58 DCR 5691 (July 8, 2011); as amended by Final Rulemaking published at 59 DCR 8190 (July 6, 2012); as amended by Final Rulemaking published at 60 DCR 9905 (July 5, 2013); as amended by Final Rulemaking published at 62 DCR 8601 (June 19, 2015). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 317

9 DCMR § 318 TAX DEFERRAL

318.1 A request for real property tax deferral under D.C. Official Code § 47-845 shall be filed on the form prescribed by the Deputy Chief Financial Officer. The form shall be filed with the Chief of the Assessment Services Division, Office of Tax and Revenue, 941 N. Capitol Street, NE, 4th Floor, Washington, DC 20002.

318.2 A taxpayer eligible under § 436 of the Act may defer payment of any real property tax owed which is attributable to an increase in assessed value of more than twenty-five percent (25%) over the assessment of the immediately previous fiscal year.

318.3 The eligible taxpayer must have owned the residential real property for which the tax deferral is claimed for at least sixty (60) consecutive months prior to July 1st of the tax year in which the deferral is requested.

History

• SOURCE: Regulation No. 74-35 effective December 12, 1974, 21 DCR 1643 (January 20, 1975). 16 DCRR § 128; as amended by Final Rulemaking published at 48 DCR 11705 (December 28, 2001).

9 DCMR § 319 SPECIAL DEED TAX SALE

319.1 At the discretion of the Chief Financial Officer, any or all real properties bid back from a real property tax sale pursuant to § 47-1346 of the D.C. Official Code may be subject to sale pursuant to § 47-1353(a)(1) of the D.C. Official Code. This sale shall not provide for any reduction of taxes owed. The Office of Tax and Revenue (OTR), in its discretion, may exclude one or more bid back real properties from the portfolio of properties offered for sale. Nothing in this section shall be construed to limit the use of other processes to sell bid backs as permitted by law, including sales to the District or an instrumentality thereof, to a non-profit, or at a discount sale.

319.2 Bid back real properties may be sold:

(a) On a one-by-one, first-come first-served basis.

(1) OTR may publish a list of bid backs for sale to OTR's Web site, as well as the date of the sale;

(2) When sold on a one-by-one, first-come first-served basis, a purchaser shall have first registered for the sale; registration begins when the sale begins, and purchasers will be registered in order of arrival time based on the time the purchaser signs-in with OTR security, provided that purchaser is actively pursuing completion of the sale and processes the required documents and full payment;

(3) Required documentation shall include a copy of the purchaser's Treasury Form W-9, a completed Form FR-500 (Combined Business Tax Registration Application) and a Buyer Registration form;

(4) Full payment of the purchase price must be received at the time of registration in the form of cash, certified check, cashier's check or USPS money order payable to the D.C. Treasurer;

(5) Certificates of sale shall be mailed to the successful purchaser.

History

• SOURCE: Regulation No. 74-35, effective December 12, 1974, published at 21 DCR 1643 (January 20, 1975); 16 DCRR §§ 129, 131; as amended by Final Rulemaking published at 48 DCR 11705 (December 28, 2001); as amended by Final Rulemaking published at 57 DCR 11618 (December 3, 2010); as amended by Final Rulemaking published at 58 DCR 2839 (April 1, 2011); as amended by Final Rulemaking published at 62 DCR 14090 (October 30, 2015); as amended by Final Rulemaking published at 63 DCR 14858 (December 2, 2016). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 319

9 DCMR § 321 TAX RELIEF FOR HISTORIC SITES

321.1 The Joint Committee on Landmarks of the National Capital (also referred to in this section as the "Joint Committee") shall, on or before December 15, 1975, provide the Mayor with a listing of all buildings which it has designated historic landmarks, and shall notify the Mayor on or before June 15th and December 15th of each succeeding year of any additions or deletions to that listing.

321.2 In order to be eligible for tax relief provided by D.C. Official Code § 47-842, owners of buildings which have been designated historic landmarks by the Joint Committee shall enter into an agreement with the Mayor for a period of not less than twenty (20) years to use and maintain the building in a manner which will assure the continued maintenance and preservation of the building as an historic site.

321.3 An eligible building for which the owner has entered into an agreement with the Mayor in accordance with § 321.2 shall, in addition to being assessed at full market value, be assessed, both as to land and improvements, as an historic site.

321.4 Assessment as an historic site, if it is less than the full market value determined without regard to the historic nature of the building, shall be the basis of tax liability in the District.

321.5 If the Deputy Chief Financial Officer determines that a building (or any part of it) for which an agreement has been entered into (in accordance with § 321.2) was not used and properly maintained in accordance with the agreement during all or any part of any fiscal year, that building (or part of a building) shall be assessed for the fiscal year (or part of fiscal year) on the basis of full market value.

321.6 The difference, if any, between the assessments made on the basis of full market value and assessments primarily made on the basis of the current use of the land and improvements shall be the basis of tax liability for violation of the agreement.

321.7 Any back taxes, plus interest at the prevailing U.S. Treasury Bill rate of interest for the fiscal year (or part of it) during which the terms of the agreement were not met, which may be due and owing shall be payable within sixty (60) days after the date of mailing by the Deputy Chief Financial Officer to the owner of a notice of the amount of taxes and interest due.

History

• SOURCE: Regulation No. 74-35 effective December 12, 1974, 21 DCR 1643 (January 20, 1975), 16 DCRR § 132; as amended by Final Rulemaking published at 48 DCR 11705 (December 28, 2001).

9 DCMR § 322 EXEMPTION FROM REAL PROPERTY TAXATION

322.1 Real property shall meet the following conditions to be eligible for exemption from real property taxation under D.C. Official Code § 47-1002(4) through (19):

(a) Legal title to the real property for which the exemption is sought shall be recorded in the name of the organization or institution requesting exemption from real property taxation on or prior to the effective date of the exemption; provided that in the case of real property encumbered by a deed of the trust, the trustor and equitable owner, as evidenced by a recorded deed, shall be the organization or institution requesting exemption from real property taxation on or prior to the effective date of the exemption; and

(b) Concurrence of ownership and use of the real property shall be required of the owner seeking exemption from real property taxation, except in the following situations and subject to the applicable limitations of the relevant subsections of D.C. Official Code § 47-1002:

(1) Under D.C. Official Code § 47-1002(8) a charitable institution owns the real property and a charitable institution uses the real property; provided that if each institution both owned and used the real property, the real property would be eligible for exemption from real property taxation; or

(2) Under D.C. Official Code § 47-1002(10) a school, college or university owns the real property and a school, college or university uses the real property; provided that if each institution both owned and used the real property, the real property would be eligible for exemption from real property taxation.

(c) The phrase "not organized or operated for private gain" shall mean a corporation organized under the District of Columbia Nonprofit Corporation Act (D.C. Official Code § 29-301.01, et seq.), or such similar provision of a foreign jurisdiction.

(d) The phrase "public charity" shall mean any corporation:

(1) To which contributions are deductible under 26 U.S.C. § 170 and subject to a 50% contribution ceiling of a taxpayer's contribution base for a taxable year; and

(2) Which provides benevolent services to the public that otherwise would be provided by the District of Columbia or the United States of America; provided that in the case of housing, continuous support and rehabilitative services to transient tenants, or continuous support services and care for the disabled or terminally ill, are provided.

322.2 Public charter schools shall be exempt from real property taxation under D.C. Official Code §§ 38-1802.10(b) and 47-1002(10).

322.3 The definition of the word "owner" in D.C. Official Code § 47-802(5) shall not apply to §§ 322 through 326, and shall not apply to the provisions of Chapter 10 of Title 47 of the D.C. Official Code.

322.4 Except as provided in § 322.5, each application for an exemption from real property taxation under this section shall be completed on the FP-300 form, and such form shall be filed with the Office of Tax and Revenue, Real Property Tax Administration, Standards and Exemption Unit, provided that, the form and attachments shall be filed electronically as prescribed by Section 370.

322.5 The following real properties are exempt from the requirement for a written application for exemption from real property taxation:

(a) Real property owned by the United States of America, or an instrumentality thereof;

(b) Real property owned by the District of Columbia, or an instrumentality thereof;

(c) Real property owned by a foreign government and used by that government for legation purposes (as certified by the United States Department of State);

(d) Real property specifically exempt by Act of Congress; and

(e) Real property specifically exempt by Act of Council.

322.6

(a) Real property eligible for exemption under D.C. Official Code § 47-1002 shall be exempt from real property tax as of the first month following the date on which a properly completed application has been filed.

(b) When real property exempt from real property tax becomes ineligible for the exemption, the exemption shall be terminated as of the first full month following the date the property becomes ineligible for the exemption.

322.7 Notwithstanding § 322.6, real property:

(a) Acquired by the United States of America, and exempt from real property taxation under D.C. Official Code § 47-1002, shall be exempt as of the date the deed is acknowledged;

(b) Sold by the United States of America shall be deemed taxable as of the date the deed is acknowledged;

(c) Acquired by a foreign state or international organization, and exempt or immune from real property taxation under D.C. Official Code § 47-1002 or by law of the United States of America, shall be exempt as of the date the deed is acknowledged; or

(d) Sold by a foreign state or international organization shall be deemed taxable as of the date the deed is acknowledged.

322.8 The following shall apply to an interest or use of real property that may be eligible for exemption from taxation under D.C. Official Code § 47-1005.01:

(a) An application for exemption from taxation of the interest or use of real property under D.C. Official Code § 47-1005.01 and this section shall be filed as provided in § 322.4 by the person with the interest or use;

(b) In order to qualify for an exemption from taxation, the person filing the application shall be in privity with the actual owner of the real property that is exempt or immune from real property taxation under D.C. Official Code § 47-1002(1)-(3) or the laws of the United States. For purposes of this subsection, an assignee of a lease shall be deemed to be in privity with the actual owner if the real property would be exempt under D.C. Official Code § 47-1002 if the assignor (in privity with the actual owner) were the owner and the assignee were the original lessee; and

(c) The person with the interest or use shall be deemed the owner for purposes of having standing to file the application for exemption; provided that in the application for exemption, the person with the interest or use shall (in addition to stating such person's name as the applicant) state the name of the actual owner and clearly designate same as such, e.g. United Charities, Inc., Lessee of the United States of America (Actual Owner).

322.9 In the case where land is exempt or immune from real property taxation under D.C. Code Official Code § 47-1002(1) through (3) or the laws of the United States, and the improvement is not so exempt or immune, the applicant shall file a single application for exemption under § 322.4 setting forth why the applicant's interest or use of the land is exempt from taxation under D.C. Official Code § 47-1005.01 and why the improvement is exempt from real property taxation under D.C. Official Code § 47-1002. Where an alternate situation is present, substitute "land" for "improvement" and "improvement" for "land" in the foregoing sentence.

322.10 The following information shall be included in an application for exemption:

(a) The name of the owner-applicant;

(b) The Federal tax identification numbers of the owner-applicant and any lessee thereof;

(c) Location and square, suffix and lot number, parcel and lot number or reservation and lot number of the real property involved;

(d) The date on which the real property (or interest or use for purposes of § 322.8) was acquired;

(e) The current and proposed future use of the real property;

(f) A description of the activities of the applicant, and any lessee or equivalent thereof;

(g) A copy of the certificate of occupancy; provided that a copy of the application for a certificate of occupancy shall be sufficient so long that the application is updated by the applicant with a copy of the certificate of occupancy once the certificate of occupancy is issued;

(h) If an application for a certificate of occupancy cannot be made due to renovation or construction, the applicant shall expeditiously provide to the Deputy Chief Financial Officer copies of applications for building permits to be supplemented by the actual building permits as issued;

(i) The name, address, and telephone number of a person to be contacted for an inspection of the real property; and

(j) Other information that the Deputy Chief Financial Officer may require.

322.11 Real properties for which an application for an exemption has been filed shall be physically inspected to verify and evaluate data in the application and the results of the inspection shall be recorded in the application file.

322.12 Written notice of the decision on an application for exemption shall be mailed to the applicant and the decision shall cite the provision of law under which an exemption is granted and the effective date of the exemption (if approved), or the reason for denial of the exemption.

322.13 If a request for an exemption is denied, the procedure for appeal shall be included in the notice to the applicant for exemption.

SOURCE Regulation No. 74-35 effective December 12, 1974, 21 DCR 1643 (January 20, 1975), 16 DCRR §§133, 134; as amended by Final Rulemaking published at 32 DCR 1360 (March 8, 1985); as amended by Final Rulemaking published at 48 DCR 11705 (December 28, 2001); as amended by Final Rulemaking published at 49 DCR 4347 (May 10, 2002); as amended by Final Rulemaking published at 67 DCR 11444 (October 2, 2020).

District of Columbia Municipal Regulations

Taxation and Assessments

9 DCMR § 322

9 DCMR § 323 CERTIFICATE OF OCCUPANCY REQUIRED TO MAINTAIN EXEMPT STATUS

323.1 In order for real property to qualify for or maintain its exempt status under § 322, a certificate of occupancy (unless not required under 11 DCMR § 3203) shall be on file with the Deputy Chief Financial Officer.

323.2 The Deputy Chief Financial Officer may preliminarily accept a copy of an application for a certificate of occupancy to be supplemented by the awarded certificate of occupancy, once issued.

323.3 The certificate of occupancy evidences the legal use of the real property for the exempt purpose.

History

• SOURCE: Regulation No. 74-35 effective December 12, 1974, 21 DCR 1643 (January 20, 1975), 16 DCR § 135; as amended by Final Rulemaking published at 48 DCR 11705 (December 28, 2001).

9 DCMR § 324 ANNUAL REPORT ON EXEMPT REAL PROPERTY OR EXEMPT INTEREST IN OR USE OF REAL PROPERTY

324.1 Each owner of real property exempt from taxation, except the United States government, the District government, and foreign governments, shall submit to the Deputy Chief Financial Officer a report on or before April 1st of each year stating under oath the purpose(s) for which the exempt property has been used during the preceding calendar year. The form shall be filed electronically as prescribed by Section 370.

324.2 Annually, on or before March 1st, a notice of the reporting requirement shall be sent to an owner of exempt property either by mail or electronically, at the discretion of the Deputy Chief Financial Officer.

324.3 [Repealed]

324.4 Failure of the owner to receive the notice or report form shall not relieve the owner from compliance with the requirements of § 324.1.

324.5 For good cause shown, the Deputy Chief Financial Officer may extend the time for filing an annual report of an exempt organization for a period not to exceed thirty (30) days after April 1st; Provided, that the request for extension must have been filed prior to April 1st.

324.6 Annual reports will be reviewed each year to determine continued eligibility for exemption.

324.7 The Deputy Chief Financial Officer may require the furnishing of additional information and may conduct a physical inspection of the property, at his or her discretion.

324.8 After reviewing the annual report, the Deputy Chief Financial Officer shall determine whether a real property (or interest or use for purposes of § 322.8) remains eligible for the exemption. If the real property (or interest or use for purposes of § 322.8) does not remain eligible for the exemption, the exemption shall be terminated effective April 1st of the year of filing; provided that this subsection shall not preclude the Deputy Chief Financial Officer from terminating the exemption at an earlier date under § 322.6.

324.9 [Repealed]

History

• SOURCE: Regulation No. 74-35 effective December 12, 1974, 21 DCR 1643 (January 20, 1975), 16 DCRR §§ 136, 138, and 140; as amended by Final Rulemaking published at 48 DCR 11705 (December 28, 2001); as amended by Final Rulemaking published at 67 DCR 11444 (October 2, 2020). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 324

9 DCMR § 325 ASSESSMENT OF UNREPORTED EXEMPT REAL PROPERTY OR INTEREST IN OR USE OF REAL PROPERTY

325.1 If the report required to be filed by § 324.1 is not filed within the time provided for filing (including any extension granted by the Deputy Chief Financial Officer under § 324.5), the property affected shall immediately be assessed and taxed.

325.2 The real property tax (or tax on the interest or use of the real property) assessed under this section may be abated by the Deputy Chief Financial Officer for reasonable cause.

325.3 A penalty in the amount of $ 250 shall be assessed whenever a real property tax (or tax on the interest or use of the real property) is imposed under this section. The penalty may be abated by the Deputy Chief Financial Officer for reasonable cause.

325.4 Exempt properties upon which taxes are delinquent are subject to inclusion in the annual tax sale in the same manner as other delinquent properties.

History

• SOURCE: Regulation No. 74-35 effective December 12, 1974, 21 DCR 1643 (January 20, 1975), 16 DCR § 139; as amended by Final Rulemaking published at 48 DCR 11705 (December 28, 2001).

9 DCMR § 326 DIRECT PAYMENT IN LIEU OF TAXES - LOW AND MODERATE INCOME HOUSING

326.1 Real property providing multi-family rental and cooperative housing (for low and moderate income persons), whose owner is receiving assistance through one or more of the Federal programs specified in D.C. Official Code § 47-1002(20)(A), shall be eligible for exemption from real property taxation if the owner of the real property satisfactorily submits to the Deputy Chief Financial Officer an initial application for exemption and, if the owner is organized for profit, an annual income and expense statement.

326.2 To maintain the exempt status of the real property:

(a) A for-profit owner shall submit an annual report under § 324 and an annual income and expense statement by April 1st of each year. The income and expense statement shall reflect the gross income derived from the real property during the latest completed annual accounting period.

(b) A non-profit owner shall submit an annual report under § 324 by April 1st of each year.

326.3 The payment in lieu of taxes shall be made on or before September 15th of the preceding tax year.

326.4 If the owner of the real property is not organized for profit, no annual income and expense statement or payment shall be required.

326.5 If the owner of the real property is organized as a limited dividend or limited profit owner, or a profit owner, a payment in lieu of taxes, in an amount equal to five percent (5%) of the gross income derived from the operation of the building during the latest completed annual accounting period, shall be required.

326.6 If the owner of property exempt under D.C. Official Code § 47-1002(20)(A) fails to make the in lieu of taxes payment in the manner prescribed in § 326.5, the property shall be subject to inclusion in the annual tax sale.

History

• SOURCE: Final Rulemaking published at 25 DCR 8229 (March 2, 1979), 16 DCR § 137; as amended by Final Rulemaking published at 48 DCR 11705 (December 28, 2001).

9 DCMR § 327 TAXATION OF MIXED USE PROPERTY

327.1 The Deputy Chief Financial Officer shall make every effort to afford affected taxpayers the opportunity to apply and qualify for mixed use status, but it shall be the affected taxpayer's responsibility to inform the Deputy Chief Financial Officer of the existence of a mixed use property by properly completing and timely filing the mixed use form. The classes of property for tax purposes are set forth in D.C. Code § 47-813 and § 9903 of this title.

327.2 For the purposes of this chapter, an “affected taxpayer,” is an owner of real property in the District who is required to file a mixed use form in accordance with the provisions of this section.

327.3 If any mixed use form is not submitted to the Deputy Chief Financial Officer on or before September 1st of the year in which such forms are mailed or made electronically available to affected taxpayers on the OTR online portal, in the discretion of the Deputy Chief Financial Officer, or within the time extended by the Deputy Chief Financial Officer, or any mixed use form is timely submitted on or before September 1st, but is either inaccurate or incomplete and, after written or electronic notice from the Deputy Chief Financial Officer and, in the opinion of the Deputy Chief Financial Officer, remains inaccurate or incomplete, the Deputy Chief Financial Officer shall classify the affected taxpayer’s real property as Class 2 Property for the next taxable year (October 1st - September 30th), subject to the property being classified as Class 3 or Class 4.

327.4 The Deputy Chief Financial Officer shall notify affected taxpayers of Class 2 Property status which results because of the application of § 327.3 through the billing process or by any other method which is deemed appropriate.

327.5 Whenever the mixed use form or information sought under the form, or records or documents sought to completely and accurately inform the Deputy Chief Financial Officer as to the mixed use of the property are not submitted in the time provided for by this chapter, and it is shown to the Deputy Chief Financial Officer's satisfaction that the failure to provide the form, information, record, or document was due to reasonable cause and was not due to simple neglect, the Deputy Chief Financial Officer shall apportion the mixed uses of the property according to the best information available.

History

• SOURCE: Final Rulemaking published at 27 DCR 1324 (March 28, 1980), incorporating text of Proposed Rulemaking published at 27 DCR 708, 711 and 712 (February 15, 1980), 16 DCRR §§ 303, 305, 306(b); as amended by Final Rulemaking publishing at 33 DCR 4119 (July 11, 1986); as amended by Final Rulemaking published at 67 DCR 8458 (July 10, 2020); as amended by Final Rulemaking published at 67 DCR 11444 (October 2, 2020); as amended by Final Rulemaking published at 67 DCR 14715 (December 18, 2020). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 327

9 DCMR § 328 APPLICATION FOR MIXED USE CLASSIFICATION

328.1 The mixed use form shall be mailed or made electronically available on the OTR online portal, in the discretion of the Deputy Chief Financial Officer, by the Deputy Chief Financial Officer to all owners of income producing properties in the District. For new applicants, the form shall, upon request to OTR, be made available electronically on the OTR online portal.

328.2 Separate mixed use forms shall be required for each mixed use property, except as otherwise directed by the Office.

328.3 The mixed use form to be completed by affected taxpayers shall contain a request for the following general information with respect to the mixed use property for the reporting period in question:

Property identification, including but not limited to square, suffix, and lot;

(b) The square foot area of improved residential real property defined as Class One Property, if any, and the square foot area of improved real property defined as Class Three Property, if any, and the square foot area of improved real property defined as Class Four Property, if any. [Note: The classes of property for tax purposes are defined in Chapter 99 of this title and D.C. Official Code § 47-813.

(c) The total building area (square foot area) of Class 1 Property, if any, and Class 2 Property;

(d) The affected taxpayer's business registration number. The Deputy Chief Financial Officer may utilize this information for purposes of verifying that the taxpayer is subject to taxes imposed under the District of Columbia Code; and

(e) A certification from the owner or owner's agent that the information supplied on the mixed use form is complete and accurate and the date of certification.

328.4 In addition to the information required in § 328.3, the Deputy Chief Financial Officer may, in his or her discretion, by written or electronic notice to the affected taxpayer, require the taxpayer to provide those records and documents that will assist in determining or substantiating the mixed use classes within the property.

328.5 In the absence of any extension of time for good cause as determined and granted by the Deputy Chief Financial Officer, all records and documents requested under § 328.4 shall be filed with the Office within thirty (30) days from the transmission date of the written or electronic notice to the affected taxpayer, or as otherwise specified.

History

• SOURCE: Final Rulemaking published at 27 DCR 1324 (March 28, 1980), incorporating text of Proposed Rulemaking published at 27 DCR 708, 710 (February 15, 1980); as amended by Final Rulemaking publishing at 33 DCR 4119 (July 11, 1986); as amended by Final Rulemaking published at 67 DCR 8458 (July 10, 2020); as amended by Final Rulemaking published at 67 DCR 11444 (October 2, 2020); as amended by Final Rulemaking published at 67 DCR 14715 (December 18, 2020). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 328

9 DCMR § 329 TIME LIMITATIONS AND EXTENSIONS OF TIME

329.1 As prescribed by Section 370, the information required to be accurately completed on the mixed use form must be electronically submitted to the Deputy Chief Financial Officer not later than September 1st of the year in which the forms are mailed or made electronically available on the OTR online portal, in the discretion of the Deputy Chief Financial Officer, to affected taxpayers.

329.2 Mixed use forms will be mailed or made electronically available on the OTR online portal, in the discretion of the Deputy Chief Financial Officer, to affected taxpayers approximately thirty (30) days prior to the due date provided for in § 329.1.

329.3 In computing any period of time prescribed or allowed, the day of the act from which the designated period of time begins to run shall not be included. The last day of the period so computed shall be included, unless it is a Saturday, Sunday or a legal holiday, in which case the period shall run until the end of the next day which is not a Saturday, Sunday, or legal holiday.

329.4 An extension of time to submit the forms may be granted, in the discretion of the Deputy Chief Financial Officer, for good cause.

329.5 A request for an extension of time to file shall be submitted electronically to the Deputy Chief Financial Officer not later than August 20th of the year in which the forms are mailed or made available electronically, in the discretion of the Deputy Chief Financial Officer, to affected taxpayers. Requests for extensions delivered after that date will not be granted.

329.6 If, in the opinion of the Deputy Chief Financial Officer, a mixed use form submitted prior to the deadline set forth in this section has not been accurately completed (that is, it is either inaccurate or incomplete), the Deputy Chief Financial Officer may so inform the affected taxpayer (or the taxpayer’s agent), and request that the form be accurately completed. In no instance shall the Deputy Chief Financial Officer be accountable for the accuracy or correctness of the mixed-use form supplied and certified to by the affected taxpayer or agent of the taxpayer.

329.7 The mixed-use form shall be filed annually on or before the date provided for in § 329.1, as prescribed in Section 370.

329.8 Failure of the Deputy Chief Financial Officer to mail or make available electronically, in the discretion of the Deputy Chief Financial Officer, a mixed use form to an affected taxpayer shall in no manner diminish the obligation of the taxpayer to secure and file in a timely manner a mixed use form.

History

• SOURCE: Final Rulemaking published at 27 DCR 1324 (March 28, 1980), incorporating text of Proposed Rulemaking published at 27 DCR 708, 711 (February 15, 1980); as amended by Final Rulemaking publishing at 33 DCR 4119, 4120 (July 11, 1986); as amended by Final Rulemaking published at 67 DCR 8458 (July 10, 2020); as amended by Final Rulemaking published at 67 DCR 11444 (October 2, 2020); as amended by Final Rulemaking published at 67 DCR 14715 (December 18, 2020). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 329

9 DCMR § 330 INCOME AND EXPENSE REPORTING BY OWNERS OF INCOME-PRODUCING PROPERTY

330.1 The provisions of §§ 330-334 implement the income and expense reporting by owners of income-producing property.

330.2 The provisions of §§ 330-339 supersede any previous requirements and rules regarding the filing of an income-expense form for income-producing properties for the 1978 reporting period and the imposition of a ten percent (10%) penalty for failure to file such a form under those requirements and rules. In addition, these rules are effective for subsequent reporting years until and unless superseded.

330.3 For the purposes of §§ 330-339, the term "actual gross income" means the following:

(a) In the case of an affected taxpayer's reporting on a cash basis, all of the income actually collected during the reporting period from rentals, parking, and miscellaneous sources, but not to include advance or security deposits, tenant reimbursements for capital improvements or reimbursements for casualty losses; and

(b) In the case of an affected taxpayer's reporting on an accrual basis, all of the income actually accrued, during the reporting period, from rentals, parking, and miscellaneous sources, but not to include advance or security deposits, tenant reimbursements for capital improvements or reimbursements for casualty losses.

330.4 An affected taxpayer under §§ 330-334 is the owner (or owners) of income-producing property or properties in the District who is (are) required to file an income-expense form under the D.C. Official Code § 47-821, and in accordance with the provisions of this chapter.

330.5 Separate income-expense forms for separate income-producing properties are required, unless otherwise directed by the Office.

330.6 In the following instances, there shall be added to the real property tax levied for the next ensuing tax year a penalty in the amount of ten percent (10%) of the tax:

(a) If the appropriate income-expense form is not received by the Deputy Chief Financial Officer on or before April 15th of the year in which written notice of a filing requirement of such form is mailed to the affected taxpayers;

(b) If any income-expense form is timely received on or before April 15th, but is either inaccurate or incomplete and, after written notice from the Deputy Chief Financial Officer and in the opinion of the Deputy Chief Financial Officer, remains inaccurate or incomplete; or

(c) If an income and expense form is received after the time extended by the Deputy Chief Financial Officer.

330.7 For the purposes of §§ 330-339, the word "delivered" also includes a timely postmark if mailed.

330.8 Unless the postmark is illegible, no proof of a different postmark shall be accepted other than a registered or certified mail receipt or an affidavit from the proper postal representative. If the postmark is illegible, an affected taxpayer must submit a duly notarized affidavit which indicates a timely postmark.

330.9 In computing any period of time prescribed or allowed in §§ 330-339, the day of the act from which the designated period of time begins to run shall not be included. The last day of the period so computed shall be included, unless it is a Saturday, Sunday or a legal holiday, in which case the period shall run until the end of the next day which is not a Saturday, Sunday, or legal holiday.

330.10 The Office shall notify in writing affected taxpayers of the application of the ten percent (10%) penalty described in this section through the first-half or second-half real property tax bill or by any other method which it consider appropriate.

330.11 The Office may apply the ten percent (10%) penalty provided for in these rules and regulations to either the first-half or second-half real property tax bill of the affected taxpayer's next ensuing tax year, or through a separate billing within that tax year.

330.12 Any information, form or documents required by §§ 330-334 to be received by the specified date shall be electronically submitted as instructed in the notice on or before 11:59 PM of midnight of such date.

330.13 The Deputy Chief Financial Officer shall provide an electronic receipt of such submission to the indicated email address provided by the filer.

History

• SOURCE: Final Rulemaking published at 25 DCR 10919 (June 22, 1979), codified at 16 DCRR § 101; as amended by Final Rulemaking published at 56 DCR 1487 (February 13, 2009); as amended by Final Rulemaking published at 65 DCR 2464 (March 9, 2018); as amended by Final Rulemaking published at 66 DCR 1203 (January 25, 2019). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 330

9 DCMR § 331 WAIVER OF PENALTY AND INTEREST FOR FAILURE TO FILE

331.1 If an income-expense form, any information sought under the form,

or records or documents sought to completely and accurately inform the Deputy Chief Financial Officer about the income or economic benefits of the income-producing property are not submitted in the time provided for by this chapter, and it is shown to the Deputy Chief Financial Officer's satisfaction that the failure to provide the form, information, record, or document was due to reasonable cause, the Deputy Chief Financial Officer shall not add the penalty described in § 330 to the affected taxpayer's real property tax bill for the next ensuing tax year.

331.2 For the purposes of § 331.1, the phrase "reasonable cause" shall be construed to mean the following:

(a) Those situations in which the owner of the affected property is under a legal disability at the time due for filing. Persons under legal disability are those persons who, at the time due for submission of the forms, did not appreciate their obligation to file and were thus unable to care for their property by reason of advanced age, mental illness, mental defect or physical incapacity;

(b) Death of the record-owner of the affected property within six (6) months prior to the date due for submission of the forms;

(c) Death of the agent who is retained by the taxpayer to prepare the forms, within six (6) months prior to the date due for submission of the forms; and

(d) Any other situation which the Office, in its discretion, considers appropriate for the treatment.

331.3 A waiver of penalty and interest for failure to submit the required income and expense or related information or documents, in accordance with the provisions of this chapter, shall not be granted unless the facts and circumstances to justify the failure have been set forth in writing by the affected taxpayer and approved by the Director, Real Property Tax Administration.

331.4 A request for waiver of penalty and interest under this section shall be submitted to the Deputy Chief Financial Officer on or before November 1st following the due date for submission of the income and expense form, as provided in § 332; provided that the request for waiver of penalty concerning the income-expense form due on April 1, 2009 may be submitted to the Deputy Chief Financial Officer through April 1, 2009.

331.5 In addition to the submission of a request for waiver of penalty and interest as provided for § 331.4, the filing of an accurately completed income-expense form shall be a prerequisite to obtaining a waiver of penalty and interest.

History

• SOURCE: Final Rulemaking published at 25 DCR 10919, 10924 (June 22, 1979); as amended by Final Rulemaking published at 28 DCR 3203 (July 17, 1981), incorporating text of Proposed Rulemaking published at 28 DCR 2160 (May 15, 1981); and by Final Rulemaking published at 31 DCR 3729 (July 27, 1984); as amended by Final Rulemaking published at 56 DCR 6050 (July 31, 2009).

9 DCMR § 332 TIME LIMITS FOR FILING FORMS

332.1 The income and expense form, with accompanying attachments and documents, shall be electronically submitted to the Deputy Chief Financial Officer on or before 11:59 PM of April 15th of the year in which written notice of a filing requirement of such form is mailed to the affected taxpayer. Electronic submission shall require the use of the appropriate and approved forms and document upload and submission functions available through the Deputy Chief Financial Officer’s website portal.

332.2 The income-expense forms will be mailed to affected taxpayers at least thirty (30) days prior to the due date provided for in §331.1.

332.3 When, in the opinion of the Deputy Chief Financial Officer, an income and expense form submitted prior to the deadline set forth in § 331.1 has not been accurately completed (that is, it is either inaccurate or incomplete, or both), the Deputy Chief Financial Officer shall inform the affected taxpayer (or the taxpayer's agent) as soon as possible and request, in writing, that the form be accurately completed and delivered not later than thirty (30) days from the date of the mailing of the notice or as otherwise specified.

332.4 Extensions of time, not to exceed thirty (30) days, to submit the forms may be granted at the discretion of the Deputy Chief Financial Officer for good cause.

332.5 A request for an extension to file shall be delivered to the Deputy Chief Financial Officer not later than April 1st of the year in which the forms are to be mailed to affected taxpayers. Requests for extensions delivered after April 1st shall not be granted.

History

• SOURCE: Final Rulemaking published at 25 DCR 10919, 10922 (June 22, 1979), codified at 16 DCRR § 103; as amended by Final Rulemaking published at 28 DCR 3203 (July 17, 1981), incorporating text of Proposed Rulemaking published at 28 DCR 2160 (May 15, 1981); as amended by Final Rulemaking published at 56 DCR 1487 (February 13, 2009); as amended by Final Rulemaking published at 56 DCR 6050 (July 31, 2009); as amended by Final Rulemaking published at 65 DCR 2464 (March 9, 2018); as amended by Final Rulemaking published at 66 DCR 1203 (January 25, 2019). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 332

9 DCMR § 333 CONFIDENTIALITY OF INFORMATION

333.1 Any information obtained from a property owner pursuant to §§ 330 - 339 concerning any income derived from investment or income-producing real property shall be accorded the same confidentiality as that applied to District income tax returns under § 4(a) of Title 5 of the District of Columbia Franchise Tax Act of 1947 (61 Stat. 342; D.C. Code § 47-1805.4) (1981 Ed.).

333.2 Any violation of the provisions of this section shall be a misdemeanor and shall be punishable by a fine not exceeding one thousand dollars ($ 1,000) or imprisonment for six (6) months, or both, in the discretion of the D.C. Superior Court.

History

• SOURCE: Final Rulemaking published at 25 DCR 10919, 10924 (June 22, 1979), 16 DCRR § 105.

9 DCMR § 334 THE INCOME-EXPENSE REPORTING FORM

334.1 In addition to the collection of the information set forth in § 333.4, the Deputy Chief Financial Officer may, in his or her discretion, by written notice to the affected taxpayer, require the taxpayer to submit electronically additional records and documents that will assist in determining or substantiating the income and economic benefits of the income-producing property.

334.2 In the absence of any extension of time granted by the Deputy Chief Financial Officer, all records and documents shall be electronically submitted on or before 11:59 PM of April 15th midnight of the year in which written notice of a filing requirement of such form is mailed to the affected taxpayer.

334.3 Examples of records and documents include, but are not limited to, rent rolls, leases, subleases, graduated leases, interim financing documents, gross sales figures, gross gallonage figures, receipts and billings, and (certified/uncertified) financial reports.

334.4 The income-expense form required to be completed by affected taxpayers shall contain a request for the following general information with respect to the income-producing property for the reporting period in question:

(a) Income;

(b) Expenses;

(c) Vacancy and credit loss;

(d) Any miscellaneous information deemed by the Office as necessary to inform it fully of the income and economic benefits of the property, including but not limited to the following:

(1) Utility payments;

(2) Owner-occupancy;

(3) Number of units, number of units available for rent, number of units actually rented, length of time units remained vacant;

(4) Length of typical leases to tenants;

(5) Lease escalation clauses;

(6) Lease increases or decreases;

(7) Percentage leases;

(8) Rent collected (with or without parking and with or without miscellaneous income) during a given period of time;

(9) Real estate taxes paid by the owner;

(10) Real estate taxes paid by the lessee;

(11) Age of improvements to the property;

(12) Year major or minor renovation completed;

(13) Gross sales;

(14) Scheduled rental rates for any given span of time within the reporting period; and

(15) Actual Gross Income;

(e) A certification from the owner or agent that the information supplied on the income-expense form is complete and accurate; and

(f) A notice of penalties provided for by law for failure to return timely, return accurately, or return completely the income-expense form described in this section.

334.5 Income producing properties (excepting hotels) shall provide complete rent rolls in the format provided by the Deputy Chief Financial Officer. The rent rolls shall be as of December 31 of the preceding calendar year. The rent rolls shall be an attachment to and integral part of the income-expense form completed and filed electronically with the income-expense form by the affected taxpayer.

334.6 REPEALED.

334.7 REPEALED.

334.8 For the purposes of § 334.5, the term "rent rolls" includes, but is not limited to, the following:

(a) Tenant names, unless residential apartment units are allowed to be substituted therefor by the Deputy Chief Financial Officer;

(b) Floor and square foot area occupied;

(c) Commencement date of the lease;

(d) Expiration date of the lease, or length of the lease;

(e) Annual contract rent; and

(f) Pass through provisions (real estate taxes, and operating expenses, Consumer Price Index Adjustments, options to renew provisions and their terms, and unoccupied areas or vacant space by square foot).

334.9 Income and expenses reported and attributable to corporations, partnerships, associations. or individuals that do not reflect the business income of the property shall not be considered sufficient for purposes of this section.

History

• SOURCE: Final Rulemaking published at 25 DCR 10919, 10921 (June 22, 1979), 16 DCRR § 102; as amended by Final Rulemaking published at 32 DCR 1352 (March 8, 1985); as amended by Final Rulemaking published at 66 DCR 1203 (January 25, 2019). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 334

9 DCMR § 335 APPLICATION FOR LOWER INCOME HOMEOWNERSHIP EXEMPTION

335.1 Application for exemption from real property tax made pursuant to D.C. Law 5-31 shall be made at the time the deed transferring the real property to a qualified lower income homeownership household is presented for recordation; Provided, however, the Mayor may accept amended returns within three (3) years of recordation.

335.2 An exemption, if approved, shall be effective the July 1st following the date the application is received and remain in effect until the end of the 5th tax year following the year in which the property was transferred to the household and only so long as the same household is an owner and occupant of the property.

335.3 For the purposes of determining the income of the household, the Deputy Chief Financial Officer shall consider the following:

(a) Income derived from salaries, wages, tips, commissions or compensation for personal services;

(b) Gains, or profits of whatever kind, in whatever form paid, from any source including income received from the United States or the District of Columbia;

(c) Income derived from any trade or business or sales or dealings in property, including capital assets whether real or personal, growing out of the ownership, or sale of, or interest in such property;

(d) Income derived from rent, royalties, interest, dividends, securities, or transactions of any trade or business carried on for gain or profit;

(e) Income derived from any source whatever, including but not limited to cash distribution from a business or investment entity in which the claimant has an interest alimony and separate maintenance payments (including amounts received under separate maintenance agreement), strike benefits, cash public assistance and relief, sick pay, workmen's compensation, proceeds of life insurance policies, the gross amount of any pension or annuity (including railroad retirement benefits, veteran's disability pension, or payment received under the federal Social Security Act), state or District of Columbia unemployment compensation laws, and non-taxable interest received from the United States, a state or instrumentality thereof;

(f) Household gross income received by all individual members of a household during the calendar year while the individuals were members of the household; and

(g) Gifts from non-governmental sources, food stamps, or food or other relief in-kind supplied by a governmental agency shall not be included in the determination of income for purposes of this section.

335.4 Evidence of income includes, but is not limited to, current pay stubs, employment letters, social security statements, public assistance statements, retirement allotment, unemployment compensation, and previous year's income tax returns.

335.5 Households shall meet the criteria set out in D.C. Code § 47-3502 (1981 Ed.), in order to be eligible for exemption pursuant to this section.

335.6 A shared equity financing agreement complies with the requirements of § 280(d)(3) of the Internal Revenue Code of 1954 if it meets the criteria set out in the definition of a shared equity financing agreement in § 335.3.

335.7 In order to qualify for exemption from taxation pursuant to D.C. Code § 47-3501 (1981), a non-profit housing organization shall meet the criteria set forth in D.C. Code § 47-3505 (1981 Ed.).

335.8 Exemption received pursuant to this section is applicable only to real property purchased after the effective date of the Act.

335.9 In the case of property transferred pursuant to a shared equity financing agreement, in order to obtain exemptions provided for by this section, the qualifying lower income homeownership household shall receive a credit against rent equal to that percentage of the real property tax that would have been due on the property without regard to this section as one hundred percent (100%) minus the percentage of the household's qualified ownership interest bears to one hundred percent (100%).

335.10 Exemption from taxation obtained pursuant to this section shall not apply to intra-family transfers as defined in this section unless they are pursuant to an arms-length transaction as defined in this section.

335.11 In order to qualify for exemption from taxation pursuant to this section, a member of a household shall not be absent from his or her home in the District for more than one hundred eighty (180) days in the calendar year in which application is made.

335.12 If real property for which an exemption has been received pursuant to this section is transferred during the five (5) year exemption period, the affected property shall immediately be assessed and taxed.

335.13 Upon the expiration of the five (5) year period in which exemption from tax has been received pursuant to this section, the affected property shall immediately be assessed and taxed.

History

• SOURCE: Final Rulemaking published at 32 DCR 1360 (March 8, 1985).

9 DCMR § 336 FEES

336.1

(a) The following fees shall cover all services and materials for which a charge is imposed.

DESCRIPTION OF SERVICE FEE

(1) Certificate of Taxes and Assessments Due $15.00

(2) REPEALED

(3) Public Release Extract (on CD in Access format) $150.00

(4) Residential CAMA Extract (on CD in text format) $150.00

(5) Commercial CAMA Extract (on CD in text format) $150.00

(6) Condominium CAMA Extract (on CD in text format) $150.00

(7) Copying of Real Property Assessment Records $1.00 per side

(Property Record Cards, Sales Studies, Worksheets, etc.)

$ 1.00 per side

(8) Assessor Reference Materials $75.00

(9) Tax Map (18" x 24") $30.00

(10) Tax Map (24" x 36") $30.00

(11) Radius Request

200-499 feet $35.00

500-999 feet $40.00

1000 feet or more $100.00

(12) Pertinent Data Book $100.00

(b) The copying charge for furnishing a property owner with a copy of OTR's response to the property owner's appeal to the Real Property Tax Appeals Commission shall be computed using the photocopying charges provided in 1 DCMR § 408. See D.C. Official Code § 47-825.01a(e)(2)(C)(ii)(II).

(c) For search and copying charges associated with responding to Freedom of Information Requests, see 1 DCMR § 408.

(d) No charge shall be made for providing copies of a taxpayer's own tax returns, transcripts of property tax bills, or certificates of good tax standing.

336.2 Where the District of Columbia is a party to an instrument submitted for recordation, or has a beneficial interest in an instrument submitted for recordation, no recordation fee shall be imposed for the recordation of such instrument; provided, that the instrument is being submitted for recordation by the District of Columbia, and is exempt from the tax imposed by D.C. Official Code § 42-1103 and D.C. Official Code § 47-903, or is otherwise not taxable thereunder.

336.3 Effective January 1, 2012, exclusive of any surcharge applicable pursuant to D.C. Official Code § 42-1211 (2011 Supp.) or other provision of law, the following fees shall be charged for recording documents and obtaining copies of documents at the Office of Recorder of Deeds:

One hundred fifty dollars ($150) for the recordation of any and all deeds of trust, mortgages, modifications to deeds of trust, amendments to deeds of trust, or amended and restated deeds of trust;

Twenty-five dollars ($25) for the recordation of all other documents;

Two dollars and twenty-five cents ($2.25) per page for a copy of a document; and

Two dollars and twenty-five cents ($2.25) per document for certification of a copied document.

History

• SOURCE: Final Rulemaking published at 31 DCR 4953 (October 5, 1984); as amended by Final Rulemaking published at 32 DCR 5759 (October 11, 1985); as amended by Final Rulemaking published at 36 DCR 6853 (September 29, 1989); as amended by Final Rulemaking published at 48 DCR 10040 (November 2, 2001); as amended by Final Rulemaking published 58 DCR 8242 (September 23, 2011); as amended by Final Rulemaking published at 59 DCR 12893 (November 9, 2012); as amended by Final Rulemaking published at 62 DCR 656 (January 16, 2015); as amended by Final Rulemaking published at 63 DCR 15784 (December 23, 2016); as amended by Final Rulemaking published at 67 DCR 8066 (July 3, 2020). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 336

9 DCMR § 337 HOMESTEAD DEDUCTION AND SENIOR CITIZEN/DISABLED TAX RELIEF

337.1 For purposes of DC Code §§ 47-849 through 47-850.03 and 47-863:

An owner of real property shall be a holder of title as set forth in the land records of the Recorder of Deeds, including the holder of an estate in fee simple or a freehold interest of indeterminate duration, including a life tenancy, but does not include a holder of a leasehold interest or future interest;

An individual who is not a title holder of record is not an owner of real property, except that the following individual shall be deemed to be an owner:

(1) A trust beneficiary who occupies real property owned of record by the trustee, as sole owner, of an irrevocable special needs trust if the trust beneficiary has a disability as defined in Section 1614(a)(3) of the Social Security Act, approved October 30, 1972 (86 Stat. 1471; 42 U.S.C. §1382c(a)(3)). For the purposes of this subparagraph, a trust is a special needs trust if the trust instrument:

States, among its purposes, that the trust assets are not intended to be counted in determining the beneficiary’s eligibility for needs-based governmental benefits;

Names the beneficiary with a disability as the sole trust beneficiary during his or her lifetime; and

(C) Provides that the beneficiary with a disability shall

not serve as trustee; or

(2) The grantor, settlor or trustor of a revocable trust that holds bare legal title to real property provided, that the grantor, settlor, or trustor is a beneficiary of the trust, resides in the real property as his or her principal residence in the District, exhibits all incidents of ownership of the real property and retains the power to revoke the trust.

(c) Real property that is owned by an entity (including a limited liability company or an irrevocable trust) in whole or in part, other than real property that is wholly owned by the trustee of a special needs trust or wholly owned by a revocable trust, as provided in Subsection 337.1(b), is not eligible for the homestead deduction or the senior citizen/disabled tax relief.

(d) For purposes of the senior citizen/disabled tax relief, one individual aged 65 years or older or one disabled individual must own at least 50% of the real property, and the ownership interests of two or more individuals who are aged 65 or older or are disabled cannot be aggregated to meet the 50% ownership requirements provided in DC Code § 47-863(a)(1A).

337.2 The term “revocable” shall mean that the grantor, settlor, transferor, creator or trustor of the trust has the right to recover property transferred to the trust and to end the trust at any time, thereby regaining absolute ownership of the trust property.

337.3 A trust is revocable if the grantor, settlor or trustor expressly reserves the power to revoke the trust under the terms of the trust instrument.

337.4 If a power to revoke is not expressly reserved, the revocability of the trust is determined under the law governing the trust. Trusts created under District law prior to March 10, 2004 are presumed irrevocable, while District trusts created on or after that date are presumed revocable.

337.5 For purposes of the homestead deduction and the senior citizen/disabled tax relief, if the grantor, settlor or trustor of a revocable trust resides in the real property as his or her principal residence in the District, then he or she is deemed to be a beneficiary of the revocable trust.

History

• SOURCE: Final Rulemaking published at 34 DCR 1837 (March 20, 1987); as amended by Final Rulemaking published at 63 DCR 15785 (December 23, 2016); as amended by Final Rulemaking published at 65 DCR 1448 (February 9, 2018); as amended by Final Rulemaking published at 72 DCR 004457 (April 11, 2025). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 337

9 DCMR § 338 APPLICATION FOR SENIOR CITIZEN HOMESTEAD TAX RELIEF

338.1 Application for the fifty percent (50%) tax liability reduction from real property tax pursuant to § 5(a) of the Real Property Tax Rates for Tax Year 1987 Act of 1986 (herein the "Act"), which is different from the application for the homestead exemption, shall be made by filing on affidavit with the Office of Finance and Revenue. The affidavit shall be in a form approved by the Mayor and shall acknowledge the penalty provided by law for making false statements.

338.2 With the exception of applications made for tax year 1987, the application for the reduction in the property tax liability provided pursuant to § 5(a) of the Act shall be filed no later than June 1st preceding any tax year.

338.3 Commencing with tax year beginning July 1, 1986 and ending June 30, 1987, the Mayor, in order to implement this subsection, shall mail every five (5) years, on or before April 1st, an application to the applicant-owner or co-owner of Class One Property eligible for the reduction in the property tax liability.

338.4 Failure of the Mayor to mail an application to an applicant-owner or co-owner of Class One Property owners eligible for the fifty percent (50%) tax liability reduction provided for the fifty percent (50%) tax liability reduction provided for under this section shall in no manner diminish the obligation of the applicant- owner or co-owner to secure and file, in a timely manner, an application in order to obtain the relief.

338.5 Persons eligible for the fifty percent (50%) tax liability reduction pursuant to § 5(a) of the Act on the first day of any tax year shall remain eligible for the entire tax year.

338.6 Where there is a change in ownership of residential real property after June 1st but before the beginning of the new tax year on July 1st, the new owner shall immediately notify the Mayor of such change and, if eligible for the reduction in the property tax liability pursuant to § 337, file a properly completed application by July 15th.

338.7 If real property for which the fifty percent (50%) tax liability reduction has been received pursuant to § 337 is transferred, the new owner shall immediately notify the Mayor of such change in ownership.

338.8 If real property for which the reduction in the property tax liability has been received pursuant to § 337 is transferred, the new owner of the affected property shall not receive a fifty percent (50%) decrease in their real property tax liability without having made application.

338.9 For the tax year beginning July 1, 1986 and ending June 30, 1987 only, application for the fifty percent (50%) tax liability reduction for the second half of the tax year shall be filed by February 27, 1987.

338.10 For the tax year beginning July 1, 1986 and ending June 30, 1987 only, where there is a change in ownership of residential real property after December 1,1986, but before January 1, 1987, the new owner shall immediately notify the Mayor of such change and, if eligible for the reduction in the property tax liability pursuant to § 337, file a properly completed application by February 27, 1987.

338.11 For the tax year beginning July 1, 1986 and ending June 30, 1987, applications filed by February 27, 1987 shall apply for the remainder of that tax year following the date of application and for succeeding tax years until:

(a) There is a change in ownership in the affected property;

(b) The applicant-owner or co-owner is no longer eligible; or

(c) Required by § 338.15 of this section.

338.12 Any real property owner who has been granted a reduction in real property tax liability for the preceding tax year pursuant to the Act and becomes ineligible for the reduction shall notify the Mayor of such ineligibility.

338.13 If any person subject to the provisions of this section who is required to notify the Mayor of a termination of eligibility for any tax year fails to notify the Mayor of such termination, the fifty percent (50%) tax liability reduction shall be disallowed and the owner of the property shall no longer receive a fifty percent (50%) tax liability reduction for the tax year or years for which the person was ineligible.

338.14 In addition to the provisions of § 338.13, there shall be added to the tax a penalty of ten percent (10%) of such tax for each tax year plus interest at the rate of one percent (1%) per month or portion of a month, from the date prescribed for the payment of the tax to the date the deficiency is paid.

338.15 For purposes of this section and § 337, any application properly completed and timely filed for the tax year beginning July 1, 1987 and ending June 30, 1988 shall also apply to succeeding tax years until the tax year for which quinquennial filing of the applicant-owner or co-owner is required pursuant to the Act.

338.16 Any person who obtains the reduction in the property tax liability under this section, for the tax year beginning July 1, 1987 and ending June 30, 1988 shall obtain the aforementioned relief for each succeeding tax year until the tax year for which the quinquennial filing is required; Provided, that the person remains eligible for the fifty percent (50%) tax liability reduction.

338.17 For the tax years beginning after June 30, 1988, the Mayor shall make applications available to any applicant-owner or co-owner of Class One Property for which the reduction in the property tax liability was not obtained for the preceding tax year or second half of the preceding tax year, whichever is applicable.

338.18 Any person who is not eligible for the fifty percent (50%) tax liability reduction as of the first day of any tax year, shall be eligible for the reduction in the property tax liability for the second half of the tax year if the person becomes eligible for the reduction before January 1st of the tax year.

338.19 To obtain the fifty percent (50%) tax liability reduction for the second half of the tax year, applicant-owners or co-owners of property shall procure, complete, and file an application before January 1st of the tax year.

338.20 Applications filed by February 27, 1987 for the second half of the tax year beginning July 1, 1986 and ending June 30, 1987 shall apply for the second half of such tax year and for succeeding tax years until the tax year for which quinquennial filing of the application is required pursuant to § 338.15; Provided, that the person remains eligible for the relief.

338.21 In order to obtain the reduction in the property tax liability pursuant to § 337, a person shall be sixty-five (65) years of age or older before July 1st of the tax year for which application is being made.

338.22 In order to obtain the fifty percent (50%) tax liability reduction pursuant to $ 337 for the second half of the tax year beginning July 1, 1986 and ending June 30, 1987, an applicant-owner or co-owner shall be sixty-five (65) years of age or older on or before January 1, 1987.

History

• SOURCE: Final Rulemaking published at 34 DCR 1837, 1838 (March 20, 1987).

9 DCMR § 339 SPECIAL RULES FOR COOPERATIVE HOUSING ASSOCIATIONS

339.1 The reduction in the real property tax liability of cooperative housing associations shall be provided for the benefit of members and shareholders of the association who meet the age and income requirements of § 5(a) of the Real Property Tax Rates for Tax Year 1987 Act of 1986 (herein the "Act").

339.2 In order for a shareholder or member of a cooperative housing association, who incurs a pro rata share of tax liability owed by the cooperative housing association, to receive the fifty percent (50%) tax reduction pursuant to the Act, he or she shall first pay the real property tax when due, then file a refund request on a return provided by the Mayor before the June 1st immediately preceding the end of the tax year for which the request for refund is being made.

339.3 A member or shareholder of a cooperative housing association which owns residential real property classified as Class One Property shall be eligible for the property tax liability reduction provided under the Act if the following conditions are met:

(a) The member or shareholder is sixty-five (65) years of age or older:

(b) The member or shareholder occupies a dwelling unit in the property owned by the cooperative housing association;

(c) The member or shareholder receives retirement income, social security benefits, or both as his or her primary means of support as such terms are defined in this chapter; and

(d) The member or shareholder submits an application for the reduction to the Deputy Chief Financial Officer of the Office of Tax and Revenue within the times required by this section.

339.4 Application for a reduction in the real property tax liability of a cooperative housing association pursuant to § 5(a) of the Act shall be made on a form or forms approved by the Mayor which shall include, but not be limited to, a statement of the applicant member's or shareholder's proportionate share of real property tax liability as computed by the cooperative housing association and how that determination was made.

339.5 The applications provided by the Mayor pursuant to § 339.4 shall be signed under oath by the applicant member or shareholder and the officer or agent of the cooperative housing association, and acknowledge the penalties provided by law for making false statements.

339.6 The Mayor may require the officers or agents of each cooperative housing association to distribute the application forms required by this section to its shareholders or members and to collect the completed application forms from the members or shareholders for return to the Deputy Chief Financial Officer of the Office of Tax and Revenue, The officers or agents shall supply any other information as the Mayor may require.

History

• SOURCE: Final Rulemaking published at 34 DCR 1837, 1841 (March 20, 1987).

9 DCMR § 340 Conflict of Interests

340.1 District of Columbia government employees and contractors, or the family members or business associates of District government employees and contractors, under the following classifications or employed in the following offices or positions, shall not be permitted to register for or bid on properties at any tax sale:

(a) Executive Service employees as described in D.C. Official Code § 1.610.51 (2001 ed.);

(b) Office of the City Administrator;

(c) Office of the Deputy Mayor for Planning and Economic Development, and the following subordinate organizations thereunder: Department of Consumer and Regulatory Affairs, Department of Housing and Community Development, and the Office of Planning;

(d) Office of the Chief Financial Officer; and

(e) Mayor, Councilmember, Advisory Neighborhood Commissioner, or a staff member thereof.

340.2 For purposes of this section, the phrase “family member” means parents, spouses or domestic partners, siblings and children.

340.3 For purposes of this section, the term “business associate” means:

(a) An organization in which the employee, elected official, or contractor serves as an officer, director, trustee, or employee; or

(b) Any person or organization with whom the employee, elected official, or contractor is negotiating employment or has any arrangement concerning prospective employment.

History

• SOURCE: Final Rulemaking published at 53 DCR 8490, 8491 (October 20, 2006); as amended by Final Rulemaking published at 62 DCR 8601 (June 19, 2015). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 340

9 DCMR § 341 JULY TAX SALE AND SPECIAL RULES REGARDING NUISANCE ASSESSMENT PROPERTIES

341.1 This section shall apply only to properties to be sold at tax sales for unpaid delinquent assessments arising from the costs of abating nuisances and correcting unsafe conditions pursuant to § 5(b) of An Act Relating to the levying and collecting of taxes and assessments, and for other purposes, approved June 25, 1938 (52 Stat. 1200; D.C. Code § 47-1205) as amended by § 13(c) of the Homestead Housing Preservation Act of 1986, D.C. Law 6-135, effective August 9, 1986; 33 DCR 3771), hereinafter referred to as "nuisance properties." Nuisance properties shall not include owner-occupied single family dwellings.

341.2 Nuisance properties shall also be sold at the annual January tax sale pursuant to §§ 314 through 317 of this chapter, and shall apply to such sales except, where inconsistent, the rules of this section shall apply.

341.3 The redemption period for nuisance properties shall be six (6) months from the last day of the tax sale.

341.4 Nuisance properties for which sixty (60) days has expired from the date the assessment was levied, and which were not sold at the preceding annual January tax sale, shall be sold by the Office of Tax and Revenue at an annual tax sale to be held beginning the third Tuesday in July.

341.5 A notice of assessment and billing for nuisance properties shall be mailed to the record owner (or the designated representative of the record owner) by the Office of Tax and Revenue as soon as possible after the assessment has been levied. The assessment notice shall state the following:

(a) The reason for the assessment;

(b) That if in the event the nuisance assessment is not paid within sixty (60) days from the date the assessment was levied, the real property involved shall be sold at public auction at the next scheduled tax sale, if the amount due, including interest and other charges, is not paid prior to the sale;

(c) The identity of the property by parcel or lot, and by square number;

(d) The amount due; and

(e) The manner in which the assessment is payable according to law.

341.6 Assessments levied on nuisance properties shall be payable immediately upon receipt of the notice of assessment and billing.

341.7 Not less than thirty (30) days prior to the day fixed for sale of the property, a notice of delinquent amounts levied shall be mailed to the record-owner (or the designated representative of the record-owner) of nuisance properties for which sixty (60) days from the date of the assessment has expired without payment of the amount due.

341.8 The notice required by § 341.7 shall state that the real property involved shall be sold at public auction at the next scheduled tax sale if the amount due, including any interest and other charges, is not paid prior to the date specified in the notice for the sale.

341.9 Not less than three (3) weeks prior to the day fixed for sale of the property, a notice of the sale of property to be sold shall be advertised in at least one (1) general circulation newspaper published in the District at least once every two (2) weeks.

341.10 The notice of sale shall state the following:

(a) That the property will be sold at public auction to the highest bidder;

(b) The date, time, and place of the sale; and

(c) The types of delinquent taxes, charges, and assessments for which the property is being sold.

341.11 At the tax sale, each property to be sold shall be announced by lot and square, or parcel number.

341.12 A bidder at the tax sale shall bid by raising his or her assigned registration number.

341.13 The opening bid shall be at least equal to the total amount of the assessment, interest, and other charges due to the District.

341.14 If no bid is received for a property which is at least equal to the total amount of the assessment, interest, and other charges due, the property shall be deemed bid off and sold to the District.

341.15 Each purchaser of property at a tax sale shall be required to deposit with the District at the time of sale not less than twenty percent (20%) of the purchase price as a guarantee of the payment of a total amount required to be paid by the purchaser.

341.16 The deposit of any purchaser at a tax sale who fails to pay the full amount of the bid price, including surplus, within five (5) days (excluding Saturdays, Sundays, and legal holidays) after the last day of the sale shall be forfeited to the District.

341.17 A certificate of sale shall be issued to the purchaser of each property sold at the tax sale.

341.18 Not less than thirty (30) days prior to the expiration of the six (6) month redemption period for nuisance properties, the Deputy Chief Financial Officer of the Office of Tax and Revenue shall mail to the record-owner (or the designated representative of the record-owner) and all other interested parties of property sold pursuant to this section by certified or registered mail, notice of the final date by which the record-owner must redeem the property.

341.19 Within twenty (20) days (excluding Saturdays, Sundays, and legal holidays) after the last day of the tax sale, a written report describing each property sold (except those bid off to the District) shall be filed with the Recorder of Deeds containing the following:

(a) A description of each property;

(b) The person to whom the property is assessed;

(c) The tax, penalty, and other charges due;

(d) The name of the purchaser;

(e) The sale price;

(f) The date on which the property was sold;

(g) The costs of sale involved; and

(h) The surplus bid for the property, if any.

341.20 No deed shall be issued to a holder of a certificate of sale until all assessments, taxes, costs, and charges due the District, of whatsoever nature, have been paid in full.

History

• SOURCE: Final Rulemaking published at 34 DCR 3849 (June 12, 1987).

9 DCMR § 342 [RESERVED]

9 DCMR § 343 [RESERVED]

9 DCMR § 344 [RESERVED]

9 DCMR § 345 [RESERVED]

9 DCMR § 346 DETERMINATION OF ASSESSED VALUE OF REAL PROPERTY OWNED BY A COOPERATIVE HOUSING ASSOCIATION

346.1 The provision of §§ 346 and 347 are adopted under authority of the Cooperative Housing Assessment Procedure and Lower Income Homeownership Tax Abatement and Incentives Act of 1983 Amendment Act of 1988 (the "Act"), effective March 16, 1989 (D.C. Law 7-205; D.C. Code § 47.820.1) and Mayor's Order 89-136.

346.2 The assessed value of improved residential real property owned by a cooperative housing association, for the tax year beginning July 1, 1990, and for each subsequent tax year, shall be the aggregate estimated market value of the proprietary leases, stocks, or other interests in the cooperative housing association as of January 1st preceding the date of assessment, minus the value of all nonreal property assets owned by the cooperative housing association, multiplied by sixty-five percent (65%), and may be adjusted to take into account the factors set forth in § 421a(b) of the District of Columbia Real Property Tax Revision Act of 1974.

346.3 If the Deputy Chief Financial Officer lacks sufficient information upon which to determine the assessed value under § 346.2, the assessed value of improved residential real property owned by a cooperative housing association shall be an amount equal to the estimated market value of the real property assessed as if it were a condominium determined by use of the comparable sales approach, multiplied by seventy percent (70%), minus all non-real property assets owned by the cooperative housing association, multiplied by sixty-five percent (65%), and may be adjusted to take into account the factors set forth in § 421a(b) of the District of Columbia Real Property Tax Revision Act of 1974.

346.4 Adjustments to the assessed value of the cooperative for units leased by the cooperative (including bona fide lifetime or long-term leases to elderly and low income tenants) shall be made by assessing the value of the leased units separately and adding that value to the remaining portion of the cooperative housing association.

Example:

Value of units leased to low income or

elderly tenants

$150,000.00

Value of other leased units

100,000. 00

Total value of leased units

$250,000.00

Value of remaining portion of coop

$10,000,000.00

Total assessed value of real property

$10,250,000.00

346.5 The value of units with lifetime or long-term leases to low income and elderly tenants shall be determined based on income and expense statements submitted by the cooperative housing associations.

346.6 A cooperative housing association shall submit documentation establishing the existence of lifetime or long-term leases to low income and elderly tenants in order for such leases to be considered in assessing real property owned by the cooperative housing association.

346.7 The Deputy Chief Financial Officer may conduct exterior and interior inspection of the property if in the Deputy Chief Financial Officer's judgment an inspection is reasonably necessary in order to establish the assessed value of improved residential real property owned by a cooperative housing association.

History

• SOURCE: Final Rulemaking published at 36 DCR 5940 (August 18, 1989).

9 DCMR § 347 INFORMATION TO BE PROVIDED BY A COOPERATIVE HOUSING ASSOCIATION

347.1 In order to assist the Deputy Chief Financial Officer in determining the assessed value of real property owned by a cooperative housing association, each cooperative housing association shall accurately complete and timely file with the Office on or before September 15, 1989, a Real Property Cooperative Housing Questionnaire, Form Number FP-437 (5/89).

347.2 A cooperative housing association that becomes the owner of real property after August 1, 1989, shall accurately complete and timely file a Real Property Cooperative Housing Questionnaire with the Office no later than sixty (60) days following the date of acquisition of title.

347.3 Information reported on Real Property Cooperative Housing Questionnaires for newly acquired real property that is received during the period between May 1st to and including October 31st will be considered in the assessment process for the second half of the existing tax year, beginning January 1st and information received during the period between November 1st to and including April 30th shall be considered in the assessment process for the entire following tax year beginning July 1st and ending June 30th.

347.4 The Real Property Cooperative Housing Questionnaire shall contain a request for cooperative housing associations to provide information in regard to real property owned by the cooperative housing association specified in § 421a(d)(1) of the District of Columbia Real Property Tax Revision Act of 1974 as well as the following:

(a) A list of all non-real property assets owned by the cooperative housing association;

(b) The estimated market values;

(c) The method for determining market values; and

(d) Any other additional information the cooperative housing association feels should be considered, including proprietary leases, stocks, or other interests in the cooperative housing association.

347.5 Each cooperative housing association shall accurately complete and timely file with the Office, annually, on or before June 1st beginning in 1990, an annual update of the Real Property Cooperative Housing Questionnaire, reflecting any changes in the information submitted in the previously filed Real Property Cooperative Housing Questionnaire.

347.6 An extension of time to submit the Real Property Cooperative Housing Questionnaire or the annual update may be granted by the Deputy Chief Financial Officer for good cause shown, provided a written request for extension is timely filed two (2) weeks prior to the due date. Any extension granted shall not exceed thirty (30) days from the due date of the initial questionnaire or the annual update.

347.7 There shall be added to the real property tax levied upon the property of a cooperative housing association for the next ensuing tax year, a penalty in the amount of ten percent (10%) of the tax if either of the following occurs:

(a) A Real Property Cooperative Housing Questionnaire or an annual update of the Real Property Cooperative Housing Questionnaire is not timely filed; or

(b) A Real Property Cooperative Housing Questionnaire or annual update is timely filed, but in the opinion of the Deputy Chief Financial Officer is not within the form prescribed, and the cooperative housing association has failed to correct or complete the information after thirty (30) days written notice from the Deputy Chief Financial Officer.

347.8 A waiver of the penalty imposed under § 347.7 shall be granted if it is shown that the failure to provide the information or to timely file the form was due to reasonable cause. A waiver of penalty shall not be granted unless the facts and circumstances to justify the waiver have been set forth in writing by the cooperative housing association and approved by the Director, Real Property Tax Administration.

347.9 For the purposes of §347.8, a determination of "reasonable cause" shall be within the discretion of the Department, to be made on a case by case basis, based on the facts presented.

347.10 A request for waiver of penalty under § 347.8 shall be timely filed with the Deputy Chief Financial Officer within sixty (60) days after the due date of the initial Real Property Cooperative Housing Questionnaire, and on or before December 1st following the due date for submission of the annual update of the Real Property Cooperative Housing Questionnaire.

347.11 Any information submitted by a cooperative housing association pursuant to the Cooperative Housing Assessment Procedure and Lower Income Homeownership Tax Abatement and Incentives Act of 1983 Amendment Act of 1988 shall be accorded the same confidentiality as that applied to District of Columbia income tax returns under § 4 of title V of the District of Columbia Income and Franchise Tax Act of 1947, approved July 16, 1947 (61 Stat. 342; D.C. Code § 47-1805.4).

347.12 Any violation of the provisions of § 347.11 shall be a misdemeanor and shall be punishable by a fine not exceeding one thousand dollars ($ 1,000) or imprisonment for one (1) year, or both, in the discretion of the D.C. Superior Court.

History

• SOURCE: Final Rulemaking published at 36 DCR 5940, 5942 (August 18, 1989).

9 DCMR § 348 [RESERVED]

9 DCMR § 349 [RESERVED]

9 DCMR § 350 REAL PROPERTY RECLASSIFICATIONS

350.1 For real property tax year 1991 (July 1, 1990 through June 30, 1991), the Deputy Chief Financial Officer shall reclassify real property, based upon his or her determination that the real property is not classified correctly according to applicable law and regulations, no later than August 15, 1990.

350.2 The Deputy Chief Financial Officer shall notify owners of real property that has been reclassified of the reclassification no later than September 15, 1990.

350.3 An owner of real property that has been reclassified may request a review of the reclassification by timely submitting an application for review of a reclassification on or before November 1, 1990.

350.4 For the purpose of this section, an application for review of a reclassification shall be considered to be submitted timely if it is made on the form prescribed by the Deputy Chief Financial Officer, the form is accurately completed, and the form is delivered or mailed by the due date (as shown by the postmark).

350.5 The Deputy Chief Financial Officer may require the owner to submit, either with the application or after the application has been submitted, documentation to support the application for review of a reclassification, including, but not limited to, the following:

(a) Building permits;

(b) Approvals for parking lots;

(c) Documents evidencing ownership of the property;

(d) Business registration forms; and

(e) Documents evidencing that tax payments have been made.

350.6 The Deputy Chief Financial Officer shall change a reclassification of real property if he or she determines, based on review of documents and investigation, that the real property is not classified correctly according to applicable law and regulations.

350.7 The Deputy Chief Financial Officer shall not make reclassifications retroactive to any prior tax years.

350.8 The Deputy Chief Financial Officer shall give written notice of his or her decision on an application to review a reclassification to the property owner.

350.9 Any person aggrieved by a real property classification or reclassification for real property tax year 1991 may appeal the classification or reclassification to the Superior Court of the District of Columbia in the same manner and to the same extent as provided in D.C. Code §§ 47-3303 and 47-3304, within six (6) months after October 1, 1990.

350.10 If the Deputy Chief Financial Officer fails to give the owner written notice of his or her decision on an application to review a reclassification by December 31, 1990, the appeal rights shall be the same as in § 350.9.

History

• SOURCE: Final Rulemaking published at 37 DCR 5128 (August 3, 1990).

9 DCMR § 351 CREDITS OR REFUNDS DUE TO REAL PROPERTY RECLASSIFICATIONS

351.1 A reclassification may result in either an underpayment or overpayment of real property taxes.

351.2 If a reclassification results in an underpayment of real property taxes, the Deputy Chief Financial Officer shall notify the owner and include the underpaid amount on the next real property tax bill.

351.3 If a reclassification results in an overpayment of real property taxes, the Deputy Chief Financial Officer shall credit the overpayment against the next real property tax bill for that property, unless the owner applies for a refund.

351.4 Owners of real property in the District shall submit applications for refund of overpayments on a form prescribed by the Deputy Chief Financial Officer.

351.5 The Deputy Chief Financial Officer shall not accrue interest on amounts to be credited or refunded to real property owners based on overpayments resulting from reclassifications.

History

• SOURCE: Final Rulemaking published at 37 DCR 5128, 5130 (August 3, 1990).

9 DCMR § 352 DIVISION OR COMBINATION OF LOTS

352.1 The creation of tax lots shall not, in and of itself, result in a reclassification of the real property.

Example: An individual owns one lot that is Class 5 unimproved. The owner requests the property be divided into two (2) tax lots for taxation purposes. Both lots will continue to be treated as Class 5 unimproved property. The owner may be able to obtain a reclassification if the owner can show, for instance, that the property has been subdivided into record lots under the zoning regulations such that the lots are no longer buildable lots and are therefore exempt from Class 5.

352.2 If the Deputy Chief Financial Officer determines that a combination of lots results in the use of the property falling into more than one class, he or she shall apportion the property into the appropriate classes of real property.

Example: An individual owns a commercial building that abuts an unimproved lot. The commercial building is Class 3 property and the unimproved lot is Class 5. If the owner combines the two (2) lots, and the unimproved portion of the new lot continues to meet the requirements for Class 5, the property will be treated as mixed use property, with the portion of the lot on which. the building is located placed in Class 3, and the remainder of the lot placed in Class 5.

352.3

(a) Whenever a division of lots application is filed with OTR, (i) pertaining to and following a record lot subdivision with the DC Surveyor in which multiple property owners joined in and subjected their respective real properties to one or more record lots, and (ii) which record lot(s) subdivision resulted or shall result (pursuant to OTR’s operating system) in OTR’s ownership records treating the multiple property owners as tenants in common of all of the newly created record lot(s), then following the designation by OTR of theoretical assessment and taxation lots (collectively, the “A&T Lots” and individually, an “A&T Lot”) that were requested in the division of lots application, one or more confirmatory deed(s) shall be executed and all such deeds shall be recorded contemporaneously in the land records of the District of Columbia.

(b) Such confirmatory deed(s) shall (i) be executed by the owners of the real properties that had subjected their real properties to the record lot(s) subdivision and (ii) affirmatively recite that each lot owner that owned its respective real property immediately prior to the record lot(s) subdivision remained, as of the date of OTR’s designation of the theoretical A&T Lots, exactly the same legal owner of the corresponding new theoretical A&T Lot(s) resulting from the division of lots application, and with respect to each such owner, in the same aggregate square footage and with the same legal boundaries dividing the ownership of each such owner as the boundaries dividing the ownership of such owner’s corresponding predecessor lot(s) that existed of record immediately prior to the record lot(s) subdivision filed with the DC Surveyor.

(c) The application for division of lots shall be submitted to OTR (i) by all owners of the record lot(s) from which the requested A&T Lots are to be derived, and (ii) with (A) a detailed drawing(s) of the existing lot(s) and the proposed A&T Lots, with bearings and dimensions labeled on each line (or if necessary to accommodate space limitations on the drawings, a line table), (B) the legal description (metes and bounds) of each of the proposed A&T Lots, (C) a letter of agent authorization (when applicable), and (D) any other relevant documents OTR shall require in order to designate the requested A&T Lots. The drawing(s) of the existing lot(s) and of the proposed A&T Lots shall be legible, be to scale, include accurate square footage, and depict the bearings and distances of the perimeter of each existing record lot(s) and proposed A&T Lots. The detailed drawings for division of lots applications creating air right lots shall also include cross sections noting upper and lower elevation limits of each proposed lot.

(d) After receipt and processing of all required documents for the division of lots application, theoretical A&T Lot numbers shall be issued along with the disclaimer document to the applicant(s) that submitted such division of lots application that the designated A&T Lots are theoretical for separate assessment and taxation purposes until the first day of the half of the tax year commencing after the filing of such application (i.e., either October 1st or April 1st).

(e) The confirmatory deed(s) shall be recorded with the Recorder of Deeds expeditiously following issuance of the theoretical A&T Lot numbers or the A&T Lot numbers, whichever occurs first; provided that if there are two or more confirmatory deeds to be recorded, they shall be recorded contemporaneously as referenced in Section 352.3(a) above. If the owners fail to record the confirmatory deed(s), OTR’s ownership records for assessment and billing purposes shall continue to reflect tenant in common ownership by all such owners (owning any portion of the superseded record lot subdivision(s)) for all in rem tax purposes.

(f) Upon recordation of the confirmatory deed(s), the record ownership of the newly designated A&T Lots shall be updated and reflected in the assessment roll as of the time that the theoretical lot(s) are added to the assessment roll (i.e., either October 1st or April 1st).

(g) A Division of Lot(s) Application shall result in two or more proposed assessment and taxation lots and the detailed drawing(s) and dimensions shall match the underlying original lots as they existed immediately prior to the subdivision with the DC Surveyor, provided that an owner of one or more lots that were submitted and became part of the new record lot or lots, may request and obtain any number of A&T Lots provided that the requested A&T Lots with respect to each such owner results in the same aggregate square footage and with the same legal boundaries dividing the ownership of each such owner as the boundaries dividing the ownership of such owner’s corresponding predecessor lot(s) that existed of record immediately prior to the record lot(s) subdivision filed with the DC Surveyor.

(h) The information required above for the application of division of lots represents the minimum requirements for submittal, and OTR may request such additional information as it deems necessary to evaluate and issue the requested A&T Lots.

(i) Applicants may submit any additional information relevant to the application.

(j) If OTR determines that the information submitted is not complete, action on the application shall not be taken until OTR shall have received all requested or required information, and the application may be denied on the basis of incompleteness or inaccuracies which are not resolved, at the discretion of OTR.

History

• SOURCE: Final Rulemaking published at 37 DCR 5128, 5130 (August 3, 1990); as amended by Final Rulemaking published at 69 DCR 009021 (July 22, 2022). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 352

9 DCMR § 353 UNIMPROVED REAL PROPERTY

353.1 The Deputy Chief Financial Officer shall place unimproved real property that does not meet the requirements for Classes 1 through 4 into Class 5 beginning July 1, 1990 (real property tax year 1991).

353.2 For the purpose of Class 5 treatment only, the Deputy Chief Financial Officer shall consider real property to be improved if it has located on it permanently attached equipment used for commercial purposes that makes the land otherwise unbuildable, including storage tanks, railroad tracks and transmittal towers.

353.3 The Deputy Chief Financial Officer shall not place the following unimproved real property into Class 5:

(a) Unimproved real property that receives abutting Class 1 or Class 2 treatment;

(b) Unimproved real property upon which no building of any structure is allowed as a matter of right, pursuant to the District zoning regulations;

(c) Unimproved real property for which a building permit has been issued for the building of an improvement, if the permit is in effect as of July 1, 1990 for real property tax year 1991. A permit will be considered to be in effect for the purpose of this section if it is not expired; and

(d) Unpaved parking lots for which the owner has received all of the necessary approvals from the District. Paved parking lots are considered to be improved lots.

353.4 If the Deputy Chief Financial Officer determines that an unimproved portion of an improved lot meets the requirements of Class 5, the Deputy Chief Financial Officer shall apportion the lot into the appropriate classes of real property.

History

• SOURCE: Final Rulemaking published at 37 DCR 5128, 5131 (August 3, 1990).

9 DCMR § 354 [RESERVED]

9 DCMR § 355 [RESERVED]

9 DCMR § 356 [RESERVED]

9 DCMR § 357 [RESERVED]

9 DCMR § 358 [RESERVED]

9 DCMR § 359 [RESERVED]

9 DCMR § 360 SUPPLEMENTAL ASSESSMENTS: GENERAL PROVISIONS

360.1 Except as otherwise provided, §§ 360 through 368 shall apply to supplemental assessments.

360.2 The rules pertaining to supplemental assessments shall apply to supplemental assessments conducted on or after January 1, 1991.

History

• SOURCE: Final Rulemaking published at 40 DCR 8171 (November 19, 1993).

9 DCMR § 361 SUPPLEMENTAL ASSESSMENTS

361.1 In addition to annual assessments of real property, as provided in §§305 through 312, the Deputy Chief Financial Officer shall conduct supplemental assessments to determine the estimated market value of real property twice a year:

(a) Between January 1st and June 30th; and

(b) Between July 1st and December 31st.

361.2 The Deputy Chief Financial Officer shall conduct a supplemental assessment to estimate the market value of the following:

(a) Real property, if since the last annual or supplemental assessment, it was erroneously omitted from the previous assessment roll or tax list;

(b) Real property, if since the last annual or supplemental assessment, it was not listed on the previous assessment roll or tax list;

(c) Real property where there is a change in the estimated market value as a result of damage or destruction of an improvement since the last annual or supplemental assessment;

(d) Real property, if since the last annual or supplemental assessment, a new improvement was constructed and completed; and

(1) The estimated market value of the real property changed by one hundred thousand dollars ($100,000) or more as a result of the new improvement; or

(2) A certificate of occupancy was issued;

(e) Real property, if since the last annual or supplemental assessment, an addition to an existing improvement or renovation of an existing improvement was completed; and

(1) The estimated market value of the real property changed by one hundred thousand dollars ($100,000) or more as a result of the addition or renovation; or

(2) A certificate of occupancy was issued;

(f) Real property, if since the last annual or supplemental assessment, construction is in progress; and

(1) At least sixty-five percent (65%) of the total estimated construction of the overall base structure has occurred and the estimated market value of the real property changed by one hundred thousand dollars ($100,000) or more as a result of the new construction; or

(2) A certificate of occupancy was issued; and

(g) Real property, if since the last annual or supplemental assessment, a conversion has occurred; and

(1) The estimated market value of the real property changed by one hundred thousand dollars ($100,000) or more as a result of the conversion; or

(2) A certificate of occupancy was issued.

361.3 The Deputy Chief Financial Officer shall revise the assessment roll and tax list to reflect the changes in the assessed value of real property resulting from each supplemental assessment.

History

• SOURCE: Final Rulemaking published at 40 DCR 8171 (November 19, 1993).

9 DCMR § 362 DETERMINATION OF ASSESSED VALUE OF REAL PROPERTY WITH CONSTRUCTION IN PROGRESS

362.1 For construction in progress, sixty-five percent (65%) complete shall be based on how components of an improvement contribute to the overall base structure. A tenant finish is not a component of a structure that contributes to the overall base structure.

362.2 The following guide shall be used to estimate the percentage of completion for a single family detached residence:

PERCENTAGE OF COMPLETION

Percentage of total

Cumulative Percentage of total

Plans, permits and survey

2%

2%

Excavation, forms, water/sewage hookup

hookup

4

6

Concrete

8

14

Rough framing

21

35

Windows and exterior doors

2

37

Roof cover

3

40

Rough-in plumbing

4

44

Insulation

1

45

Rough-in electrical and mechanical

11

56

Exterior

6

62

Interior

8

70

Built-in cabinets, interior doors, trim, etc.

etc.

13

83

Plumbing

5

88

Floor covers

3

91

Built-in appliance

3

94

Light fixtures and finish hardware

2

96

Painting and decorating

4

100

100%

362.3 The following guide shall be used to estimate the percentage of completion for all other structures:

PERCENTAGE OF COMPLETION

Percentage of total

CumulativePercentage

of total

Plans, permits, and survey

2%

2%

Foundation

6

8

Slab and Frame

24

32

Exterior Walls

14

46

Roof

2

48

Electricity

5

53

Heat & Air Conditioning

15

68

Plumbing

9

77

Misc. Equip., Elevators, Etc.

2

79

Sprinklers

2

81

Interior Partitions (Studding),

Interior Finish (Lath) (Dry Wall)

(Plaster) (Tape), Carpentry & Millwork., Tiling, and Flooring

15

96

Paint

2

98

Landscape, Paving

2

100

100%

362.4 For renovations, additions that are not new structures, and other additions, the Deputy Chief Financial Officer may consider the taxpayer's submitted "Schedule of Costs" (FP 315) when determining the assessed value of the real property.

362.5 In determining the assessed value of real property where there is construction in progress and sixty-five percent (65%) of the total estimated construction is determined to be complete, the Deputy Chief Financial Officer may consider the "Schedule of Costs" (FP 315).

362.6 In considering the "Schedule of Costs," the Deputy Chief Financial Officer shall rely primarily on the Percentage of Completion Guides in §§ 362.2 and 362.3.

History

• SOURCE: Final Rulemaking published at 40 DCR 8171, 8173 (November 19, 1993).

9 DCMR § 363 INFORMATION TO BE PROVIDED BY THE OWNER OF REAL PROPERTY

363.1 Each owner of real property where there is construction of a new improvement, an addition to or renovation of an existing improvement, construction in progress, a conversion, or damage or destruction of an improvement shall submit the following information to the Deputy Chief Financial Officer for purposes of determining whether the property shall be assessed and the assessed value of the real property:

(a) All construction loan documents;

(b) Breakdown(s) of costs (including the detail of construction costs and the budget report-hard and soft costs);

(c) Project plans and schedules;

(d) Draw schedules (the actual costs as drawn from the construction loan);

(e) Insurance information;

(f) A copy of the certificate(s) of occupancy issued;

(g) Permit(s);

(h) Gross building area;

(i) Net rental area;

(j) Gross finish area;

(k) Developed floor area ratio (FAR);

(l) Below grade area (finished or unfinished);

(m) Building features and amenities (such as the number of sprinklers and elevators); and

(n) Other information the Deputy Chief Financial Officer deems necessary.

History

• SOURCE: Final Rulemaking published at 40 DCR 8171, 8174 (November 19, 1993).

9 DCMR § 364 INFORMATION TO BE PROVIDED BY OWNERS OF REAL PROPERTY WHERE A CONVERSION HAS OCCURRED

364.1 In addition to the information, documents, or forms required to be submitted pursuant to § 363, each owner of real property where a conversion has occurred shall submit to the Deputy Chief Financial Officer the following information, documents or forms for the purposes of determining the assessed value of the real property:

(a) A list of structural changes;

(b) Trust, mortgage or financing costs;

(c) Asking price of units or shares in a multi-family conversion;

(d) An appraisal of the converted real property; and

(e) Other information the Deputy Chief Financial Officer deems necessary.

364.2 Any information, document or forms required to be submitted pursuant to §§ 363 and 364, shall be mailed and postmarked or hand-delivered by close of business (4:45 p.m.) to the Office of Tax and Revenue, Real Property Tax Administration, 441 4th Street, N.W., One Judiciary Square, Washington, D.C. 20001, within thirty (30) days from the date the Office mails a written request for the information, document or form.

History

• SOURCE: Final Rulemaking published at 40 DCR 8171, 8175 (November 19, 1993).

9 DCMR § 365 NOTICE OF SUPPLEMENTAL ASSESSMENT TO THE REAL PROPERTY OWNER

365.1 The Deputy Chief Financial Officer shall notify each owner of real property by mail of the supplemental assessment of the owner's real property.

365.2 The notice shall include any change in the assessment and right of appeal.

365.3 Notices shall be mailed as soon as possible after July 1st but not later than August 1st for a supplemental assessment conducted between January 1st and June 30th; and after January 1st but not later than February 1st for a supplemental assessment conducted between July 1st, and December 31st.

History

• SOURCE: Final Rulemaking published at 40 DCR 8171, 8176 (November 19, 1993).

9 DCMR § 366 APPEALS

366.1 Notwithstanding §§ 2008.3 and 2008.4, any taxpayer who owns real property in the District of Columbia or the taxpayer's duly authorized representative, may appeal the amount of a supplemental assessment of the property pursuant to D.C. Code § 47-829 (1992 Suppl.) by filing a petition with the Board of Real Property Assessments and Appeals or its successor by:

(a) September 30th of the year in which the assessment is made for a supplemental assessment conducted between January 1st and June 30th; and

(b) March 31st of the following calendar year for a supplemental assessment conducted between July 1st and December 31st.

History

• SOURCE: Final Rulemaking published at 40 DCR 8171, 8176 (November 19, 1993).

9 DCMR § 367 REQUIREMENT TO FILE FORM BEFORE BENEFITING FROM TAXABLE ASSESSMENT AS A RESALE RESTRICTED PROPERTY

367.1 Residential real property that qualifies as “resale restricted properties,” as that phrase is defined under D.C. Official Code § 47-820.02, shall receive a benefit as determined under such statute.

367.2 Filing the applicable form devised by the DCFO shall be a means of providing notice to the DCFO that the real property is resale restricted.

367.3 The form shall be completed and filed before the benefit under D.C. Official Code § 47-820.02 may be received.

367.4 The benefit shall be effective beginning with the half tax year when the owner purchased the resale restricted real property, as determined by the date of the deed or the date the deed was acknowledged, whichever is later.

367.5 No benefit shall be received prior to the date the owner purchased the resale restricted real property or 3 years, whichever is sooner.

History

• SOURCE: Final Rulemaking published at 56 DCR 1811 (February 27, 2009).

9 DCMR § 368 DISCOUNT TAX SALE AND SALES TO D.C. OR NON-PROFITS

368.1 After successfully foreclosing the right of redemption in the Superior Court, and after having paid all taxes and liabilities becoming liens after the date specified in the public notice, a successful purchaser shall be awarded a tax deed to the respective real property purchased at a Discount Tax Sale held pursuant to D.C. Official Code § 47-1353(b). Upon issuance of the tax deed, the real property shall be free and clear of all prior taxes and liabilities owing by the real property to, inter alia, a District taxing agency.

368.2 Upon issuance of the tax deed regarding a real property sold under § 47-1353(a)(3), the real property shall be free and clear of all prior taxes and liabilities owing by the real property to, inter alia, a District taxing agency. The tax sale purchaser shall not be required to pay such prior taxes and liabilities to receive the tax deed.

History

• SOURCE: Final Rulemaking published at 63 DCR 5733 (April 15, 2016). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 368

9 DCMR § 370 ELECTRONIC FORMS

370.1 Effective December 7, 2020, any requests, information, applications, forms or documents required by this section to be received by OTR shall be electronically submitted as instructed on or before 11:59 PM of the due date, if applicable. This effective date may be extended by Emergency Rulemaking or by Notice by the Deputy Chief Financial Officer.

370.2 The requirement to submit requests, information, application, form or documents electronically shall apply to:

(a) BID Billing Adjustment;

(b) BID Billing File Submission;

(c) BID Certification of Tax Lien Debt;

(d) BID Account Maintenance Requests;

(e) BID Tax Adjustment and Penalty and Interest Waiver;

(f) Combination of A&T Lots;

(g) Combination of Condominium Lots;

(h) Cooperative Unit Homestead Application & Reconfirmation;

(i) Cooperative Unit Senior/Disabled Application & Reconfirmation;

(j) Division of A&T Lots;

(k) Division of Condominium Lots;

(l) Exempt Property Use Report;

(m) Exemption from Real Property Tax Application;

(n) Homeowner's Association (HOA) Trash Credit Benefit;

(o) Limited Equity Cooperative Tax Fairness Application;

(p) Mixed Use Application Form;

(q) PACE Account Closure Request;

(r) PACE Adjustment Request;

(s) PACE Property Add;

(t) PACE Property Remove;

(u) Payment Plan Request;

(v) Possessory Interest Account Closure Request;

(w) Property Key Payer Maintenance;

(x) Property Key Payer Payment Distribution;

(y) Property Key Payer Registration;

(z) Property Mailing Address Change;

(aa) Real Property Tax Penalty and Interest Waiver;

(bb) Real Property Tax Rebate Public Charter Schools/Lessees Other Than Public Schools;

(cc) Real Property Tax Refund Requests;

(dd) Restricted Resale Assessment;

(ee) Requests for Certificate of Taxes;

(ff) Requests for Cancellation of Certificate of Taxes;

(gg) Requests for Tax Deed Bills;

(hh) Tax Map Requests;

(ii) Tax Sale Assignees Compliance Certification;

(jj) Requests for Tax Sale Certificates of Redemption;

(kk) Tax Sale Foreclosure Complaint Notification;

(ll) Tax Sale Purchaser Change of Address;

(mm) Tax Sale Purchaser Registration;

(nn) Tax Sale Seminar Registration;

(oo) Tax Sale Subsequent Assignment;

(pp) Tax Sale Subsequent Payment Request

(qq) Homestead Deduction;

(rr) Senior Citizen Tax Relief; and

(ss) Disabled Property Tax Relief.

370.3 Notwithstanding the requirement to electronically submit application forms and attachments thereto for subsections (qq), (rr) and (ss) of Subsection 370.2, an applicant may seek a waiver by OTR of such electronic filing requirement, such waiver to be provided in the discretion of OTR.

History

• SOURCE: Final Rulemaking published at 67 DCR 11444 (October 2, 2020); as amended by Final Rulemaking published at 68 DCR 6174 (June 11, 2021). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 370

9 DCMR § 399 DEFINITIONS

399.1 The definitions in § 9903.1 of Chapter 99 of this title shall also apply to Chapter 3.

399.2 When used in this chapter, the following words and phrases shall have the meaning ascribed:

Arms Length Transaction - a transaction freely arrived at in the open market, unaffected by abnormal pressure or by the absence of a normal competitive negotiation as might be true in the case of a transaction between related parties.

Elderly Tenant - a tenant of a cooperative who is sixty-two (62) years of age or older at the time of conversion.

Gifts from Non-governmental Sources - shall not include any amounts received by a recipient who is required to perform some act or render some service as a condition for the receipt of the gift.

Intra-family transfers - transfers between and among a father, mother, husband, wife, children by blood or legally adopted children, or any other lineal descendant or lineal ancestor.

Lifetime Lease - a lease in which a person who occupies a unit in a housing accommodation that is converted into a cooperative automatically acquires a lifetime tenancy.

Limited Equity Cooperative - a cooperative housing association in which the governing documents limit the resale price of a stockholder or member's stock or proprietary interest to the sum of his or her basis for such stock or proprietary interest plus his or her proportionate share of the amortization of any mortgage on the real property owned by the cooperative. The resale price may be subject to adjustment based on the Consumer Price Index or comparable index.

Longterm Lease - a lease which meets the minimum length of time required under §204 of the Rental Housing Conversion and Sale Act of 1980, to qualify for reduction of conversion fees based on rentals to low income tenants.

Low-income Tenant - a tenant of a cooperative unit with a combined annual income totaling less than the median income determined by the United States Department of Housing and Urban Development and adjusted yearly by historic trends of that median, and as may be further adjusted by an interim census of District of Columbia incomes by local or regional government agencies.

Members of a Household - all individuals occupying a unit, whether or not they are related. For example, two (2) or more unrelated individuals sharing an apartment constitute the members of a household.

Nonreal Property Assets - tangible and intangible personal property.

Owner in Fee Simple - anyone who owns an estate which is absolute in respect to the rights of creditors and purchasers but subject to any future estates that may be limited thereon.

Qualified Ownership Interest - an undivided interest for more than fifty (50) years in the entire dwelling unit and appurtenant land being acquired in the transaction to which the shared equity financing agreement relates.

Shared Equity Financing Agreement - an agreement under which:

(a) Two (2) or more persons acquire qualified ownership interests in a dwelling unit; and

(b) The person (or persons) holding one (1) or more of such interests:

(1) Is entitled to occupy the dwelling unit for use as a principal residence; and

(2) Is required to pay rent to one (1) or more other persons holding qualified ownership interests in the dwelling unit.

Timely File - postmarked by the due date, if mailed. If the postmark is illegible, the person filing the document may be required to submit a duly notarized affidavit indicating timely mailing.

Type of Cooperative - the ownership of a cooperative whether it be stock or nonstock membership, and to whether there are restrictions on the profit realizable on resale of a cooperative interest, whether low-yield or limited yield.

Unit Exposure - the position of a unit in relation to the outside of the building, i.e., corner, front, back, side or inside.

Unit Mix - the types of dwelling units in a cooperative housing association, such as efficiency, one-bedroom, two-bedrooms. guest rooms, and commercial space.

399.3 The terms and phrases used in §§360 through 365 shall have the meanings set forth in this section unless the text or context of a particular chapter, section, subsection, or paragraph provides otherwise.

Construction in progress - the on-site building of an improvement or alteration of an improvement, whether it is a new improvement, an addition, or a renovation, including but not limited to, assembly and installation of components and, installation of equipment.

Conversion - one of the following:

(a) A change in the use of real property whether or not the change in use results in reclassification of the real property; or

(b) A change in the type of ownership of residential real property that results in a change of the residential use.

The following are some examples of change in the use of real property which shall constitute a conversion.

(a) Change from use as an apartment building to use as a hotel.

(b) Change from use as a warehouse to use as a residential condominium.

(c) Change from use as a store to use as a single family dwelling.

The following are some examples of a change in the type of ownership of residential property, resulting in a change in the use, which shall constitute a conversion.

(a) Change from use as a rental apartment building to use as a cooperative.

(b) Change from use as a rental apartment building to use as a condominium. For example, if real property is converted from apartment use to condominium use and the total value of the original real property (not each new condominium unit) increases by one hundred thousand dollars ($100,000), the new value may be assessed on a supplemental basis.

Improvement - a building or any other relatively permanent structure or development located on or attached to real property. It shall include any equipment that is used for commercial purposes and that is permanently attached to the real property so as to make the land otherwise unbuildable, e.g. storage tanks, railroad tracks and transmittal towers. The term "improvement" shall not include fences, residential storage sheds or other similar structures, or brick, or stone walls.

Overall base structure - the supporting structure, including the exterior walls, interior finish, and lighting, heating, plumbing, and mechanical components. Interior finish shall not include tenant finish.

Real property erroneously omitted from the assessment roll or tax list - all real property which escaped assessment and placement on the assessment roll or tax list and should have been assessed and on the assessment roll or tax list.

Real property not listed on the previous assessment roll or tax list - all real property which was not listed on the previous assessment roll or tax list.

Tenant finish - any alteration, enhancement, or renovation of an improvement made by a tenant or lessee, made according to the tenant's or lessee's specifications, or made for a tenant or lessee which subsequently becomes a part of the improvement, whether or not such alteration, enhancement, or renovation is changed for or by the tenant or lessee or a subsequent tenant or lessee, such as, one of the following:

(a) A drop ceiling;

(b) A partition;

(c) Dry wall;

(d) Carpeting;

(e) A fixture;

(f) A kitchenette; or

(g) Wood paneling.

History

• SOURCE: Regulation No. 74-35 effective December 12, 1974, 24 DCR 1643 (January 20, 1975); Final Rulemaking published at 36 DCR 5940, 5944 (August 18, 1989); by Final Rulemaking published at 36 DCR 5128, 5132 (August 3, 1990); and by Final Rulemaking published at 40 DCR 8171, 8177 (November 19, 1993).

9-4 SALES AND USE TAXES

9 DCMR § 400 GENERAL PROVISIONS

400.1 The District Sales Tax Act (D.C. Code §§ 47-2001 et seq.), as amended (which is referred to in this chapter as the "Act"), imposes a tax upon every vendor in the District selling certain tangible personal property at retail and selling certain selected services defined as selling at retail.

400.2 The tax is at the rates set forth in § 125 of the Act (D.C. Code § 47-2002) upon the entire gross receipts from taxable sales, as defined in the Act.

400.3 For the purposes of this chapter, the words, terms, and phrases defined in the Act shall have the same meanings when used in this chapter, unless otherwise required by the context of this chapter.

400.4 The provisions of this chapter (so far as applicable and with changes that are necessarily implied) are applicable to the Compensating Use Tax (See: D.C. Code §§ 47-2201 et seq.).

400.5 When used in this chapter, the term "Deputy Chief Financial Officer" shall mean the Deputy Chief Financial Officer of the Office of Tax and Revenue ("Office"), or his or her lawfully appointed agent, representative, or designee, and shall include the terms "Assessor" and "Collector" as used in the Act or prior rules and regulations.

400.6 When the due date for filing a return or paying a tax under the Act or this chapter falls on a Saturday, Sunday, or legal holiday, the last date for filing the return or paying the tax shall be the first business day following that Saturday, Sunday, or legal holiday.

400.7 Effective January 1, 1982, the District shall use a tax return system which is similar to the federal depository system for filing and payment of sales and use taxes.

History

• AUTHORITY: Unless otherwise noted, the authority for this chapter is § 143 of the District of Columbia Revenue Act of 1949, 63 Stat. 121, D.C. Code §§ 47-2001 et seq., as amended (1981 Ed.).
• SOURCE: Commissioners' Order 54-1415, 1 DCR 4 (July 19, 1954).
• EDITOR'S NOTE: The Office of the Chief Financial Officer of the District of Columbia published a Notice of Public Interest at 44 DCR 2345 (April 18, 1997) changing the name of the "Department of Finance and Revenue" to the "Office of Tax and Revenue."

9 DCMR § 401 PERSONS FURNISHING NON-TAXABLE SERVICES

401.1 Persons who furnish a nontaxable service are considered consumers of all materials and supplies purchased to operate that business.

401.2 Persons who furnish non-taxable services must reimburse the vendors from whom they purchase materials and supplies for the sales tax.

History

• SOURCE: Commissioners' Order 54-1415, 1 DCR 4 (July 19, 1954).

9 DCMR § 402 CASUAL AND ISOLATED SALES

402.1 Casual and isolated sales within the exemption provided by D.C. Code § 47-2005(7) are limited to sales of a non-recurring nature that are made by a vendor who is not regularly engaged in the business of making sales at retail. The casual and isolated sale exemption does not apply to any of the following sales:

(a) Sales by a vendor who is registered with the Office of Tax and Revenue for a sales and use tax account;

(b) Sales by a vendor who is regularly engaged in the business of making sales at retail regardless of whether the property being disposed was originally acquired for use or consumption by that vendor;

(c) Sales made on a marketplace as defined in 47-2002(g-4); or

(d) A sale of the entire operating assets of a business or of a separate division, branch, or identifiable segment of a business where the sale is by a vendor who is regularly engaged in the business of making sales at retail.

402.2 Examples of casual and isolated sales include, but are not limited to, the following:

(a) An individual selling a piece of household furniture;

(b) A law firm selling a set of law books; or

(c) A church selling a pipe organ or pews for which it has no further use.

402.3 Examples of sales that are not eligible for the casual and isolated sale exemption include, but are not limited to, the following:

(a) A bookstore selling bookshelves;

(b) A restaurant selling a stove;

(c) An individual selling a piece of household furniture on a marketplace; or

(d) A restaurant or hotel selling its tangible personal property in a total asset sale in liquidation or business sale.

402.4 Except for the first 5 charity auctions or other fundraising events during a calendar year conducted by a nonprofit teaching hospital, the gross receipts from the sales of food, meals, greeting cards, magazine subscriptions, novelties, toys, jewelry, wearing apparel, household appliances, seasonal or holiday decorations, plants and other items purchased or acquired by semipublic institutions (such as churches, religious, scientific, and educational organizations or institutions) and by social, fraternal, and benevolent organizations and other organizations or institutions of a similar nature, for the purpose of resale at planned or organized functions, affairs, or campaigns (such as auctions, bazaars, luncheons, dinners, suppers, antique shows, rummage sales, house-to-house campaigns, fundraising events and similar activities) are not considered to be casual and isolated sales and are subject to District sales tax.

History

• SOURCE: Administrative Ruling No. 2, 16 DCRR; as amended by Final Rulemaking published at 68 DCR 5317 (May 14, 2021). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 402

9 DCMR § 403 INCONSEQUENTIAL ELEMENTS

403.1 The Act exempts from the tax the gross receipts from professional, insurance or personal service transactions which involve sales of tangible personal property as inconsequential elements and where no separate charges for such sales of tangible personal property are made.

403.2 The phrase "sales as inconsequential elements" shall be deemed to include any sales of tangible personal property made in connection with professional, insurance, or personal service transactions where the sales price of the tangible personal property is less than ten percent (10%) of the amount charged for the services rendered in the transaction.

403.3 Gross receipts exempted under this section shall not include the gross receipts from services taxable under § 114(a) of the Act, regardless of whether tangible personal property is involved in rendering the service.

History

• SOURCE: Commissioners' Order 54-1415, 1 DCR 4 (July 19, 1954); as amended by Commissioners' Order 56-890, approved May 9, 1956, 2 DCR 304 (May 21, 1956); and by the Third Amendment to the Revenue Act of 1975 Act, D.C. Law 1-61, 22 DCR 4383, 4384 (February 12, 1976).

9 DCMR § 404 INTERSTATE COMMERCE

404.1 The sales tax shall be applicable to the receipts from all sales even though the property sold and delivered in the District is for exclusive use in interstate commerce.

404.2 Receipts from the sale of tangible personal property for use in conducting a business which constitutes interstate commerce shall not be exempt from the tax solely by reason of that fact.

404.3 Receipts from the sale of tangible personal property in the District shall not be exempt by reason of the fact that the vendor delivered the property from outside the District, if the facts and circumstances indicate that the contract of sale would not require, contemplate, or necessarily involve the shipment of goods from outside the District.

404.4 If a registered vendor in the District undertakes to and does, in fact, deliver the property sold to the purchaser outside the District, and consideration for that delivery is included in the sales price as part of the retail sale, the gross receipts from the sale are exempt from the tax unless the property sold is for use, storage, or consumption in the District.

404.5 If a registered vendor in the District undertakes to, and does in fact, deliver the property sold to a resident of the District to a place outside the District and that property is returned to the District by the purchaser, the purchaser shall be liable for a use tax on the purchase price of the property.

404.6 If a registered vendor in the District which has no subsidiary or agent; or office, branch, place of distribution, sample room, or sales place; or warehouse or storage place; or other place of business outside the District undertakes to, and does in fact, deliver the property sold to a place outside the District under circumstances other than those set forth in § 404.4 or 404.5, the question of whether that vendor is subject to the sales tax upon the gross receipts from the sale must be resolved by a determination of whether or not the sale was in fact an interstate transaction.

404.7 Among the criteria for determining whether a transaction was an interstate transaction for the purposes of § 404.6, are the following:

(a) Whether the vendor was licensed to engage in business in the jurisdiction to which the property was delivered by that vendor;

(b) Whether the vendor had, in connection with the business, during the taxable period, filed any liens, chattel mortgages, or additional sales contracts in the jurisdiction to which the property was delivered by that vendor;

(c) Whether the sale was C.O.D. at the place outside the District to which the property was delivered by the vendor;

(d) Whether the property was actually delivered by the vendor in its own equipment or was delivered through a common, private, or contract carrier paid by the vendor; and

(e) Whether payment for the property sold was made by the purchaser at the place of business of the vendor within the District.

History

• SOURCE: Commissioners' Order 54-1415, 1 DCR 4 (July 19, 1954).

9 DCMR § 405 STORAGE, USE, OR CONSUMPTION OF PROPERTY IN THE DISTRICT BY A PURCHASER

405.1 If tangible personal property is purchased (in the District or outside the District) by any person for the purpose of storage, use, or consumption of that property within the District, the purchase is subject to the use tax, based upon its sales price.

405.2 If tangible personal property is purchased within the District and delivery of the property to the purchaser occurs in the District, the D.C. sales tax must be paid, even if the property is subsequently stored, used, or consumed outside the District.

405.3 The provisions of this section do not apply to sales which are exempt from the payment of District sales tax or compensating use tax under the provisions of the Act and this chapter.

405.4 The actual storage, use, or consumption of tangible personal property within the District shall be prima facie evidence that the property was purchased for that purpose.

405.5 If the purchaser claims that the purpose for which the property was purchased was not to store, use, or consume the property within the District, the purchaser shall establish that fact to the satisfaction of the Deputy Chief Financial Officer.

405.6 If any property has been stored, used, or consumed within the District, the following factors shall not be controlling upon the question of taxability:

(a) The duration of the storage, use, or consumption; or

(b) The fact that the property subsequently has been removed from the District.

405.7 If tangible personal property has been purchased outside the District and delivered to the purchaser outside the District, and a sales or use tax on the sale of the property has been properly paid to another jurisdiction, the property is exempt from the District use tax, except as provided in §§ 405.8 and 405.9.

405.8 If property purchased and delivered outside the District is brought into the District, and if the purchaser is entitled to claim a refund of the sales or use tax paid to the other jurisdiction upon removal of the property from the other jurisdiction, the District use tax shall be applicable to the purchase price of the property in accordance with the provisions of § 405.9.

405.9 If the District use tax is applicable to the property purchased and delivered outside of the District, it shall be paid to the District when the property is brought into the District for use, storage, or consumption, whether or not a refund is actually obtained from the other jurisdiction.

405.10 To determine whether property purchased outside the District for storage inside the District is subject to the District use tax, it shall be ascertained whether, at the time of purchase and storage, the property was acquired for use or consumption within or without the District.

405.11 If the purpose at the time of purchase and storage of the property in the District is to use or consume it inside the District, the purchase shall be taxable under the Use Tax Act. Under these circumstances the tax shall apply whether the article is actually used or consumed in the District or subsequently shipped out of the District.

405.12 If, at the time of purchase, the purpose in storing the article in the District is to use or consume the article outside the District, the purchase shall not be subject to the Use Tax; Provided, that the following facts must subsequently be established:

(a) The article is never used or consumed inside the District; and

(b) The article is actually shipped outside the District and used or consumed outside the District.

405.13 Since non-taxability cannot be established until the article is actually shipped out of the District for use or consumption outside the District, the Use Tax must be paid when the article first arrives in the District.

405.14 A purchaser may claim a credit or refund for the use tax paid on the portion of the personal property which the taxpayer satisfies the Office was purchased initially solely for use or consumption outside the District, if the purchaser can substantiate by adequate and acceptable records the following:

(a) The date of purchase of the item(s);

(b) The purchase price of the item(s) and the amount of tax paid; and

(c) The facts required by §§ 405.12(a) and 405.12(b).

405.15 A claim for credit or refund shall be filed with the Office within a period of one (1) year (See D.C. Code §§ 47-2020 and 47-2213).

405.16 If tangible personal property is purchased outside the District and delivered to the purchaser in the District, the District Use Tax shall be paid on all such property used, stored, or consumed within the District. However, where such property is purchased for purposes of use or consumption outside the District, stored in the District, and is later removed for use or consumption outside the District, a refund or tax may be claimed within one year from the date the tax was paid thereon in accordance with § 140(a) of the District Sales and Use Tax Acts. Claim for refund or credit must be filed on form FR-331.

History

• SOURCE: Commissioners' Order 54-1415, 1 DCR 4 (July 19. 1954): as amended by Commissioners' Order 62-481 effective March 20, 1962, 8 DCR 225 (April 2, 1962).

9 DCMR § 406 SALES PRICE: CASH DISCOUNTS

406.1 In addition to the provisions of the Act, (D.C. Code § 47-2001(p)(2)), the term "sales price," as used in the Act, shall not include any of the exceptions set forth in this section.

406.2 For the purposes of D.C. Code § 47-2001(p)(2)(A), if a vendor quotes to a purchaser a list price with a deduction from that price for a trade discount, the tax shall be computed on the list price less the trade discount.

406.3 A trade discount shall be an expedient for adjusting a list price and is to be deducted in arriving at the true selling price of the property.

406.4 A quantity discount is a trade discount allowed where purchases equal or exceed a predetermined amount and may be excluded from the selling price only when allowed currently.

406.5 No credit or refund may be claimed where quantity discounts are allowed subsequent to the sale to which the discount is applicable.

406.6 If tangible personal property shall be sold subject to a discount for payment within a limited time, the tax applies to the total selling price of the property without any allowance for the discount.

406.7 In the case of cash sales where the discount is deducted from the selling price and the net amount due on the sale is paid at the time of sale, the sales price shall not include the discount.

History

• SOURCE: Commissioners' Order 54-1415. 1 DCR 4 (July 19, 1954)

9 DCMR § 407 SALES PRICE: LABOR OR SERVICES

407.1 In addition to the provisions of the Act (D.C. Code § 47-2001(p)(2)), the term "sales price," as used in the Act, shall not include any of the exceptions set forth in this section.

407.2 For the purposes of D.C. Code § 47-2001(p)(2)(C), the amount charged for labor or services rendered in installing or applying the property sold shall not be subject to the tax if both of the following conditions are met:

(a) The charges for installation must be shown separately from the sales price of the property; and

(b) The property must not have been applied or installed as a repair or replacement part of other tangible personal property.

407.3 If labor and service charges and sales price are not shown separately, the tax applies to the total amount received from the sale of property and installation charges.

History

• SOURCE: Commissioners' Order 54-1415, 1 DCR 4 (July 19, 1954).

9 DCMR § 408 SALES PRICE: TAXES, INTEREST, AND OTHER CHARGES

408.1 In addition to the provisions of the Act (D.C. Code § 47-2001(p)(2)), the term "sales price," as used in the Act, shall not include any of the exceptions set forth in this section.

408.2 The amount of reimbursement of taxes paid by the purchaser to the vendor under the Act shall not be subject to the tax if the reimbursement amount is stated separately from the sales price.

408.3 The amount of federal retailer's excise taxes, if any, shall not be subject to the tax if the federal retailer's excise taxes are stated separately from the sales price.

408.4 The amount paid by any purchaser as interest, finance charge, or carrying charge shall not be subject to the tax if the amount of interest, finance charge, or carrying charge is stated separately from the amount paid for the tangible personal property or services.

History

• SOURCE: Commissioners' Order 54-1415, 1 DCR 4 (July 19, 1954); as amended by Commissioners' Order 56-890, approved May 9, 1956, 2 DCR 304 (May 21, 1956).

9 DCMR § 409 INSTALLMENT, LAY-AWAY, AND OTHER CREDIT OR DEFERRED PAYMENT SALES

409.1 A vendor making any sale on credit shall report the total sale price of the property sold on the return covering the month in which the sale was made and pay the tax on the sale.

409.2 The term "sale on credit" includes, but is not limited to, the following:

(a) A conditional sale;

(b) An installment sale; and

(c) Any other deferred payment sale.

409.3 If a sale is made on credit, lay-away, budget plan, or other deferred payment plan, the gross sales price becomes taxable when the sale, agreement or other arrangement for transfer of the property from the vendor to the purchaser is made. The vendor shall collect reimbursement for the tax on the total sales price at the time the first payment is made by the purchaser.

409.4 If the purchaser returns the property to the vendor upon recision of the contract of sale within ninety (90) days of the date of sale and the vendor allows the purchaser credit or cash on the full amount of the sales price charged for the property (including the sales tax reimbursement), the vendor is entitled to a refund of the tax paid; Provided, that the vendor files an application for refund under oath with the Deputy Chief Financial Officer within three (3) years from the date of payment.

409.5 No deduction or refund will be allowed if any property sold on credit is repossessed by the seller or the seller's agent, representative, or assignee.

History

• SOURCE: Commissioners' Order 54-1415, 1 DCR 4 (July 19, 1954); as amended by Commissioners' Order 56-346 approved February 16, 1956, 16 DCR 211 (February 27, 1956); and by Final Rulemaking published at 30 DCR 1922, 1926 (April 29, 1983).

9 DCMR § 410 BAD DEBTS AND DISCOUNTS ON SALES OF ACCOUNTS RECEIVABLE

410.1 The District sales tax is required to be reported and paid to the District on the basis of the full amount of the sale price of all property subject to tax.

410.2 Neither the amount of tax required to be reported and paid, nor the time for filing a return or paying the tax to the District is affected by the fact that sales were made on credit or on a deferred payment plan, or by the fact that the accounts receivable may subsequently prove to be uncollectible in whole or in part.

410.3 If a vendor sells or assigns its accounts receivable at a discount, those discounts may not be used to reduce the amount on which the tax is required to be paid, or to obtain a credit or refund.

410.4 A deduction shall be allowed from the gross receipts required to be reported in a tax return for any portion of any accounts that are or may prove to be uncollectible; Provided, that any amount so deducted which may thereafter be collected shall be included without a reduction for collection expense in the first return after such collection.

History

• SOURCE: Administrative Ruling No. 16, 16 DCRR; as amended by Final Rulemaking published at 30 DCR 1922, 1926 (April 29, 1983).

9 DCMR § 411 TAXABLE SERVICES UNDER CONTRACT PRIOR TO JULY 1, 1989

411.1 Each vendor who sells tangible personal property or provides services pursuant to a lump sum contract entered into prior to July 1, 1989, in which the taxable sales of property or services are included in the price of the contract with nontaxable sales or services, may allocate the taxable and nontaxable values in the contract according to the market value of the services or property provided.

411.2 This permission to allocate is not intended to limit the property or services subject to taxation; nor is it intended to authorize any expense deductions that may be part of the selling price of the property or services. This permission to allocate shall only apply to services that became subject to sales and use tax pursuant to the Revenue Amendment Act of 1989.

411.3 The Deputy Chief Financial Officer may request copies of contracts and other documentation to support an allocation made pursuant to § 411.1.

411.4 The Deputy Chief Financial Officer is authorized to disallow an allocation made under § 411.1, if it appears that the allocation does not fairly reflect the market value of the services or property provided.

411.5 If a vendor does not submit documentation in response to a request by the Deputy Chief Financial Officer, or if the Deputy Chief Financial Officer determines the allocation to be improper, the Deputy Chief Financial Officer may presume the full value of the contract is subject to the sales tax.

411.6 Service contracts entered into prior to July 1, 1989, and paid in full before July 1, 1989, shall not be subject to the tax.

411.7 Contracts for services performed and completed prior to July 1, 1989, but billed according to the terms of the contract on or after July 1, 1989, shall not be subject to the tax.

411.8 Service contracts entered into prior to July 1, 1989, where no services were performed before July 1, 1989, and where services were paid for when the contract was completed after July 1, 1989, shall be subject to the tax.

411.9 Service contracts entered into prior to July 1, 1989, where services were performed both before and after July 1, 1989, and where services were paid for when the contract was completed after July 1, 1989, shall be subject to the tax on the entire charge.

History

• SOURCE: Commissioners' Order 54-1415, 1 DCR 4 (July 19, 1954) as amended by Final Rulemaking published at 36 DCR 8057 (November 24, 1989).

9 DCMR § 412 COLLECTION OF SALES TAX BY VENDORS

412.1 The reimbursement for the tax to be collected by the vendor from the purchaser shall be stated separately from the sales price of the property sold or services rendered.

412.2 In the case of a vendor not engaged in business in the District who makes sales at retail and who has been expressly authorized to pay the tax imposed by this title, that vendor shall, at the time of making such sales, collect reimbursement for the tax from the purchaser and give to the purchaser a receipt which shows separately the sales price of the property sold or service rendered and the reimbursement for the tax.

412.3 If a vendor collects reimbursement for the tax from the purchaser in excess of the amounts prescribed in § 413, or if the vendor collects reimbursement for the tax on any exempt or non-taxable sale or charge, the vendor shall make a refund or credit to the purchaser for the amount of the overcharge.

412.4 To the extent that each overcharge has not been refunded or credited to the purchaser, it shall be paid to the District in the same manner and at the same time as the tax required to be paid by the provisions of the Act (D.C. Code § 47-2016).

412.5 The gross receipts from any sales covered by § 414 shall be excluded from the total gross receipts of the seller making such sales and the seller shall neither collect nor add any reimbursement for tax to the consideration charged for such retail sales.

History

• SOURCE: Commissioners' Order 54-1415. 1 DCR 4 (July 19, 1954); as amended by Commissioners' Order 70-114 effective March 26, 1970, Regulation No. 70-11 effective March 26, 1970, 16 DCR 387 (April 20, 1970).

9 DCMR § 413 AMOUNT OF SALES TAX COLLECTION BY VENDORS

413.1 If the gross receipts from any sale are exempt from the tax, the vendor shall not collect reimbursement for any tax from the purchaser.

413.2 If a sale is subject to the tax, the vendor shall add to the sales price and collect reimbursement for the tax from the purchaser in the amounts set forth in §§ 413.3 through 413.8.

413.3 For each sale or charge subject to the sales tax at the two percent (2%) rate, a vendor shall collect the following reimbursement:

Range of Sale Price or Charge

Amount of Reimbursement

(a)

1¢ to 12¢

Nothing

(b)

13¢ to 62¢

1¢

(c)

63¢ to $ 1.12

2¢

(d)

For each additional 50¢ of sales price, or fraction of 50¢ of sales price

An additional 1¢

413.4 For each sale or charge subject to the sales tax at the five percent (5%) rate, a vendor shall collect the following reimbursement:

Range of Sale Price or Charge

Amount of Reimbursement

(a)

1¢ to 12¢

Nothing

(b)

13¢ to 24¢

1¢

(c)

25¢ to 44¢

2¢

(d)

45¢ to 64¢

3¢

(e)

65¢ to 84¢

4¢

(f)

85¢ to $ 1.12

5¢

(g)

More than $ 1.12

5¢

on each dollar or any multiple of a dollar PLUS the amount due on any additional fraction of a dollar based on (a)-(f)

413.5 For each sale or charge subject to the sales tax at the six percent (6%) rate, the vendor shall collect the following reimbursement: (cents are expressed in decimals of a dollar)

Range of Sale Price or Charge

Tax

(a)

.09 to .24

01

(b)

.25 to .41

02

(c)

.42 to .58

03

(d)

.59 to .74

04

(e)

.75 to .91

05

(f)

.92 to 1.08

06

(g)

For amounts over one dollar and eight cents ($ 1.08), compute the tax based on six cents (6¢) on each dollar or multiple of a dollar plus the amount due on any additional fraction of a dollar based on (a)-(f) of this section.

413.6 For each sale or charge subject to the sales tax at the nine percent (9%) rate, the vendor shall collect the following reimbursement: (cents are expressed in decimals of a dollar)

Range of Sale Price or Charge

Tax

(a)

.06 to .16

01

(b)

.17 to .27

02

(c)

.28 to .38

03

(d)

.39 to .49

04

(e)

.50 to .61

05

(f)

.62 to .72

06

(g)

.73 to .83

07

(h)

.84 to .94

08

(i)

.95 to 1.05

09

(j)

For amounts over one dollar and five cents ($ 1.05), compute the tax based on nine cents (9¢) on each dollar or multiple of a dollar plus the amount due on any additional fraction of a dollar based on (a)-(i) of § 413.6.

413.7 For each sale or charge subject to the sales tax at the twelve percent (12%) rate, the vendor shall collect the following reimbursement: (cents are expressed in decimals of a dollar)

Range of Sale Price or Charge

Tax

(a)

.05 to .12

.01

(b)

.13 to .20

.02

(c)

.21 to .29

.03

(d)

.30 to .37

.04

(e)

.38 to .45

.05

(f)

.46 to .54

.06

(g)

.55 to .62

.07

(h)

.63 to .70

.08

(i)

.71 to .79

.09

(j)

.80 to .87

.10

(k)

.88 to .95

.11

(l)

.96 to 1.04

.12

(m)

For amounts over one dollar and four cents ($1.04), compute the tax based on twelve cents (12¢) on each dollar or multiple of a dollar plus the amount due on any additional fraction of a dollar based on (a)-(l) of § 413.7.

413.8 For each sale or charge subject to the sales tax at the eleven percent (11%) rate, the vendor shall collect the following reimbursement: (cents are expressed in decimals of a dollar)

Range of Sale Price or Charge

Tax

(a)

.05 to .13

.01

(b)

.14 to .22

.02

(c)

.23 to .31

.03

(d)

.32 to .40

.04

(e)

.41 to .49

.05

(f)

.50 to .59

.06

(g)

.60 to .68

.07

(h)

.69 to .77

.08

(i)

.78 to .86

.09

(j)

.87 to .95

.10

(k)

.96 to 1.04

.11

(l)

For amounts over one dollar and four cents ($1.04), compute the tax based on eleven cents (11¢) on each dollar or multiple of a dollar plus the amount due on any additional fraction of a dollar based on (a)-(k) of this section.

413.9 [Deleted] 36 DCR 4600a, 4600c (June 30, 1989).

History

• SOURCE: Commissioners' Order 54-1415, 1 DCR 4 (July 19, 1954); as amended by Commissioners' Order 62-481 effective March 20, 1962, 8 DCR 225 (April 2, 1962); as amended by Commissioners' Order 66-1674 effective October 27, 1966, 13 DCR 101 (November 7, 1966); by Commissioners' Order 68-551a effective August 15, 1968, Council Regulation 68-19 effective August 15, 1968, 15 DCR 69 (October 7, 1968); by Commissioners' Order 69-688 effective December 12, 1969, Council Regulation 69-60 effective December 31, 1969, 16 DCR 295 (February 9, 1970); by Council Regulation 72-26 effective November 30, 1972, 19 DCR 408 (December 11, 1972); D.C. Law 1-61, 22 DCR 4583, 4584 (February 12, 1976); by Final Rulemaking published at 27 DCR 4929 (November 7, 1980), incorporating text of Proposed Rulemaking published at 27 DCR 3347, 3355 (August 1, 1980); and by Final Rulemaking published at 36 DCR 4600a (June 30, 1989).

9 DCMR § 414 PURCHASES FOR RESALE

414.1 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 takes in good faith a certificate from the purchaser that the property is purchased for resale.

414.2 As of November 1, 2017, for the purposes of determining sales for resale, the Deputy Chief Financial Officer shall only recognize 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 the Office of Tax and Revenue at its website mytax.dc.gov.

414.3 As of November 1, 2017, an authorized resale certificate shall be valid only for a period of one year and shall include an expiration date. Resale certificates shall be valid only until the expiration date stated on the certificate.

414.4 A certificate of resale is only valid if it contains the purchaser’s District of Columbia Sales and Use Tax Registration Number.

414.5 A purchase is for resale in the following circumstances:

(a) The person purchases tangible personal property or taxable services for the purpose of resale or rental in the same form;

(b) The person purchases tangible personal property or taxable services to incorporate as an attachment to, or as a material part of other tangible personal property to be produced for sale or rental by manufacturing, assembling, processing, or refining; or

(c) The person purchases taxable services to use or incorporate in the same form as a material part of other services to be provided for sale or rental.

414.6 A vendor shall refuse to accept a resale certificate for property and taxable services which he knows or should know is not for resale. Vendors are expected to exercise reasonable judgment in accepting resale certificates in good faith and will not be protected from paying sales tax on the items purchased with resale certificates that are not for resale if they fail to do so.

414.7 If all of a person's purchases of tangible personal property or taxable services from a vendor are for resale (fall within any of the circumstances described in Subsection 414.4), the vendor may accept a blanket certificate of resale from the person.

414.8 Each certificate of resale shall be maintained by the vendor and shall be authority for the vendor not to add reimbursement for the sales tax to the sales price of the property or service.

414.9 Certificates of resale which are canceled in accordance with the provisions of the Act and this chapter are void as of the date of cancellation.

414.10 If a person purchases tangible personal property or services for purposes other than those enumerated in the certificate of resale, the person cannot use a certificate of resale to exempt the purchase from the tax. The purchaser must reimburse the vendor for the sales tax or file a return and pay use tax on the purchase.

414.11 Any vendor who purchases tangible personal property or services under a certificate of resale, who then gives away such tangible personal property or services for no consideration, will be considered to be the consumer or user of the tangible personal property or services. As such, the retailer must reimburse the vendor for the sales tax or file a return and pay the tax as a consumer or user under the use tax, as the case may be.

History

• SOURCE: Commissioners' Order 54-1415, 1 DCR 4 (July 19, 1954); as amended by Final Rulemaking 64 DCR 11506 (November 3, 2017). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 414

9 DCMR § 415 CERTIFICATES OF REGISTRATION

415.1 Each vendor engaged in the business of making any retail sales subject to tax under the Act (including manufacturers, wholesalers, jobbers, and others), and every person purchasing tangible personal property for resale or for any other nontaxable purposes shall file with the Deputy Chief Financial Officer an application for a certificate of registration.

415.2 Each vendor or purchaser shall file an application for a certificate of registration before commencing business or opening a new place of business.

415.3 Certificates of registration shall be issued without charge by the Deputy Chief Financial Officer.

415.4 The failure to issue or secure a certificate shall not relieve any vendor or purchaser from the duty of paying the tax imposed by the Act or collection from the purchaser the reimbursement for the tax.

415.5 A person not engaging in business in the District but who makes purchases from wholesalers, distributors, dealers, retailers, or any other person(s) in the District for the purpose of resale, shall be entitled to register under the District Sales and Use Tax Acts.

415.6 Certificates are non-transferable under the Act (D.C. Code § 47-2026) and shall be surrendered immediately to the Deputy Chief Financial Officer when the vendor ceases to do business at the place named in the certificate.

415.7 The Deputy Chief Financial Officer may, after notice given in accordance with § 151 of the Act, cancel any certificate of registration issued under this section for failure of the registrant to comply with any of the provisions of the law or this chapter.

History

• SOURCE: Commissioners' Order 54-1415, 1 DCR 4 (July 19, 1954); as amended by Commissioners' Order 56-890 approved May 9. 1956, 2 DCR 304 (May 21, 1956).

9 DCMR § 416 UNLAWFUL ADVERTISING

416.1 It shall be unlawful for any vendor to advertise, hold out, or state to the public or to any customer, directly or indirectly, that the reimbursement for the tax or any part of the tax to be collected by the vendor under this chapter will be assumed or absorbed by the vendor.

416.2 It shall be unlawful for any vendor to advertise, hold out, or state to the public or to any customer, directly or indirectly, that the reimbursement for the tax or any part of the tax to be collected by the vendor under this chapter will not be added to the selling price of the property sold or the taxable services rendered; or if added to the sales price, that the tax (or any part of it) will be refunded.

416.3 Any person violating any provision of this section shall, upon conviction, be fined not more than five hundred dollars ($ 500) or imprisoned for not more than six (6) months, or both, for each offense.

History

• SOURCE: Commissioners' Order 54-1415, 1 DCR 4 (July 19, 1954).

9 DCMR § 417 CERTIFICATES OF EXEMPTION

417.1 All sales of tangible personal property or of taxable services are presumed not to be exempt from sales and use tax. 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.

417.2 Vendors shall exercise reasonable judgment in accepting exemption certificates in good faith and shall not be protected from paying sales tax on the items purchased with exemption certificates that are not exempt from tax if they fail to do so. Accepting an expired exemption certificate demonstrates bad faith by a vendor.

417.3 If the purchaser is the United States, the District of Columbia, or any instrumentality of either, the vendor shall show on the record of sale the instrumentality or agency to which the sale was made, the amount of the sale, and date of the sale.

417.4 If a purchaser of tangible personal property is a member of a foreign diplomatic corps and personally presents an identification card issued to that purchaser by the State Department, exempting the person from excise taxes, the card shall be authority for the vendor not to add reimbursement for the sales tax to the sales price of the property; Provided, that the vendor shall show on the record of each sale the name of the purchaser, the date of sale, the amount of the sale, and the State Department identification card number.

417.5 A certificate of exemption shall be effective on the date of issuance. No person shall be issued a refund, based upon a certificate of exemption, for sales taxes paid prior to the date of issuance of the certificate of exemption.

417.6 Each certificate of exemption shall be maintained by the vendor and shall be authority for the vendor not to add reimbursement for the sales tax to the sales price of the property or service. A vendor shall also maintain a record of the name of the purchaser, the date of each sale, and the amount of the sale for each exempt sale.

417.7 A vendor has ninety (90) days from the date requested in which to deliver the certificates of exemption to the Office of Tax and Revenue. Exemptions claimed by those certificates acquired during this 90-day period shall be subject to independent verification by the Office of Tax and Revenue before the deductions shall be allowed. Certificates delivered after the 90-day period shall not be accepted.

417.8 Exemption certificates are nontransferable and are valid for use only by the person or entity to which the certificate has been issued.

417.9 Exemption Certificate for Semipublic Institutions.

A semipublic institution purchasing property at retail for its own maintenance and operation shall obtain from the Deputy Chief Financial Officer a certificate of exemption stating that the institution is entitled to the exemption. If the semipublic institution does not present the certificate of exemption to the vendor, the vendor shall collect the reimbursement for the tax.

Beginning with exemption certificates issued after November 1, 2017, exemption certificates issued to semipublic institutions, except as provided in Subsection 417.9(c), shall be valid only for a period of five (5) years from the date issued.

Beginning with exemption certificates issued on or after November 1, 2017, exemption certificates issued to an exempt entity organized exclusively for religious purposes shall be valid only for a period of up to ten (10) years from the date issued.

Exemption certificates issued to semipublic institutions prior to November 1, 2017, shall expire upon notice by the Office of Tax and Revenue. Vendors are responsible for ensuring that exemption certificates issued to semipublic institutions prior to November 1, 2017 are still valid and unexpired at the time of acceptance.

If a vendor makes sales to a semipublic institution, the vendor shall keep a copy of the certificate of exemption, the name of the purchaser, the date of each sale, and the amount of the sale.

In order to receive an exemption certificate, a semipublic institution shall follow the Office of Tax and Revenue’s electronic application process.

All exemption applications filed by semipublic institutions shall include, but are not limited to, the following information:

Taxpayer ID Number;

Name;

Address;

Sales Tax Account Number;

NAICS Code;

Federal Exemption Status;

Proof of IRS exemption (e.g., IRS Determination Letter or Application for Recognition of Exemption);

Organizational details; and

Information regarding activities and locations in the District.

417.10 Exemption Certificate for Qualified High Technology Companies.

A qualified high technology company purchasing computer software or hardware, and visualization and human interface technology equipment, including operating and applications software, computers, terminals, display devices, printers, cable, fiber, storage media networking hardware, peripherals, and modems when purchased for use in connection with the operation of the Qualified High Technology Company shall obtain from the Deputy Chief Financial Officer a certificate of exemption stating that the company is entitled to the sales tax exemption.

Beginning with exemption certificates issued after November 1, 2017, exemption certificates issued to Qualified High Technology companies through an annual certification process shall be valid until the expiration date stated on the certificate.

Exemption certificates issued to Qualified High Technology Companies prior to November 1, 2017 shall not be accepted to prove that a sale is exempt from tax after January 31, 2018.

All exemption applications filed by qualified high technology companies shall include, but are not limited to, the following information:

Taxpayer ID Number;

Name;

Address;

Sales Tax Account Number;

NAICS Code;

Information demonstrating QHTC eligibility;

First year certified as QHTC;

Explanation of principal business activity;

Amount of QHTC Exempt Sales/Purchases from the prior year (broken down by period);

Number of QHTC employees hired;

Number of QHTC employees hired who are District residents;

Number of QHTC jobs created in the past year;

Gross revenue; and

Gross revenue earned from QHTC activities in the District.

417.11 Exemption Certificate for Natural or Artificial Gas, Oil, Electricity, Solid fuel, or Steam.

Except as otherwise provided in this section, each purchaser of natural or artificial gas, oil, electricity, solid fuel, or steam for any purpose exempt from sales tax under D.C. Official Code §§ 47-2005(11) or (11A), in order to qualify for the exemption, shall present evidence satisfactory to the Deputy Chief Financial Officer that the sale is exempt under the Act and this subsection, and shall obtain from the Office of Tax and Revenue a Utility exempt certificate to be presented to the vendor.

Beginning with exemption certificates issued after November 1, 2017, exemption certificates issued to purchasers of natural or artificial gas, oil, electricity, solid fuel, or steam shall be valid only for a period of five years from the date issued or until the purchaser is no longer entitled to the exemption, whichever is earlier.

Exemption certificates issued to purchasers of natural or artificial gas, oil, electricity, solid fuel, or steam exempt from sales tax under D.C. Official Code §§ 47-2005(11) or (11A) prior to November 1, 2017, shall no longer be accepted after November 1, 2018.

All exemption applications filed by each purchaser of natural or artificial gas, oil, electricity, solid fuel, or steam for any purpose exempt from sales tax under D.C. Official Code §§ 47-2005(11) or (11A) shall include, but are not limited to, the following information:

Taxpayer ID Number;

Name;

Address;

Sales Tax Account Number;

NAICS Code;

Proof of utility account; and

Utility details, including but are not limited to utility purpose, utility provider, utility account number, meter number, service address.

417.12 Exemption Certificate for Parking Fees.

Except as otherwise provided in this section, each purchaser of exempt parking, storage, or keeping motor vehicles or trailers, shall present evidence satisfactory to the Deputy Chief Financial Officer that the sale is exempt under the Act and this section, and shall obtain from the Director a specific exemption to be presented to the vendor.

Beginning with exemption certificates issued after November 1, 2017, exemption certificates issued to purchaser of exempt parking, storage, or keeping motor vehicles or trailers shall be valid only for a maximum period of two (2) years; in the case of residential parkers, the exemption certificate shall be valid for two (2) years, or for the period of a valid lease in the District of Columbia, whichever is shorter.

Exemption certificates issued to purchasers of exempt parking, storage, or keeping motor vehicles or trailers prior to November 1, 2017 shall not be accepted for sales made after November 1, 2018.

All exemption applications filed by a purchaser of exempt parking, storage, or keeping motor vehicles or trailers shall include, but are not limited to, the following information:

Taxpayer ID Number (SSN);

Name;

Address;

District Driver’s license number;

District vehicle tag information;

Vehicle make, model, year;

Parking lot details, including address and distance from residence; and

A copy of the taxpayer’s District Driver's License, District vehicle registration, and proof of District residence.

417.13 Contractor’s Exempt Purchase Certificate.

A contractor purchasing property at retail for a construction contract with a semipublic institution holding a valid exemption certificate or with the United States or District governments or their instrumentalities shall obtain from the Deputy Chief Financial Officer a certificate of exemption stating that the institution is entitled to the exemption. If the contractor does not present the certificate of exemption to the vendor, the vendor shall collect the reimbursement for the tax.

Beginning with exemption certificates issued after November 1, 2017, exemption certificates issued to contractors shall be valid only for the period of the exempt construction project, based on a signed contract with an exempt entity.

Exemption certificates issued to contractors prior to November 1, 2017 shall not be accepted for sales made after November 1, 2018, or the end date of the exempt project, whichever is first.

If a vendor makes sales to an exempt contractor, the vendor shall keep a copy of the certificate of exemption, the name of the purchaser, the date of each sale, and the amount of the sale.

In order to receive an exemption certificate, a contractor shall follow the Office of Tax and Revenue’s electronic application process.

All exemption applications filed for the contractor’s exempt purchase certificate by a contactor shall include, but are not limited to, the following information:

Taxpayer ID Number;

Name;

Address;

Sales Tax Account Number;

NAICS Code;

Project information, including but are not limited to location, dates, contract information, and contracting organization;

A list of all subcontractors, including taxpayer ID number; and

A copy of the relevant pages of the government or semi-public institution contract (shall include project dates, project ID number, and authorization signatures).

417.14 Government Exemption Certificate.

A government agency of the United States or District governments purchasing property at retail shall obtain from the Deputy Chief Financial Officer a certificate of exemption. If the government agency does not present the certificate of exemption to the vendor, the vendor shall collect the reimbursement for the tax.

If a vendor makes sales to a government agency, the vendor shall keep a copy of the certificate of exemption, the name of the purchaser, the date of each sale, and the amount of the sale.

In order to receive an exemption certificate, a government agency shall follow the Office of Tax and Revenue’s electronic application process.

All exemption applications filed by government organizations shall include, but are not limited to, the following information:

Taxpayer ID Number;

Name;

Address;

Description of the government or instrumentality;

Reason for exemption; and

Proof of applicability of exemption.

History

• SOURCE: Commissioners' Order 54-1415, 1 DCR 4 (July 19, 1954); as amended by Final Rulemaking published at 30 DCR 1922, 1926 (April 29, 1983); by Final Rulemaking published at 30 DCR 3263, 3264 (July 1, 1983); by Final Rulemaking published at 32 DCR 1354, 1359 (March 8, 1985); and by Final Rulemaking published at 36 DCR 8057, 8058 (November 24, 1989); as amended by Final Rulemaking 64 DCR 9892 (October 6, 2017); as amended by Final Rulemaking published at 66 DCR 5398 (April 26, 2019). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 417

9 DCMR § 418 USE OF CERTIFICATES OF EXEMPTION BY SEMIPUBLIC INSTITUTIONS

418.1 Tangible personal property purchased and paid for by a semipublic institution which has obtained a certificate of exemption is exempt from the District sales and use tax if the property is for use and consumption in maintaining, operating, and conducting the activities of the institution.

418.2 The right to exemption does not apply in any of the following circumstances:

(a) If the property is not paid for by the institution;

(b) If the property is not for use or consumption in the maintenance, operation, and conduct of the activities of the institution; and

(c) If the property is to be given to the institution's members or employees in place of salaries, wages, or compensation.

(d) If the property is used for carrying on an 'unrelated trade or business' as that term is defined in § 513 of the Internal Revenue Code of 1954; or

(e) If the property is purchased by the organization for the personal use of officials, members or employees of the institution, except as otherwise provided by law.

418.3 The certificate and the exemption number on the certificate shall not be used by any other person or organization to make purchases for or on their behalf or for the purpose of making a donation to the institution.

418.4 A semipublic institution regularly engaged in making sales at retail is required to report and pay to the District the tax on those sales and collect reimbursement for the tax from purchasers.

418.5 A certificate of exemption shall not be used by an institution to make purchases of property for resale.

418.6 Purchases for resale shall be made by using certificates of resale which enables the institution to make the purchases without payment of the tax to the supplier.

418.7 To be entitled to use certificates of resale, an institution shall first file an application for certificate of registration.

418.8 Failure on the part of a semipublic institution to exercise care in the use of its exemption certificate may result in revocation of the certificate.

The following are examples of purchases of property or services which are not purchases of property or services for use or consumption in the operation, maintenance, and conduct of semipublic institutions, whether paid for directly from the funds of semipublic institutions (or other person) is required to pay the tax on the sale in the same manner as any other person:

(a) Purchases of property or services by or for a clergyman or member of a religious order for personal use, for consumption in his or her individual capacity, and not on behalf of a semipublic institution are not sales to semipublic institutions; and

(b) Any purchase of property or services for which the organization is reimbursed by an official, member or employee of such organization.

418.9 In the event that the exempt organizations make purchases of property or services as described in this section without payment of the tax, such organizations shall be directly liable to the District for payment of the tax.

History

• SOURCE: Administrative Ruling No. 5, 16 DCRR; as amended by Final Rulemaking published at 30 DCR 1922, 1927 (April 29, 1983).

9 DCMR § 419 SALES TO FOREIGN GOVERNMENT AGENCIES, DIPLOMATS, EMPLOYEES, AND MILITARY PERSONNEL

419.1 By reason of privileges, exemptions, and immunities granted to certain foreign governments, those governments and their agencies (including embassies, legations, and commissions) may make purchases within the District of property or services for use in the conduct of their official activities if paid from their own funds without payment of the sales and use tax.

419.2 A letter of exemption with a separate identification number shall be issued by the District to each agency entitled to exemption under this section.

419.3 Each vendor shall keep a record of the following information with respect to sales to agencies which are exempt under this section:

(a) The sales price of each sale;

(b) The date of each sale;

(c) The name of the purchasing agency; and

(d) The agency's exemption number.

419.4 Each vendor shall also keep a copy of the purchase order or a copy of the voucher accompanying the payment, and shall obtain the signature of the person making the purchase.

419.5 An employee of an exempt agency may not use the agency's exemption number to make purchases for his or her own personal use and are required to pay the District sales tax unless they are holders of a U.S. Department of State exemption card.

419.6 The Department of State determines, with the approval of the District, which diplomats and other employees of foreign governments are entitled to exemption from District sales and use taxes, and issues to each exempt person an exemption identification card designated "EXEMPTION CARD" (Form DS-816).

419.7 The exemption identification card shall bear the following:

(a) The name of the individual who is entitled to the exemption;

(b) The individual's official title;

(c) The name of the country or agency with which the person is connected;

(d) An assigned identification card number; and

(e) The exempt individual's photograph and signature.

419.8 By showing the exemption identification card to a vendor, the holder shall be entitled to make purchases in the District without paying the District sales or use tax.

419.9 When making a tax-free sale to a person holding an exemption identification card, a vendor shall exercise care to be certain of the identification of the purchaser by comparing the purchaser and his or her signature with the photograph and signature on the card.

419.10 No sales shall be made on a tax-free basis to any person other than one to whom an exemption card has been issued.

419.11 Vendors shall keep a record of sales to persons exempt under this section which shall include the following:

(a) The name of the purchaser;

(b) The date of the sale;

(c) The amount of the sale;

(d) The Department of State identification card number; and

(e) A copy of the signature of the purchaser.

419.12 If the Department of State severs diplomatic relations with any country, the diplomats from that country will no longer be allowed to make tax-free purchases and their privileges will be revoked. Vendors will be notified from time to time by the Office of Finance and Revenue of revocations imposed under this section.

419.13 Sales to members of armed forces of foreign countries shall be subject to the District sales tax unless they hold a Department of State exemption identification card. District sales tax liability is not affected by Public Law 271, 81st Congress, which grants an exemption from customs duties and import taxes for foreign military personnel.

419.14 Vendors shall not accept the following means of identification as the basis for making tax-free sales:

(a) A "Certificate of Exemption of Foreign Diplomatic Officers and Employees from Motor Fuel Tax." (This card is different from the "EXEMPTION CARD" (Form DS-816) issued under § 419.6.);

(b) A foreign passport or a visa card issued by the U.S. government to a foreign visitor or resident alien;

(c) An identification card issued to an exchange student from a foreign nation; or

(d) The wearing of a uniform by military personnel of foreign governments.

History

• SOURCE: Administrative Ruling No. 22, 16 DCRR.

9 DCMR § 420 SALES TAX RETURNS

420.1 Periodic returns (D.C. Code § 47-2015) shall be filed with the Deputy Chief Financial Officer on or before the 20th day of the month following the reporting period by the following persons:

(a) Each vendor who has made any sale at retail during the preceding reporting period which is taxable under the Act;

(b) Each retailer (vendor) not engaging in business in the District who is expressly authorized by the D.C. Treasurer to pay the tax and collect reimbursement for the tax, and who has made any sales at retail which are taxable under the Use Tax Act during the preceding reporting period;

(c) Each purchaser who purchased services or tangible personal property for use, storage, or consumption in the District during the preceding reporting period, and who has not paid the tax to vendors or authorized retailers; and

(d) Each purchaser who has purchased tangible personal property or services for resale, but who has subsequently used or consumed that property or services for non-exempt purposes.

420.2 Each vendor who has filed all required periodic sales tax returns shall be deemed to have complied with the requirements imposed on vendors for filing annual returns; Provided, that this presumption of compliance shall not apply if the total amount of the taxable gross receipts for the vendor's tax year exceeds the total of the amounts reported on the vendor's returns for that tax year.

420.3 If the taxable gross receipts of any vendor for the vendor's tax year exceed the total of the amounts reported on the taxpayer's periodic returns, the vendor shall notify the Deputy Chief Financial Officer in writing within thirty (30) days after the end of the vendor's tax year.

420.4 The notice required by § 420.3 shall show the amount of taxable receipts in excess of the amounts already reported.

420.5 The vendor shall pay the tax on the excess receipts reported in accordance with § 420.3 at the time the report is filed.

420.6 [Reserved]

420.7 Failure of a vendor or retailer to receive a return form does not relieve that person from the requirement for filing returns. It is the responsibility of the vendor or retailer to obtain the necessary forms from the Deputy Chief Financial Officer if they are not received by mail.

420.8 Each vendor shall maintain records which will enable the Deputy Chief Financial Officer to audit the vendor's accounts, including those records specifically required to be made or preserved by the provisions of this chapter.

420.9 The form of returns shall be prescribed by the Deputy Chief Financial Officer.

420.10 Taxpayers whose liability for sales and use tax is less than fifty dollars ($ 50) per month shall be placed on an annual filing basis and shall only be required to file a sales and use tax return together with payment annually.

420.11 Annual returns for sales and use taxes shall be due on the 20th day of January of each year for the preceding calendar year.

420.12 Taxpayers placed on an annual basis shall not be required to file monthly returns or quarterly reconciliations.

420.13 If a taxpayer is not placed on an annual reporting basis, the taxpayer shall file monthly tax returns.

420.14 A tax return booklet containing monthly tax returns for each month of the tax year which can be detached and used (like a payment coupon) shall be provided to each taxpayer required to file monthly returns. Failure to receive forms or returns does not relieve a taxpayer of the responsibility to file and pay timely.

420.15 Tax booklet returns shall be used only to file reports on the type of tax for which intended (DO NOT USE EMPLOYER'S WITHHOLDING TAX RETURNS FOR REPORTING SALES AND USE TAXES).

420.16 Booklet returns are identified by month and shall be used properly for the period indicated.

420.17 Monthly returns and any tax due shall be due and payable in full on or before the 20th day of the month immediately following the month for which the return and payment are due. All information requested on each monthly return shall be completed in order for the return to be properly filed.

420.18 Each vendor shall be entitled to apply for a credit against the amount of sales tax payable in an amount equal to the lesser of five thousand dollars ($ 5,000) or one percent (1%) of the amount of the collectible sales tax due for each return filed; Provided, that the return is filed and paid on or before the due date of the return. Vendors filing more than one tax return from different locations shall be limited to the five thousand dollars ($ 5,000) credit for the aggregate returns.

420.19 [Deleted] 36 DCR 8057, 8059 (November 24, 1989).

420.20 [Deleted] 36 DCR 8057, 8059 (November 24, 1989).

420.21 [Deleted] 36 DCR 8057, 8059 (November 24, 1989).

History

• SOURCE: Commissioners' Order 54-1415, 1 DCR 4 (July 19, 1954); as amended by Commissioners' Order 62-481 effective March 20, 1962, 8 DCR 225 (April 2, 1962); as amended by Commissioners' Order 66-1674 effective October 27, 1966, 13 DCR 101 (November 7, 1966); by Commissioners' Order 68-551a effective August 15, 1968, Regulation No. 68-19 effective August 15, 1968, 15 DCR 69 (October 7, 1968); by Commissioners' Order 70-114, effective March 26, 1970, Regulation No. 70-11 effective March 26, 1970, 16 DCR 387 (April 20, 1970); by Final Rulemaking published at 28 DCR 1323 (March 27, 1981), incorporating 28 DCR 413 (January 23, 1981); by Final Rulemaking published at 30 DCR 1453, 1454 (April 1, 1983); and by Final Rulemaking published at 36 DCR 8057, 8058 (November 24, 1989).

9 DCMR § 421 EXTENSION OF TIME TO FILE RETURNS

421.1 The Deputy Chief Financial Officer may, for good cause shown, extend the time for filing any return for a period not to exceed thirty (30) days.

421.2 Failure of a vendor or retailer to receive a return form is not grounds for extending the time for filing any return or grounds for remission of penalties and interest.

421.3 Each request for an extension of time shall be in writing addressed to the Deputy Chief Financial Officer.

421.4 A request for extension of time to file shall contain concise statements of the reasons why an extension of time is desired.

History

• SOURCE: Commissioners' Order 54-1415, 1 DCR 4 (July 19, 1954).

9 DCMR § 422 DISCLOSURE OF SALES AND USE TAX INFORMATION

422.1 The Deputy Chief Financial Officer, in his or her discretion, may divulge or make known any information contained in or related to any report, application, license, or return required under the provisions of the Act, in accordance with the provisions and restrictions of this section.

422.2 Information contained in any report, application, license, or return which relates to the amount of gross proceeds, or any particular relating to gross proceeds or the computation of gross proceeds shall not be disclosed, except as specifically provided in § 422.4.

422.3 The Deputy Chief Financial Officer may divulge or make known information, such as the name and address of an individual, the name and address of a corporation, the names and addresses of corporate officers, and such other information which does not relate to the amount of gross proceeds or particulars relating to the computation of taxable gross proceeds.

422.4 Notwithstanding the restriction set forth in § 422.2, the Deputy Chief Financial Officer may furnish a complete copy of any Sales and Use Tax return to any of the following:

(a) Any officer of the District having a right to a copy of the return in his or her official capacity;

(b) The Internal Revenue Service; or

(c) The proper officer (or authorized representative) of any State imposing a sales or use tax, if that State grants substantially similar privileges to the Deputy Chief Financial Officer or his or her representatives.

History

• SOURCE: Commissioners' Order 54-1415, 1 DCR 4 (July 19, 1954).

9 DCMR § 423 BOTTLED WATER DELIVERY SERVICE

423.1 The sale by a bottled water delivery service of bottled water by the gallon generally for use with and to be dispensed from a water cooler or similar type of water dispenser is subject to sales tax.

423.2 Persons operating a bottled water delivery service business must report and pay the sales tax on the gross proceeds derived from that business. A security deposit is not part of the taxable purchase price.

History

• SOURCE: Final Rulemaking published at 62 DCR 4890 (April 17, 2015). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 423

9 DCMR § 424 bowling alley or a Billiard parlor Service

424.1 The sale of or charge for the service of a bowling alley or a billiard parlor is subject to sales tax.

424.2 The total amount charged for bowling is subject to tax. Taxable receipts for bowling shall include all fees or charges, including entry fees and league fees.

424.3 Bowling balls, shoes and other equipment are exempt from tax when sold as sales for resale to the provider of the service of a bowling alley. The tax applies to sales at retail and rentals of such property to customers and must be collected and remitted by the provider.

424.4 The total amount charged for billiards is subject to tax, including charges for coin-operated pool tables. Taxable receipts for participation in billiards shall include all fees or charges for billiards, whether by the game, by the hour, or by other measure.

424.5 The entire bundled charge for both taxable bowling alley or a billiard parlor services and nontaxable services will be presumed taxable if a primary purpose of the transaction is the sale of the taxable bowling alley or a billiard parlor services. The presumption may be overcome by the services provider at the time of the transaction by separately stating to the customer a reasonable charge for the taxable services. The service provider's books must support the apportionment between taxable and nontaxable services based on the cost of providing the service or on a comparison to the normal charge for each service if provided alone. If the charge for nontaxable services is unreasonable when considering the cost of providing the service or a comparable charge made in the industry for each service, the DCFO will adjust the charges and assess additional tax, penalty, and interest on the taxable services.

424.6 For purposes of this section:

(a) "Billiards” means the game of striking balls on a cloth-covered table with a cue stick, whether by the game or by the hour.

(b) “Bowling” means the game of rolling a ball down an alley to knock down pins, including candle-pin, duck-pin, five-pin, and ten-pin bowling.

(c) “Service of a billiard parlor” means participation in billiards.

(d) “Service of a bowling alley” means participation in bowling, as an individual or as part of a league.

History

• SOURCE: Final Rulemaking published at 62 DCR 4890 (April 17, 2015). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 424

9 DCMR § 425 Car washing services

425.1 The sale of or charge for the service of car washing, including cleaning, washing, waxing, polishing, or detailing an automotive vehicle is subject to sales tax.

425.2 The sale of or charge for self-service car washing is not subject to sales tax.

425.3 Persons operating places of business for the purpose of car washing must report and pay the sales tax measured by the gross proceeds derived from these services.

425.4 Materials such as cleaning fluids, wax, and other consumable supplies used in connection with the services of car washing are subject to the sales tax and the tax should be paid by the car wash purchasing such items. If the tax was not paid at the time of purchase of the items, those purchases must be reported to the District and a use tax paid on the amount of the purchases.

History

• SOURCE: Final Rulemaking published at 62 DCR 4890 (April 17, 2015). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 425

9 DCMR § 426 CARPET and upholstery cleaning SERIVCES

426.1 The sale of or charge for the service of carpet and upholstery cleaning, including the cleaning or dyeing of used rugs, carpets, or upholstery, or for rug repair is subject to sales tax.

426.2 Persons operating places of business for the purpose of carpet and upholstery cleaning must report and pay the sales tax measured by the gross proceeds derived from these services.

426.3 Materials such as thread and yarn which become an integral part of the rug, carpet, or upholstery subject to cleaning are exempt from tax when sold to the carpet and upholstery cleaners as sales for resale.

426.4 Materials such as detergents, cleaning fluids, and other consumable supplies used in connection with the services of carpet and upholstery cleaning are subject to the sales tax, and the tax should be paid by the cleaners purchasing such items. If the tax was not paid at the time of purchase of the items, those purchases must be reported to the District and a use tax paid on the amount of the purchases.

426.5 For purposes of this section, “carpet and upholstery cleaning” includes, but is not limited to:

(a) Dry cleaning services for rugs;

(b) Carpet, rug, or upholstery cleaning, dying, and repairing services, including carpet cleaning and repairing performed in commercial or residential structures;

(c) Treating or applying protective chemicals to carpet, upholstery, or rugs; and

(d) Binding and serging of area rugs.

History

• SOURCE: Final Rulemaking published at 62 DCR 4890 (April 17, 2015). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 426

9 DCMR § 427 HEALTH-CLUB SERVICES

427.1 The sale of or charge for the services of a health club subject to sales and use tax.

427.2 Health-club means a fitness club, fitness center, or gym the purpose of which is physical exercise, and includes the use of, access to, or membership to, an athletic club, fitness center, gym, recreational sports facilities featuring exercise and other active physical fitness conditioning or recreational sports activities including swimming, skating, or racquet sports, or other facility for the purpose of physical exercise.

427.3 Charges for sale of or charge for the services of a health club include any amounts paid to participate, enter, use, or access the health club, including but not limited to membership dues, drop-in fees, and entrance fees.

427.4 Charges for the use of facilities for non-fitness-related purposes, including room rentals, or for other services or charges covered by a separate contract with the user, such as a lease or occupancy agreement, are not subject to tax.

427.5 As sales by nonprofit organizations are not granted a general sales tax exemption, sales by nonprofit organizations of the services of a health club will be subject to tax unless the purchaser holds a valid exemption or resale certificate.

427.6 Examples of taxable charges for health-club services include, but are not limited to:

(a) A monthly membership to a fitness center to use and access the fitness center’s strength training equipment.

(b) A daily entrance fee to a tennis club for access to the club’s tennis courts.

(c) A charge for a multi-lesson pass to a yoga studio for access to classes with the studio’s yoga instructors.

(d) A gate charge to recreational center for use of the recreation center’s rock climbing area.

(e) A drop-in charge at gymnasium for participation in a group fitness class.

(f) A charge by a fitness center for personal training services performed at the fitness center by an employee of the fitness center.

427.7 Charges which do not constitute health-club services are not subject to sales tax. For example, if:

(a) A business organizes a ‘Get Fit Challenge’ for its employees, charging each participating employee dues, the fees collected will not be subject to tax.

(b) A gym charges fees for a lounge pool membership, where the lounge pool membership is not for physical exercise, such fee will not be subject to tax.

(c) A spa charges clients for services which are not fitness-related, such fees will not be subject to tax.

427.8 Where a personal trainer is hired by an individual to perform fitness related services outside of a health club, the fees collected will not be subject to tax.

427.9 Whether acting as an employee or independent contractor, when a personal trainer is hired to perform fitness related services at a health club, regardless of who owns the health club, any fees collected will be subject to tax.

427.10 The entire bundled charge for both taxable health-club services and nontaxable services will be presumed taxable if a primary purpose of the transaction is the sale of the taxable health-club services.

This presumption may be overcome by the health-club services provider at the time of the transaction by separately stating to the customer a reasonable charge for the taxable services.

The service provider's books must support the apportionment between taxable and nontaxable services based on the cost of providing the service or on a comparison to the normal charge for each service if provided alone.

If the charge for nontaxable services is unreasonable when considering the cost of providing the service or a comparable charge made in the industry for each service, the Deputy Chief Financial Officer will adjust the charges and assess additional tax, penalty, and interest on the taxable services.

History

• SOURCE: Final Rulemaking published at 62 DCR 4890 (April 17, 2015). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 427

9 DCMR § 428 Service of storage of household goods

428.1 The sale of or charge for the service of the storage of household goods through renting or leasing space for self-storage, including rooms, compartments, lockers, containers, or outdoor space, except general merchandise warehousing and storage and coin-operated lockers, are subject to sales and use tax.

428.2 The total amount charged for providing service of the storage of household goods is subject to tax. Charges associated with the cost of service of the storage of household goods, such as utilities, insurance, pick-up, delivery, locks or keys, are part of the taxable purchase price. Charges that the facility incurs as a result of a tenant who fails to pay including, but not limited to, auction fees and cut-lock fees are not part of the taxable purchase price. A security deposit is not part of the taxable purchase price unless it is converted into a rental payment.

428.3 “Household goods” means tangible personal property, including goods and products, used within households. “Household goods” include, but are not limited to, consumer electronics, appliances, tools, housewares, and home furnishings.

428.4 The following are examples of taxable storage of household goods:

Rental of storage lockers or storage units in apartment complexes if the locker or unit is utilized at the option of a tenant upon payment of a fee in addition to the apartment rental; and

Rental of a storage unit for the purpose of storing household goods in which the consumer customarily stores and removes the consumer's household goods on a self-service basis.

428.5 The following are examples of services which are not taxable storage of household goods:

(a) General warehousing and storage, where the warehouse is engaged in the operation of receiving, handling, and storing property for others using the warehouse's staff and equipment, and does not allow the consumer of the service separate access to the storage area used to hold the property;

(b) Monthly rental amounts for indoor storage of a boat during the winter months.

History

• SOURCE: Final Rulemaking published at 62 DCR 4890 (April 17, 2015). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 428

9 DCMR § 429 TANNING SERVICES

429.1 The sale of or charge for tanning services are subject to sales and use tax.

429.2 Tanning services means providing individuals a manmade tan, including sun tanning and spray tanning, whether or not assisted by an employee of the tanning business.

429.3 Charges for tanning services include any amounts paid for the tanning service, including but not limited to monthly membership fees and appointment fees.

History

• SOURCE: Final Rulemaking published at 62 DCR 4890 (April 17, 2015). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 429

9 DCMR § 430 ADMISSION TO PUBLIC EVENTS

430.1 In addition to events listed in the Act, the tax on admissions to public events shall apply to (but is not limited to) admission charges for trade shows, boat shows, home shows, horse shows, and dog shows.

430.2 Charges for the use of recreational facilities by persons participating in athletic events, and dues or initiation fees for admission to social clubs shall be exempt from the tax.

430.3 Cover or minimum charges by restaurants and other establishments for the sale of food or drink are considered part of the charge for food or drinks consumed on the premises and shall not be taxable as admissions.

430.4 If discounts are allowed to sales agents as compensation for sales of tickets, those discounts are considered to be a selling expense which may not be deducted in determining the amount of taxable receipts.

History

• SOURCE: Commissioners' Order 54-1415, 1 DCR 4 (July 19, 1954); as amended by Commissioners' Order 70-114, effective March 26, 1970, Regulation No. 70-11 effective March 26, 1970, 16 DCR 387 (April 20, 1970); and by Regulation No. 74-44 effective December 27, 1974, 21 DCR 1524 (January 6, 1975).

9 DCMR § 431 ADVERTISING, ADVERTISING AGENCIES, AND COMMERCIAL ARTISTS

431.1 Sales by vendors of direct mail advertising pieces, circulars, hand-outs, throw-aways, and similar advertising matter shall be subject to the sales tax on the sales price and reimbursement for sales tax shall be collected from the purchaser.

431.2 Advertising agencies shall not be retailers with respect to services of preparing and placing advertising in advertising media.

431.3 For the purposes of this section, the term "advertising media" includes, but is not limited to, newspapers, magazines, and other publications; radio and television programs; and billboards and other facilities used in public transportation.

431.4 An advertising agency is not a retailer of roughs, comprehensives, or visualizations prepared solely for the purpose of displaying the advertising idea to the agency's clients.

431.5 An advertising agency is a purchaser (as a principal) of tangible personal property incidental to the operation of its offices, such as stationery, ink, paint, tools, and office supplies. The tax shall apply to the gross receipts from the sale of these items to an agency.

431.6 An advertising agency shall report all purchases subject to the use tax if the sales tax has not been charged.

431.7 If an advertising agency (acting as agent for its clients) purchases tangible personal property, the tax applies to the gross receipts from the sale of the property to the agency. Examples include purchases of pamphlets, booklets, other printed matter; art work; radio transcriptions; engravings, and electrotypes and matrices.

431.8 Unless an advertising agency acts as a true agent, it is the retailer of the tangible personal property furnished to its clients, and the tax shall apply to the total amount received for the property.

431.9 In determining whether an advertising agency acts as a true agent of its clients, consideration shall be given to the contract between the parties, the conduct of the parties with respect to the property involved, and the facts and circumstances of the transaction.

431.10 Commercial artists or any other persons or firms engaged in the creation or production of drawings, paintings, designs, photographs, or other art work are retailers of such property sold to advertising agencies for use by the agencies in the rendition of their services, as well as similar property sold to advertisers or others.

431.11 The tax shall apply to gross receipts from the furnishing of drawings, paintings, designs, photographs, lettering, assemblies, or other art work used for reproduction as well as display purposes; but does not apply to receipts from services such as roughs or comprehensive visualizations, production supervision, consultations, or research.

History

• SOURCE: Administrative Ruling No. 10, 16 DCRR.

9 DCMR § 432 ARTISTS

432.1 The sale of pictures produced by artists, including, but not limited to, those produced in oil, charcoal, pen and ink, pencil, water colors, pastels, tempera, and similar media, shall be taxable sales.

432.2 The services performed by an artist to clean, repair, or restore any picture described in § 432.1 shall be services subject to tax.

History

• SOURCE: Commissioners' Order 54-1415, 1 DCR 4 (July 19, 1954).

9 DCMR § 433 AUCTIONEERS

433.1 Persons engaged in the business and making retail sales at auction of tangible personal property owned by them or other persons, shall be considered to be retailers for the purposes of the Act, and are required to obtain a certificate of registration and file returns.

433.2 Receipts from the sale of items at auction shall be subject to the tax.

History

• SOURCE: Commissioners' Order 54-1415, 1 DCR 4 (July 19, 1954).

9 DCMR § 434 BOOK MATCHES

434.1 The gross receipts from the sale of book matches to be used or consumed for any purpose other than resale shall be subject to the tax, including gross receipts from sales of book matches where the matches are given free of charge with cigars, cigarettes, or other tobacco products.

434.2 If a purchaser of book matches purchases them tax-free from a non-registered vendor, or buys them under a Certificate of Resale because a portion of the order shall be resold, the purchaser must pay District use tax on the cost price of that portion of the matches to be given away free of charge, whether given away with the sale of tobacco products or by themselves.

History

• SOURCE: Administrative Ruling No. 8, 16 DCRR.

9 DCMR § 435 BOOKBINDING AND RELATED SERVICES

435.1 Bookbinding and finishing services rendered in connection with the printing of tangible personal property shall be considered an inseparable part of the fabrication or production of a finished article, and as such are subject to tax. However, if the intention of the purchaser is to resell the subject of these services, the purchaser is entitled to issue a resale certificate to the bookbinder and purchase the bookbinding and related services without paying the tax.

435.2 Services performed by bookbinders on tangible personal property owned by the consumer, which is not a complete or finished article of tangible personal property prior to the rendition of any services by the bookbinder, are considered an integral part of the production or fabrication of tangible personal property, and as such, subject to the tax. These services include all steps in the process of bringing the property to its final completed form, such as collating, folding and stitching, padding and trimming, plastic binding, Acco fastening, tabbing, and paper ruling.

435.3 Services which are taxable when performed in combination with or as a part of any printing of tangible personal property include folding, perforating, cornering, hole punching, scoring, and flat cutting.

435.4 Folding, perforating, cornering, hole punching, scoring, and flat cutting are nontaxable services only when performed alone, or in combination only with each other. Separation of charges for these services on the bill to the customer (if the services are performed with a taxable function) does not make the charges non-taxable.

History

• SOURCE: Administrative Ruling No. 20, 16 DCRR.

9 DCMR § 436 CATERERS

436.1 The term "caterer," as used in this chapter, means any person who is engaged in the business of preparing food, meals or beverages, for the purposes of consumption at a place designated by the purchaser.

436.2 If a sales agreement with a caterer requires the caterer to prepare and serve food, meals, or beverages, and in addition provides that the caterer shall furnish waiters and other services connected with that preparation and service, the tax shall apply to the total charges, whether or not the charges for preparation and service and the charges for the waiters and other services are separately stated.

436.3 The tax does not apply to charges for an announcer, hat check person, doorman, or other person who is not connected with the preparation or service of food, meals, or beverages; Provided, that charges made for the service of these persons must be separately stated on the invoice and the nature of the service must be adequately described.

History

• SOURCE: Administrative Ruling No. 4, 16 DCRR.

9 DCMR § 437 COIN-OPERATED DEVICES

437.1 Gross receipts from the sale of tangible personal property through vending machines and other automatic devices are subject to the tax.

437.2 Gross receipts from the sales of food and drink, as described in § 114(a)(1) of the Act and defined in § 107 of the Act, shall be taxable at the rate of six percent (6%), including the sale of soft drinks, coffee, milk, candy, ice cream, popcorn, and similar items.

437.3 Gross receipts from all other sales through vending machines of taxable tangible personal property shall be taxable at the rate of six percent (6%), including (but not limited to) the sale of cigarettes, cigars, perfumes, photographs, handkerchiefs, and various hygienic products.

437.4 Persons using vending machines and other automatic devices for the purpose of selling tangible personal property shall obtain a certificate of registration, as provided in § 146 of the Act, to engage in the business of selling taxable tangible personal property; must file sales and use tax returns; and must pay the sales tax to the District on the entire gross receipts from sales made through these machines.

437.5 One (1) certificate of registration shall be sufficient for all machines operated by a single vendor.

437.6 All persons to whom § 437.4 applies shall keep adequate and complete records showing the location of each machine owned or operated, the serial number of each machine, purchases and inventories of merchandise bought for sale through each machine, and the gross receipts derived from the operation of each machine during each monthly period.

437.7 Persons operating machines through which non-taxable services are dispensed (such as washing machines, dryers, weighing scales, juke boxes, pinball machines, rides, and similar services) shall not be required to obtain a certificate of registration.

437.8 The sale or purchase of vending machines and other automatic devices, regardless of the items or services dispensed, and the sale or purchase of parts and equipment for those machines or devices, shall be subject to the sales tax or use tax, whichever is applicable.

History

• SOURCE: Commissioners' Order 54-1415, 1 DCR 4 (July 19, 1954); as amended by Commissioners' Order 56-890 effective May 9, 19 1956, 2 DCR 304 (May 21, 1956); by Commissioners' Order 62-41 effective March 20, 1962, 8 DCR 225 (April 2, 1962); by Commissioners' Order 66-1674 effective October 27, 1966, 13 DCR 101 (November 7, 1966); the Third Amendment to the Revenue Act of 1975 Act, D.C. Law 1-61, 22 DCR 4383, 4384 (February 12, 1976); and by Final Rulemaking published at 32 DCR 1776, 1777 (March 29, 1985).

9 DCMR § 438 CONSTRUCTION, REPAIR, OR ALTERATION OF REAL PROPERTY

438.1 Effective July 1, 1989, pursuant to the D.C. Revenue Amendment Act of 1989, landscaping services and landscaping construction shall be considered sales at retail as defined in D.C. Code § 47-2001(n)(1). Therefore, the provisions of this section do not apply to landscaping services construction. (For regulations regarding these services, see § 473)

438.2 As used in this section, the word "contractor" includes the term "subcontractor."

438.3 Under contracts in which the contractor agrees to sell materials used at an agreed price for those materials, or at the regular retail price, and to perform the work either for an additional price or on the basis of time consumed, the contractor is deemed to be a vendor making a taxable sale at retail within the meaning of the Act and is required to file returns, pay the tax, and collect reimbursement for the tax from the purchaser in the same manner as any other vendor.

438.4 In all cases covered by the provisions of § 438.3, the contractor is required to furnish a resale certificate to the registered vendor from which the contractor buys the material used, since that transaction constitutes a nontaxable sale for resale.

438.5 Under all contracts other than those subject to the provisions of § 438.3, and except as otherwise provided in this section, the contractor furnishing material and performing the work of affixing that material to real property so that the material becomes real property shall be deemed the purchaser (consumer) of the materials used and shall either reimburse the registered vendor (wholesaler or retailer) for the tax paid by that vendor, or file returns for the use or consumption of the materials and pay the tax as purchaser (consumer).

438.6 Examples of contracts subject to the provisions of § 438.5 are those in which the contractor agrees to furnish the following:

(a) Materials and services for a lump sum;

(b) Materials and services on a cost-plus basis; and

(c) Materials and services with an upset or guaranteed price which may not be exceeded.

438.7 A contractor may, in certain instances, fabricate part or all the articles which the contractor uses in construction work. For example, a sheet metal contractor may partly or wholly manufacture roofing, cornices, gutter pipe, furnace pipe, ventilation ducts, or other such items from sheet metal which that contractor purchases, and use these articles, pursuant to a contract for the construction or improvement of real property. In such instances, the contractor is either a vendor within the meaning of § 438.3 or a consumer within the meaning of § 438.5.

438.8 A contractor, including a subcontractor, purchasing property at retail for a construction contract with a semipublic institution holding a valid exemption certificate or with the United States or District governments or their instrumentalities shall obtain from the Deputy Chief Financial Officer a certificate of exemption stating that the institution is entitled to the exemption. (For regulations regarding these contractor’s exempt purchase certificate, see § 417.13). If the contractor does not present the certificate of exemption to the vendor, the vendor shall collect the reimbursement for the tax.

438.9 A contractor, including a subcontractor, purchasing property at retail for a construction contract with a semipublic institution holding a valid exemption certificate or with the United States or District governments or their instrumentalities shall obtain from the Deputy Chief Financial Officer a certificate of exemption stating that the institution is entitled to the exemption. (For regulations regarding these contractor’s exempt purchase certificate, see § 417.13). If the contractor does not present the certificate of exemption to the vendor, the vendor shall collect the reimbursement for the tax.

438.10 If a contractor is unable to designate the exact amount of materials and supplies to be covered by the exempt purchase certificate, that contractor may estimate the amount of such purchases.

438.11 The contractor shall be held strictly accountable for any use tax due to the District on the amount of purchases if there is any use of the materials other than incorporation of the materials into the real property of the exempt semipublic institution or government agency.

438.12 The contractor shall maintain adequate records to support the use of materials and supplies purchased with exempt purchase certificates and to show the disposition of all material and supplies purchased by the contractor with exempt purchase certificates.

438.13 If a contractor uses materials or supplies in the construction, repair, or alteration or real property for an exempt semipublic institution or government agency, and that contractor has already paid the sales or use tax on those materials or supplies at the time of purchase, the contractor may deduct the purchase price of the same on the next monthly return as an adjustment.

438.14 This section does not apply to contracts in which the contractor acts as a vendor of tangible personal property in the same manner as other vendors and is required to install that tangible personal property. In such instances, the contract will not be regarded as one for improving, altering, or repairing real property, even though the tangible personal property is installed in real property. A person performing this type of contract is primarily a retailer of tangible personal property and should segregate the full retail selling price of that property from the charge for installation, as the tax applies only to the retail price of the property. If the retail selling price is not segregated, the tax applies to the entire contract price including the installation charge which should be reported in the contractor's gross receipts, and reimbursement for those charges should be collected by the contractor from the purchaser.

438.15 Under a time and materials contract, where the contractor sells labor or service for one price and charges a separate and additional price for the materials, the contractor is deemed to be a vendor making a taxable sale at retail within the meaning of the Act and is required to collect tax reimbursement from the customer, file returns, and pay the tax, the same as any other vendor.

438.16 A time and materials contract is the only type of contract that permits a contractor to furnish a Certificate of Resale to a supplier. A Certificate of Resale cannot be used to purchase materials and supplies under any other type of construction contract.

438.17 If a time and materials contract is performed in the District for a private business or individual, the District sales tax must be added to the contract sales price of the material. If the contract is with an exempt organization, the contract price of the material is not taxable and no tax reimbursement can be charged.

438.18 In lump-sum, cost-plus, and guaranteed-price contracts, the contractor is the user or consumer of the materials purchased. When the contract is with a private business or individual, all of the materials and supplies purchased are subject to tax. The contractor must either pay the sales tax reimbursement to his supplier or he must pay the use tax directly to the District.

438.19 Contracts with the United States government, the District government, or with a semipublic institution holding a Certificate of Exemption issued by the Department, permit the contractor to buy tax-free only those materials which are to be physically incorporated in and made a part of real property.

438.20 To buy tax-free materials for the types of contracts listed in § 438.19, the contractor should not use the Certificate of Resale, but should use the Contractor’s Exempt Purchase Certificate prescribed in § 417.

438.21 Any materials and supplies which do not actually become a physical part of (and remain in) the finished job are subject to tax. This is true even if the materials which do not become a physical part of (and remain in) the finished job are completely consumed.

438.22 The following list does not include every item subject to tax under § 438.21, but is intended to indicate the nature of items subject to tax: concrete curing paper, nails, form ties, acetylene, oxygen, knee boots, concrete chutes, hose couplings, electricity, rope, crayons, fuel oil, form lumber, metal forms, small tools, repair parts for equipment, office equipment and supplies, fencing materials (wire, wood), or rentals of any type of tangible personal property.

438.23 Materials used in contracts with foreign governments and public utilities are not exempt and are subject to the tax even if they are incorporated in the real property.

438.24 Suppliers shall collect tax reimbursement on all sales to contractors which are not covered by either a Certificate of Resale or a Contractor's Exempt Purchase Certificate.

438.25 When the contractor furnishes the supplier with a Contractor's Exempt Purchase Certificate, the certificate does not relieve either the contractor or the supplier from tax liability on materials and supplies sold to the contractor which are not physically incorporated in the job covered by the certificate. Materials or supplies which, by their nature, cannot be physically incorporated in the job are taxable, and the supplier is responsible for collection of the tax.

438.26 Whenever a contractor purchases any materials, supplies or equipment, (either in or outside the District of Columbia) which are subject to the District Sales or Use Tax, and on which the tax reimbursement has not been paid to the supplier, the contractor must file a Use Tax Return with the District as required by the Act.

History

• SOURCE: Commissioners' Order 54-1415, 1 DCR 4 (July 19, 1954); as amended by Final Rulemaking published at 36 DCR 8057, 8059 (November 24, 1989); as amended by Final Rulemaking published at 68 DCR 3549 (April 2, 2021). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 438

9 DCMR § 439 CONTAINERS, CARTONS, BOXES, AND SIMILAR ITEMS

439.1 Sales of containers, shipping cartons, bottles, boxes, excelsior, bale binding, and similar items shall be classified into three (3) groups.

439.2 The first group shall include those sales in which the container, shipping carton, bottle, box, excelsior, bale binding, or similar item is purchased for delivery with other tangible property sold by the purchaser. Receipts from these sales shall not be subject to the tax.

439.3 The second group shall include those sales in which the container (or other item covered by this section) is purchased for consumption by the vendee and not for delivery by the vendee, as described in § 439.2. Receipts from these sales shall be subject to the tax.

439.4 If tangible personal property shall be sold by a vendor in a container (or other item); and if that vendor will retain title to the container and the container is to be returned to the vendor by the vendee; the vendor is using the container in the conduct of business and is a purchaser for use or consumption. The sale of the container to the vendor is a sale at retail to which the sales tax shall apply.

439.5 The third group shall include those sales in which the container (or other item) is purchased by a vendee engaged in rendering services not subject to the sales tax who uses the container in connection with that business. The receipts from these sales shall be subject to the tax.

439.6 Charges for the retention of possession of containers (such as gas cylinders) generally referred to as demurrage, are subject to District sales and use tax under the Act. Charges for demurrage are usually made by suppliers of gas to customers for retaining possession of these containers after the expiration of a fixed period of time.

History

• SOURCE: Commissioners' Order 54-1415, 1 DCR 4 (July 19, 1954); as amended by Commissioners' Order 70-114 effective March 26, 1970, Regulation No. 70-11 effective March 26, 1970, 16 DCR 387 (April 20, 1970).

9 DCMR § 440 FABRICATION OR PRODUCTION OF PERSONAL PROPERTY

440.1 The tax shall be charged on the full sales price for the production or fabrication of tangible personal property on special order, even if charges for labor are segregated from the cost of the materials.

440.2 If a new item is being produced, the tax shall be collected on the full sales price. For example, if a manufacturer orders a repair part for machinery from a machine shop, the tax must be collected on the full sales price of the part, including labor.

440.3 The tax applies to instances where materials are furnished by the customer and the fabrication of a new item consists of labor only. The following are examples of labor subject to the tax:

(a) A steel fabricator or machine shop rolling, bending, cutting, boring or punching holes in materials furnished by a customer;

(b) A tailor making a suit from materials furnished by a customer;

(c) Drapes or slipcovers made from materials furnished by a customer;

(d) Printing of tangible personal property from materials furnished by the customer.

History

• SOURCE: Administrative Ruling No. 9. 16 DCRR.

9 DCMR § 441 FLORISTS

441.1 Florists shall be engaged in the business of selling tangible personal property when they sell flowers, wreaths, bouquets, potted plants, and other similar items.

441.2 Receipts from sales of the items listed in § 441.1 to a retail customer shall be subject to the tax, and the vendor shall collect reimbursement from the purchaser.

441.3 Receipts from sales of plants, trees, shrubberies, and similar items which the florist is required to transplant on the land of the purchaser are subject to tax. Florists transplanting these items shall be subject to the tax on landscaping services. (For regulations regarding services, see § 473.)

441.4 [Deleted] 36 DCR 8057, 8059 (November 24, 1989).

441.5 Receipts from an order taken by a florist in the District and telegraphed or telephoned to a second florist outside the District are subject to the sales tax, and the florist taking the order is required to pay the tax.

441.6 The receipts from an order received by a florist in the District from another florist located outside the District for the delivery of flowers within the District are not subject to the sales tax, and payment of the tax by the florist in the District is not required.

441.7 The receipts from an order received from a customer by a florist in the District which is delivered by that florist to a point or points outside the District by messenger or common carrier are not subject to the tax.

History

• SOURCE: Commissioners' Order 54-1415, 1 DCR 4 (July 19, 1954); as amended by Final Rulemaking published at 36 DCR 8057, 8059 (November 24, 1989).

9 DCMR § 442 FOOD OR DRINK PREPARED FOR IMMEDIATE CONSUMPTION

442.1 In addition to the definition set forth in the Act [which is codified at D.C. Code § 47-2001(n)(1)(a)], the term "food or drink prepared for immediate consumption" includes sales made by a street or sidewalk vendor who has no fixed place of business, even though the vendor does not sell from a vehicle.

442.2 For the purposes this section, the term "food or drink prepared for immediate consumption" does not include food or drink sold or intended to be sold by grocery stores, supermarkets, delicatessens, or other grocery-type food stores for home preparation or consumption.

442.3 If a business combines the sale of food or drink for home preparation or consumption with the sale of food or drink for immediate consumption, those sales of food or drink for home preparation or consumption shall be exempt only when sold in the same form, quantities, and packaging as is commonly sold in grocery type food stores.

442.4 The owner or operator of any hotel, inn, tourist camp, tourist cabin, boardinghouse, or any other place furnishing meals or food together with rooms, lodgings, or accommodations to the public shall segregate and charge separately the sale price of such meals or food from any other charges to their customers.

History

• SOURCE: Commissioners' Order 54-1415, 1 DCR 4 (July 19, 1954); as amended by Commissioners' Order 62-481 effective March 20, 1962, 8 DCR 225 (April 2, 1962); by the Third Amendment to the Revenue Act of 1975 Act, D.C. Law 1-61, 22 DCR 4383, 4384 (February 12, 1976); and by Final Rulemaking published at 27 DCR 4929 (November 7, 1980), incorporating text of Proposed Rulemaking published at 27 DCR 3347, 3354 (August 1, 1980).

9 DCMR § 443 FOOD SERVED OR SOLD TO STUDENTS, PATIENTS, EMPLOYEES, FOOD STAMP RECIPIENTS, AND OTHERS

443.1 Meals and food products served, with or without charge, by a semi-public personal or professional service institution or organization (which holds a Certificate of Exemption issued under the provisions of the Act) to pupils, students, or patients are not subject to the sales tax whether or not prepared by such institutions. The furnishing of such meals and food products is considered to be exclusively for the purpose of maintaining, conducting, and rendering the service for which those institutions or organizations are organized and operated.

443.2 Meals and food products prepared and served by a convalescent home, educational institution, hospital, or similar institution which does not qualify as a semi-public institution under the Act (D.C. Code § 47-2001(r)) to students, teachers, doctors, nurses, and employees, where no separate charge is made, are not subject to the sales tax; Provided, that if the non-exempt institution purchases food prepared by others, those purchases shall be subject to the tax.

443.3 Sales of tangible personal property, including meals, foods, or drink, as provided in § 114(a)(1) of the Act by a semi-public institution, or any other entity, to employees, doctors, nurses, or the general public shall be retail sales subject to the sales tax.

443.4 Sales of tangible personal property, including meals and food products by any person other than a semi-public institution on the premises of semi-public or other institutions shall be subject to the tax.

443.5 Meals or food furnished to employees or others shall not be considered sales if those meals or food are furnished instead of cash and recorded as part of the employee's compensation, or if those meals or food are furnished to the employees or others for the employer's convenience.

443.6 Meals sold to employees in the same manner as meals shall be sold to the public, or meals which are sold in cafeterias, dining rooms, lunch counters, or other places operated for employees are taxable sales.

443.7 Sales of eligible foods, as defined in the Code of Federal Regulations at 7 CFR § 271.2, purchased with food stamps issued by the United States Department of Agriculture shall not be subject to the sales tax.

443.8 For purposes of this section, the term "eligible foods" means the following items:

(a) Any food or food product intended for human consumption except alcoholic beverages, tobacco, and hot foods and hot food products prepared for immediate consumption;

(b) Seeds and plants to grow foods for the personal consumption of eligible households;

(c) Meals prepared and delivered by an authorized meal delivery service to households eligible to use food stamps to purchase delivered meals, or meals served by an authorized communal dining facility for the elderly, for Supplemental Security Income households or both, to households eligible to use food stamps for communal dining;

(d) Meals prepared and served by a drug addict or alcoholic treatment and rehabilitation center to eligible households;

(e) Meals prepared and served by a group living arrangement facility to residents who are blind or disabled recipients of benefits under Title II or Title XVI of the Social Security Act; and

(f) Meals prepared by and served by a shelter for battered women and children to its eligible residents.

443.9 Food stamps issued by the United States Department of Agriculture shall not be used to purchase the following items:

(a) Alcoholic beverages;

(b) Tobacco or cigarettes;

(c) Household supplies;

(d) Soaps;

(e) Paper products;

(f) Medicines or vitamins;

(g) Any other nonfood items;

(h) Food that will be eaten in the store;

(i) Hot foods that are ready to eat, such as barbecued chicken; and

(j) Pet foods.

443.10 Sales of the following representative items purchased for immediate consumption shall be taxable when the foods listed are purchased with cash in the quantities indicated, but exempt when the foods are purchased with food stamps:

(a) Half-pint containers of milk;

(b) Candy bars (fewer than six);

(c) Can or bottled sodas (fewer than six);

(d) Cold sandwiches; and

(e) Certain other foods packaged and purchased for immediate consumption.

443.11 Sales of eligible foods such as those listed in § 443.10(a), (b) and (c) shall be exempt from sales tax if sold in larger quantities whether purchased with cash or food stamps.

443.12 If a sale combines taxable eligible food items, such as those listed in § 443.10, with nontaxable eligible food items, and if the purchase is to be made in part with food stamps and in part with cash, the vendor shall allocate the food stamps to the taxable food items first, then to the nontaxable food items.

For example: A customer arrives at the check-out stand with five dollars ($ 5.00) in food stamps and five dollars ($ 5.00) in cash. The amount of the purchase totals eight dollars ($ 8.00) of nontaxable eligible food in two dollars ($ 2.00) of taxable items first and then allocate the remaining three dollars ($ 3.00) of food stamps to the nontaxable food items. Thus, in this case, no sales tax would be collected.

History

• SOURCE: Commissioners' Order 54-1415, 1 DCR 4 (July 19, 1954); as amended by Final Rulemaking published at 34 DCR 8161 (December 18, 1987).

9 DCMR § 444 GAS, OIL, SOLID FUEL, AND STEAM

444.1 Sales of natural or artificial gas, oil, electricity, solid fuel or steam are exempt from the payment of sales tax, except as provided in this section.

444.2 The sales tax applies to the receipts from the sale of natural or artificial gas, oil, electricity, solid fuel or steam when made to any purchaser for purposes other than resale or for use in manufacturing, assembling, processing or refining.

444.3 Sales for resale include only such sales when made to persons registered under § 146 of the Act and only then if that person gives the vendor a certificate of resale.

444.4 Receipts from the sale of natural or artificial gas, oil, electricity, solid fuel or steam consumed directly in manufacturing, assembling, processing, or refining (e.g., for operating machinery, lighting, and heating the factory or shop) are exempt from the tax.

The following are examples of manufacturing, assembling, processing and refining:

(a) Manufacturing-production of ice or fabrication of ornamental iron railings, furniture, awnings;

(b) Assembly-assembly of radios, electric signs, truck bodies;

(c) Processing-cooking in a cannery or restaurant, pasteurizing milk; and

(d) Refining-production of gasoline or fuel oil in an oil refinery.

444.5 The use of natural or artificial gas, oil, electricity, solid fuel or steam incidental to but closely connected with production, such as lighting drafting rooms where products are designed, operating a first-aid room, and plant air conditioning, are considered as used in manufacturing, assembling, processing, or refining and are not subject to tax.

444.6 Natural or artificial gas, oil, electricity, solid fuel, or steam are subject to tax if consumed in administrative or commercial phases of the business activities listed in § 444.5, such as general offices, plant cafeterias (other than processing food), sales and display rooms, retail outlets, garages where trucks for off-premises sales of products are stored and serviced, and similar uses.

444.7 The tax shall not apply to the receipts from any of the types of sales exempted under D.C. Code § 47-2005.

444.8 If electricity or gas shall be sold through a meter for a single use, or if oil, solid fuel, or steam shall be consumed in a single unit for a single use, the use determines the taxable status.

444.9 If electricity or gas is sold through a single meter for two (2) or more uses, or if oil, solid fuel, or steam is consumed in a single unit for two (2) or more uses, some of which would be subject to the tax and some of which would not (such as a manufacturing plant and a retail store supplied through one meter or heated by one unit), the larger portion of the use of the service supplied through that meter or consumed in that unit shall determine the taxability of the service. The larger portion of use shall be measured by the relative load for each use or the relative time of operation of each.

444.10 Except as otherwise provided in this section, each purchaser of natural or artificial gas, oil, electricity, solid fuel, or steam for any purpose claimed to be exempt from or not subject to the tax, in order to qualify for the exemption, must present evidence satisfactory to the Deputy Chief Financial Officer that the sale is exempt under the Act and this section, and must obtain from the Deputy Chief Financial Officer a specific exemption to be presented to the vendor.

444.11 After an exemption is presented to a vendor, that vendor shall be relieved from the further collection of reimbursement for the tax until the exemption is canceled by the purchaser, or is revoked by the Deputy Chief Financial Officer by notice given to both the purchaser and the vendor.

444.12 Vendors of natural or artificial gas, oil, electricity, solid fuel, or steam in the District are relieved from the collection of the reimbursement of the tax on sales to the United States through its Executive Departments and to the District of Columbia through its Purchasing Officers, where such purchaser of such natural or artificial gas, oil, electricity, solid fuel, or steam, claims to be an instrumentality of either the United States or the District of Columbia and, therefore, exempt from reimbursing the vendor for the tax. The vendor shall keep a record of sales to these government instrumentalities in the same manner and to the same extent as required in the case of semipublic institutions.

History

• SOURCE: Commissioners' Order 54-1415, 1 DCR 4 (July 19, 1954).
• EDITOR'S NOTE: While it may appear that the sales tax regulations in 9 DCMR § 444, conflict with the statutory provisions in both Supp. V of the 1973, D.C. Code (1978) [Title 47, §§ 2601(14)(a)(4); 2601(14)(a)(7); 2605(1): and 2701(a)(2)]; and the analogous sections of the 1981 Edition of the D.C. Code, [Title 47, §§ 2001(n)(1)(-); 2005(11); and 2201(a)(1)(-)], this is due to an error in the codification of the D.C, Code, not an error in this DCMR title. The statutory requirement for the application of the sales and use taxes to natural and artificial gas, oil, electricity. solid fuel, and steam was imposed in §§ 114(a)(4) and § 201(a)(2) of the original D.C. Sales Tax Act (P.L. 81-76, 5-27-49). Those provisions were repealed and the § 128 exemption added by §§ 301 and 302 of D.C, Law 1-23 ("Revenue Act of 1975"). The changes were reflected in both the 1978 Supp. V and 1981 Ed. of the D.C. Code However, the changes made by D.C. Law 1-23 (the repeal of the sales tax on these items) were later repealed by §§ 401-407 of D.C. Law 1-70, the "Revenue Act of 1976." The restoration of the original provisions was not properly codified by the Congressional staff then responsible for the D.C. Code. The errors were not corrected in the 1981 Edition of the D.C. Code, but will be corrected in the 1982 Supplement.

9 DCMR § 445 GOVERNMENT PURCHASES AND SALES

445.1 In addition to the specific exemptions provided in the Act (D.C. Code § 47-2005), gross receipts from the types of sales set forth in this section shall be exempt from the tax imposed by the Act.

445.2 For the purposes of sales to the District or Federal governments under D.C. Code § 47-2005(1), vendors may treat as nontaxable the receipts from, and shall be relieved from the duty of collecting their reimbursement for tax on, sales to the United States and to the District of Columbia on any purchase order made by any authorized purchasing officer or by contract in which either the United States or the District of Columbia or any instrumentality of either Government is a party.

445.3 Sales of publications of the United States and District governments and any instrumentality of either government shall be exempt from the tax.

History

• SOURCE: Commissioners' Order 54-1415, 1 DCR 4 (July 19, 1954).

9 DCMR § 446 HOTEL ROOMS, LODGINGS, AND OTHER ACCOMMODATIONS

446.1 For the purposes of the Act (D.C. Code § 47-2001(n)(1)(C)), a "transient" is a person who has the right to occupy any room or rooms, lodgings or accommodations for a period of ninety (90) days or less during any one continuous stay.

446.2 [Repealed] 30 DCR 1922 (April 29, 1983).

446.3 [Repealed] 30 DCR 1922 (April 29, 1983).

446.4 [Repealed] 30 DCR 1922 (April 29, 1983).

446.5 [Repealed] 30 DCR 1922 (April 29, 1983).

History

• SOURCE: Commissioners' Order 54-1415, 1 DCR 4 (July 19, 1954); as amended by Commissioners' Order 56-890 effective May 9, 1956, 2 DCR 304 (May 21, 1956); and by Final Rulemaking published at 30 DCR 1922, 1927 (April 29, 1983).

9 DCMR § 447 LABELS AND OTHER PRINTED MATERIAL SOLD TO MANUFACTURERS

447.1 Sales of labels or name plates, and the printing on the labels or nameplates, to manufacturers or wholesale merchants shall be deemed made for the purpose of resale (not taxable) if the purpose of the purchaser is to affix the label or name plate to that purchaser's own products or the container of a product for resale.

447.2 Sales of package inserts, individual folding boxes, and set-up boxes, and the printing on the items, to manufacturers or producers to accompany their own manufactured products, and to pass to the ultimate consumer upon final sales of the manufactured product contained or described in the items, shall be deemed made for the purpose of resale and, therefore, not taxable.

447.3 Receipts from sales of direction sheets, instruction books, or manuals to a manufacturer, producer, wholesaler, or retail merchant, to be supplied with his or her at no separate charge, are not taxable; Provided, that if a separate charge is made for such sheets, books, manuals or pamphlets, the seller shall collect reimbursement for the tax from the purchaser.

History

• SOURCE: Commissioners' Order 54-1415, 1 DCR 4 (July 19, 1954).

9 DCMR § 448 LAUNDRIES, DRY CLEANERS, AND LINEN SUPPLIERS

448.1 Receipts from the sale of services for laundering, dry cleaning, or pressing of any kind of tangible personal property shall not be taxable.

448.2 The rental of textiles to commercial users shall be taxable, even if laundering or dry cleaning is an essential part of the rental.

448.3 Materials such as containers, wrapping paper, twine, soaps, soap powders, detergents, cleaning fluids, and other consumable supplies used in connection with the services of laundering, dry cleaning, and pressing are subject to the sales tax, and the tax shall be paid by laundries, dry cleaners, and linen suppliers purchasing such items. If the tax was not paid at the time of purchase of the items, those purchases shall be reported to the District and a use tax paid on the amount of the purchases.

History

• SOURCE: Commissioners' Order 54-1415, 1 DCR 4 (July 19, 1954); as amended by Commissioners' Order 70-114 effective March 26, 1970, Regulation No. 70-11 effective March 26, 1970. 16 DCR 387 (April 20, 1970); and by the Third Amendment to the Revenue Act of 1975 Act, D.C. Law 1-61, 22 DCR 4383 (February 12, 1976).

9 DCMR § 449 MEDICINES, PHARMACEUTICALS, DRUGS, AND MEDICAL DEVICES

449.1 For the purposes of the sales tax exemption for medicines under the Act (D.C.Code § 47-2005(14)), the words "medicines, pharmaceuticals, and drugs" shall be deemed 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.

449.2 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.

449.3 The exemption shall not apply to any unmedicated substance, even though the substance is to be applied internally or externally.

449.4 For the purposes of the exemption for medical devices under the Act (D.C.Code § 47-2005(15)), the word "material" means any item consumed in the treatment of a patient, but shall not include those items used for diagnostic purposes or any items commonly referred to as equipment or tools which are not consumed in the treatment of a patient.

449.5 Weight reducing preparations, such as "Metrecal," "900 Calories," "Caladay," "Instacal," "Nutrament," "Thorocal," "Dietcal," and other similar weight reducing preparations, sold in liquid, solid, or powdered form, shall be foods sold under § 107 of the Act.

History

• SOURCE: Commissioners' Order 54-1415, 1 DCR 4 (July 19, 1954); as amended by Commissioners' Order 70-114 effective March 26, 1970, Regulation No. 70-11 effective March 26, 1970, 16 DCR 387 (April 20, 1970): and by the Third Amendment to the Revenue Act of 1975 Act, D.C. Law 1-61, 22 DCR 4383, 4384 (February 12, 1976).

9 DCMR § 450 MORTICIANS

450.1 For the purposes of this chapter, the term "morticians" includes undertakers, embalmers, funeral directors, and others (including corporations) engaged in rendering services similar to the services rendered by "morticians."

450.2 Receipts from sales of tangible personal property by morticians, such as caskets, appurtenances, grave vaults, and clothing, shall be subject to the tax, even though personal services (such as embalming and providing delivery services and other equipment in conducting funerals) are rendered in connection with the sale of these items.

450.3 If a mortician charges a lump sum to customers which covers the entire cost of the funeral (in other words, without separating the charge for services from charges for tangible personal property in the bill rendered to the customer), the tax shall be imposed upon the fair retail value of all extras or property furnished in addition to that customarily furnished with standard service, plus fifty percent (50%) of the remaining charges after excluding the value of those extras.

450.4 The amount charged for a "standard funeral service" shall be based on the sales price of a casket and includes certain services, such as embalming, preparation of the remains, obtaining permits, and transportation. The tangible personal property furnished shall include the following:

(a) The casket;

(b) The body pouch;

(c) The registration book; and

(d) Acknowledgement cards.

450.5 Items of tangible personal property, listed as extras and charged for separately, shall be subject to sales tax on the full sales price of such articles. The following items shall be sold as extras:

(a) Dresses, suits, slumber robes, burial blankets, underwear, hose, and slippers;

(b) Crucifixes, and emblems; and

(c) Vaults, urns (including engraving charges), and shipping cases.

450.6 If the selling price of the tangible personal property is stated separately from the service charge on any bill to the customer, the tax shall be imposed only upon the selling price of the personal property.

450.7 If property and service charges are stated separately, as provided in § 450.4, the sale of that tangible personal property to the mortician shall be subject to the provisions of § 414 as purchases for resale.

450.8 Services including, but not limited to, clergymen, grave openings and closings, church hire, music, singers, and similar services, which are paid for by the mortician and subsequently repaid to him or her by the person(s) engaging the mortician's services, shall not be subject to tax, if those services are separately itemized in the mortician's bill.

450.9 If no part of the services of the mortician other than embalming the body, placing the body in a casket, and delivering the body from the District to a point outside the District (either in the mortician's own equipment or by common or contract carrier) takes place in the District, the tax shall not apply to the sale of tangible personal property in connection with those services.

450.10 Tangible personal property used or consumed in performing non-taxable services shall include cosmetics, embalming chemicals, hardening compounds, and similar materials. It is immaterial whether or not the non-taxable services are included in the charges for a standard funeral service or are separately itemized on the invoice. Purchases of these materials shall be subject to use tax if the sales tax was not paid at the time of purchase.

450.11 The following items shall be used by a mortician in the conduct of the business and are subject to use tax if the sales tax was not paid at the time of purchase:

(a) Advertising materials, calendars, pamphlets, fans, hats, pencils, gifts, candles, vigil lites, and flower stands;

(b) Soaps and disinfectants;

(c) Injection guns, needles, gloves, embalming room equipment, and casket trucks; or

(d) Furniture and fixtures.

450.12 If a mortician makes a cash expenditure for flowers or any other item of tangible personal property and adds the charge to the customer's bill for those items, the mortician is performing a service for the customer and shall pay the sales tax to the vendor.

450.13 Other items of cash expenditure, such as newspaper notices, crematory charges, certificate of death, and opening and closing the grave, shall not be subject to the sales tax.

450.14 If no tangible personal property is sold in connection with a "ship-in," the tax shall not apply to any portion of charges for services, whether or not the parlor or chapel facilities are used.

450.15 If a casket is furnished or any other tangible personal property is sold in connection with a "ship-in," the tax shall apply.

450.16 If no part of the services of the mortician takes place in the District, other than embalming the body, placing the body in a casket, and delivering the body from the District to a point outside the District, either in the mortician's own equipment or by common or contract carrier, the tax shall not apply to the sales of that tangible personal property. However, if the remains are made available in the District for the public or friends to pay their respects, then the tax shall apply.

450.17 Persons who shroud bodies are considered to be performing a service. The charge for shrouding shall not be subject to sales tax. Persons who shroud bodies are considered to be the consumers of all materials and supplies which they purchase to operate their businesses, and must reimburse their suppliers (vendors) for the tax.

450.18 If a mortician rents limousines and hearses for the conduct of a funeral, the mortician is the lessee and shall pay the sales tax to the lessor or owner of the equipment, even though the charges are separately stated on the invoice to the customer.

450.19 No tax shall be charged to the customer for use of vehicles rented by the mortician, since this service is considered a transportation service and not a rental.

450.20 If one mortician rents vehicles to another mortician during a particular period, and a net payment is made by one to the other, each one shall be required to collect and report the sales tax on the gross rental charges for the equipment.

450.21 The tax shall be payable for each rental period during which the hearse or limousine is within the boundaries of the District.

450.22 If vehicles are rented in the District and removed from the District for the complete duration of any rental period(s), the tax shall not apply to the gross receipts for the period(s) beginning after its removal from the District and ending before its return.

History

• SOURCE: Commissioners' Order 54-1415, 1 DCR 4 (July 19, 1954); as amended by Commissioners' Order 56-890 effective May 9, 1956, 2 DCR 304 (May 21, 1956).

9 DCMR § 451 SALES OF MOTOR VEHICLES AND ACCESSORIES

451.1 If a motor vehicle or trailer has extra equipment or accessories attached to it at the time of sale, that extra equipment or those accessories shall be considered a part of the motor vehicle or trailer (the sale of which is exempt from the sales tax), and the sales price of the extra equipment and accessories shall be included in the fair market value of the motor vehicle or trailer for purposes of determining the D.C. Motor Vehicle Excise Tax.

451.2 If a motor vehicle or trailer is sold to a non-resident and will not be titled in the District, the receipts from the sale of the extra equipment and accessories attached to the motor vehicle or trailer at the time of sale shall not be subject to the tax.

451.3 If a chassis is purchased from a District dealer or other person by a non-resident of the District and will not be titled in the District, and subsequent to the purchase of the chassis, a body or any other equipment or accessories are attached to that chassis, reimbursement for the sales tax shall be added to the sales price of that body, other equipment, or accessories if the purchaser takes delivery within the District. The receipts from the sale shall be taxable to the vendor.

History

• SOURCE: Commissioners' Order 54-1415, 1 DCR 4 (July 19, 1954).

9 DCMR § 452 NEWSPAPERS, MAGAZINES, OTHER PUBLICATIONS, AND RELATED SERVICES

452.1 For the purposes of this chapter, in order to constitute a newspaper, a publication shall contain at least the following elements:

(a) It shall be published at stated short intervals;

(b) When its successive issues are put together, it must not constitute a book;

(c) It must be intended for circulation among the general public; and

(d) It must contain matters of general interest and reports of current events.

452.2 Persons engaged in the business of clipping newspapers and selling press clippings sell tangible personal property at retail and shall be required to collect and pay the tax on the entire charge.

452.3 Receipts from the sale of magazines, trade journals, and other periodicals sold to consumers or users are sales at retail subject to the sales tax; Provided, that receipts from the sale of publications of the governments or instrumentalities of the United States and the District, or publications of semipublic institutions, are exempt from the sales tax.

452.4 For the purposes of this section, the phrase "other periodicals," as used in this section, includes newsletters which are prepared for distribution in quantity.

452.5 A printer shall be liable for the tax on the gross receipts from printing and distribution of trade publications, advertising pamphlets, circulars, or similar materials for a publisher, even though no charge is made to the distributee (consumer) by the publisher or printer for those trade publications, advertising pamphlets, circulars or similar materials. Reimbursement for the tax shall be collected by the printer from the publisher.

History

• SOURCE: Commissioners' Order 54-1415, 1 DCR 4 (July 19, 1954); as amended by Final Rulemaking published at 36 DCR 8057, 8059 (November 24, 1989).

9 DCMR § 453 ORTHOPEDIC AND PROSTHETIC APPLIANCES

453.1 The exemption under § 128(p) of the Act shall apply only to particular orthopedic and prosthetic devices individually designed, constructed, or structurally altered for the use of a particular individual to become a brace, support, supplement, correction, or substitute for the bodily structure (including the extremities) of the individual.

453.2 Sales of simple elastic supports (and supports whose effectiveness is secured through use of straps, laces, or pads) which are designed to correct weakened muscular, vascular, or glandular conditions, and are obtainable in standardized forms from regular retail dealers shall not be exempt from the tax.

453.3 Sales of form-fitting foundation garments designed primarily as aids to the appearance or comfort of the wearer considered are not exempt even though specially fitted or constructed for the wearer.

453.4 Sales of form-fitting foundation garments designed primarily as aids to the appearance or comfort of the wearer considered are not exempt even though purchased at the direction of a physician or pursuant to written advice from a physician.

453.5 In order to be included in the category of exempt sales, shoes must be expressly designed and constructed, or reconstructed and fitted to a particular individual to correct an abnormal foot condition or to supplement or substitute for natural inadequacies of a foot or leg.

453.6 The addition to stock or standard shoes (termed or advertised as "corrective" or "orthopedic"), or wedges, bars, crescents, pads, wafers, stays, or other similar devices will not serve to classify shoes as exempt under this section; however, the reconstruction of shoes to incorporate mechanical ankle or leg braces will place the shoes in the exempt classification.

453.7 Splints, splint materials, plaster cast materials, external pin fixations, and similar items are not exempt when sold to physicians, surgeons, or first-aid units for use in performing their services, unless the items will be resold by the purchaser and the charges for that resale are stated separately from the charges made for any personal services rendered in connection with the items.

453.8 If a physician, surgeon, or first-aid unit resells any of the items listed in § 453.7, the re-seller must be registered and furnish the supplier with a Certificate of Resale.

453.9 Receipts from the sale of the following appliances are taxable regardless of the conditions of design or construction (The list is not all-inclusive, and the taxability of any item not appearing on the list should be determined by reference to the other provisions of this section or by comparison to listed items):

(a) Abdominal supports, kidney supports, and uterine supports;

(b) Obesity supports, maternity supports, and postoperative supports;

(c) Trusses, athletic supporters, suspensories, thumb protectors;

(d) Surgical shoes;

(e) Elastic goods, such as stockings, thigh pieces, leggings, elbow caps, knee caps, wristlets, anklets, arch supports, or bandages;

(f) Ear correction caps;

(g) Eye shades and shields;

(h) Mouth breathing prevention devices; and

(i) Artificial breasts.

453.10 A ruling on the proper tax classification of any doubtful item may be obtained upon written request addressed to the Office.

History

• SOURCE: Administrative Ruling No. 12, 16 DCRR.

9 DCMR § 454 PARKING FEES: GENERAL PROVISIONS

454.1 The exemption from the sales tax on parking shall apply only to parking facilities which are used for residential parking and not to parking facilities which are used solely for nonresidential purposes, even though these facilities are within one half (1/2) mile of an individual's place of residence.

454.2 In no event shall the exemption from sales tax on parking be applicable to commercial tenants, parking for commercial purposes, or to vehicles used for commercial purposes.

History

• SOURCE: Commissioners' Order 54-1415, 1 DCR 4 (July 19, 1954); as amended by the Third Amendment to the Revenue Act of 1975 Act, D.C. Law 1-61, 22 DCR 4383, 4384 (February 12, 1976).

9 DCMR § 455 PARKING FEES: RESIDENTS OF APARTMENTS, CONDOMINIUMS, AND COOPS

455.1 Residents of apartment houses, condominiums, and cooperatives who park on the same premises which they occupy as a residence shall not require an exemption card.

455.2 For the purposes of this section, the term "same premises" means an area within the building or adjacent to the building or premises owned by the apartment landlord, or the condominium or cooperative, for the purpose of providing parking for its residents.

455.3 For the purposes of this section, private individuals who maintain a permanent residence in an apartment hotel, hotel, or motel are considered to be residents of an apartment house.

History

• SOURCE: Commissioners' Order 54-1415, 1 DCR 4 (July 19, 1954); as amended by the Third Amendment to the Revenue Act of 1975 Act, D.C. Law 1-61, 22 DCR 4383, 4384 (February 12, 1976); and by Final Rulemaking published at 24 DCR 8978 (April 21, 1978), incorporating text of Proposed Rulemaking published at 23 DCR 7298, 7299 (March 11, 1977).

9 DCMR § 456 PARKING FEES: EXEMPTION CARDS

456.1 Residents who do not qualify for exemption under § 455, and who park within a half (1/2) mile of their place of residence shall apply for an exemption card for the sales tax on parking if they wish to avail themselves of the exemption.

456.2 Information to be furnished by residents to obtain an exemption card shall include, but not be limited to, the following:

(a) The name and address of the applicant;

(b) The name, address, and lot number (if any) of the parking lot where the applicant intends to park;

(c) The year, make, and model of the car;

(d) The applicant's operator's permit or driver's license number;

(e) The distance between the parking lot and the applicant's residence;

(f) The purpose for which the vehicle or trailer is used;

(g) Proof of residence; and

(h) The applicant's signature.

456.3 If an exemption card holder changes his or her place of residence or parking lot, the holder shall surrender the card, and, if appropriate, make application for a new card.

456.4 If an exemption card holder disposes of the vehicle to which the card applies, the card holder shall surrender the exemption card.

456.5 If an exemption card holder purchases another vehicle, he or she shall apply for a new card.

456.6 An exemption card for sales tax on parking shall be required for each vehicle owned or leased by a resident.

456.7 Any violation of the Act or the provisions of this section concerning the exemption card may result in temporary or permanent cancellation of the exemption card.

456.8 If an exemption card has been canceled under § 456.7, the former holder may apply for restoration of the card in accordance with the reapplication procedures required by the Department.

456.9 Violation of the provisions of the Act or this section concerning the exemption from sales tax on parking may also subject holders, as well as vendors, to the applicable penalties set forth in the Act.

History

• SOURCE: Commissioners' Order 54-1415, 1 DCR 4 (July 19, 1954); as amended by the Third Amendment to the Revenue Act of 1975 Act, D.C. Law 1-61, 22 DCR 4383, 4384 (February 12, 1976); and by Final Rulemaking published at 24 DCR 8978 (April 21, 1978), incorporating text of Proposed Rulemaking published at 23 DCR 7298, 7299 (March 11, 1977).

9 DCMR § 457 PARKING LOT OPERATORS AND OTHER VENDORS OF PARKING AND STORAGE

457.1 Parking lot operators and other vendors who sell or charge for the service of parking, storing, or keeping motor vehicles or trailers shall be able to fully substantiate any tax-free sales made.

457.2 In the case of tax-free sales made to persons who park on the premises where they reside, in accordance with § 455, the operator or other vendor shall keep a record of the date of sale, the name of the resident, the residential address of the resident, and the amount of the sale.

457.3 Vendors are required to keep records of tax-free sales to persons holding exemption cards which shall include the name of the purchaser, the date of sale, the amount of sale, and the exemption card number for each separate transaction.

457.4 If a sale or charge is made on a monthly basis, one record of the sale for the month is sufficient.

457.5 If a sale or charge is made on a daily basis, a separate record of that sale or charge shall be kept on a daily basis.

457.6 Vendors shall be responsible for honoring an exemption card for sales tax on parking only for the parking lot specified on the card and the motor vehicle described on the card.

History

• SOURCE: Commissioners' Order 54-1415, 1 DCR 4 (July 19, 1954); as amended by the Third Amendment to the Revenue Act of 1975 Act, D.C. 1-61, 22 DCR 4383, 4384 (February 12, 1976); and by Final Rulemaking published at 24 DCR 8978 (April 21, 1978), incorporating text of Proposed Rulemaking published at 23 DCR 7298, 7299 (March 11, 1977).

9 DCMR § 458 PHOTOGRAPHERS, PHOTOFINISHERS, AND PHOTOSTAT PRODUCERS

458.1 The development and printing of pictures; and the sale of films, frames, cameras, completed photographs, photostats, blue prints, and similar items by photographers, photofinishers, and photostat producers are sales of completed tangible personal property which are subject to the sales tax. The tax shall be collected on the total selling price without deduction for the cost of the property sold, labor, service, or any other expense whatsoever.

458.2 Persons engaged in the processing of color films who also mount those films in frames are considered to be engaged in the sale of tangible personal property and shall collect the tax on the total charge or selling price.

458.3 A person under this section who renders services, such as retouching, tinting, or coloring of photographs belonging to others, is performing a taxable service and shall collect tax from the customer.

History

• SOURCE: Commissioners' Order 54-1415, 1 DCR 4 (July 19, 1954); as amended by Commissioners' Order 56-890 effective May 9, 1956, 2 DCR 304 (May 21, 1956); and by Commissioners' Order 70-114 effective May 26, 1970, Regulation No. 70-11 effective March 26, 1970, 16 DCR 387 (April 20, 1970).

9 DCMR § 459 PRINTING

459.1 For the purposes of the Act, the word "printing", shall include, but not be limited to, letter press printing, lithography, planography, off-set printing, multigraphing, reproduction proofs, mimeographing, intaglio engraving, and imitations of each of these types.

459.2 For the purposes of this section, the word "printer" shall include any person engaged in printing.

459.3 The receipts derived from the sales to ultimate consumers for printing of tangible personal property upon special order are taxable.

459.4 The selling price upon which tax shall be computed shall include all charges for material, labor, and production or fabrication of typography, photo engravings, electrotypes, mats, stereotypes, hand or machine composition, lithographic plates or negatives, author's alterations, art work, binding and finishing services, whether or not the various charges are separately stated.

459.5 The charges for furnishing government postage as a part of the printing item, if charged as a separate item, shall not be included in taxable gross receipts. If postage is not charged as a separate item, no allowance shall be made when computing gross receipts.

459.6 Persons operating private printing plants in conjunction with their principal business, and persons engaged in the printing of tangible personal property upon special order for a consideration, shall reimburse their vendors or suppliers for the tax upon all sales of tangible personal property and services subject to the sales tax, other than sales of those materials or services incorporated as ingredients or component parts into the printing of tangible personal property sold upon special order for a consideration.

459.7 Materials such as paper stock, book covers, stapling wire, thread, bindings, and ink which are sold to a printer to be incorporated, as ingredients or component parts, into the printing of tangible personal property sold upon special order for consideration shall be deemed to have been purchased for resale.

459.8 Printers are the ultimate consumers of photoengravings, electrotypes, lithographic negatives or plates, and similar items purchased for their general use in the preparation of printed matter; Provided, that if a printer is required by the customer to furnish and use such property in the printing of tangible personal property upon special order, its purchase by the printer is for resale and shall not be taxable.

459.9 Receipts from the sale of hand or machine composition or reproduction proofs by a typographer (or other person) to persons engaged in the printing of tangible personal property are deemed to be for resale and shall not be taxable.

459.10 If the type metal represented in the sale of hand or machine composition or reproduction proofs by a typographer is to be returned to the typographer, the receipts from the sales of that type metal shall not be taxable. However, if it is to be retained by the purchaser, the receipts from the sales of such metal are taxable.

459.11 Type, sorts, leads, slugs, and similar items received from a typographer or other person are considered plant equipment and the receipts from the sale of these items shall be taxable.

History

• SOURCE: Commissioners' Order 54-1415, 1 DCR 4 (July 19, 1954); as amended by Commissioners' Order 70-114 effective March 26, 1970, Regulation No. 70-11 effective March 26, 1970, 16 DCR 387 (April 20, 1970).

9 DCMR § 460 PUBLICATIONS AND SERVICES OF ORGANIZATIONS AND ASSOCIATIONS

460.1 The provisions of this section shall apply to organizations and associations located in the District that provide services to members and that publish periodicals for distribution to members or for sale to the public and members.

460.2 Membership dues paid to organizations and associations shall be exempt from the sales tax. Publications and services provided to members as part of the membership dues, without additional charge, shall also be exempt from the sales tax.

460.3 If an organization or association distributes a publication to members without additional charge, printing charges paid for any such publication by the organization shall be taxed as follows:

(a) The sales tax applies to the entire printing charge, if the organization or its agent takes delivery of the total printing order; or

(b) If the organization or its agent takes delivery of less than the entire printing order, the sales tax applies to the portion of the printing charge attributable to the following:

(1) To the amount of the order of which the organization or its agent takes delivery; and

(2) To the amount of the order which is delivered to members in the District.

460.4 If an organization or association sells the publication to members for an amount in addition to the membership dues or fees, or to non-members, the tax shall apply to printing charges and to sales of publications, as set forth in §§ 460.5 and 460.6.

460.5 The printing charges shall be exempt from the tax, if the organization furnishes the printer with the certificate of resale;

460.6 Subsequent sale(s) of the publication for delivery inside the District shall be subject to tax. Sales of the publication for delivery outside the District shall not be subject to the tax.

460.7 If an organization purchases taxable services, such as data processing or information services, to provide to its members as part of the membership dues, without additional charge, the organization shall be considered the consumer of the taxable services. The organization shall be subject to the sales or use tax if the services are delivered to the organization in the District or delivered to the organization outside the District for use within the District. (See §§ 474 and 475)

History

• SOURCE: Administrative Ruling No. 15, 16 DCRR; as amended by Final Rulemaking published at 37 DCR 5265 (August 10, 1990).

9 DCMR § 461 RENTALS, LEASES, AND LICENSES

461.1 For the purposes of the Act and this chapter, the word rental shall include rental, lease, license, or right to reproduce or use tangible personal property.

461.2 Royalties paid, or any other basis of payment, for use of tangible personal property, shall be rentals subject to the tax.

461.3 The tax shall be paid for rentals of films, records, or any type of sound transcribings to other than theaters and radio and television broadcasting stations.

461.4 The tax shall be paid for rentals of clothing, formal wear, costumes, and articles of similar nature.

461.5 The tax is payable on the rentals of linens, towels, dresses, aprons, caps, coats, uniforms, or any other textiles to restaurants, hotels, motels, beauty parlors, barber shops, and for any other commercial use, the essential part of which includes the recurring service of laundering or cleaning of these items.

461.6 The tax shall be computed on the gross receipts from rentals payable without any deduction whatsoever for expenses incident to the conduct of the business, or for service or maintenance which the lessor might furnish.

461.7 For the purpose of the imposition and payment of the tax each period for which a rental is payable shall be considered a complete sale, such as the following examples:

(a) In the case of a weekly rate, each week shall be considered a complete sale; and

(b) In the case of a continuing lease or contract with or without a definite expiration date, where rental payments are to be made monthly or on some other periodical basis, each installment or payment shall be deemed a complete sale at the time the installment or payment becomes payable.

461.8 When tangible personal property, including mobile equipment as motor vehicles, trailers, and contractor's equipment, is rented, the tax shall be payable for such rental period during which the property is within the boundaries of the District.

461.9 If tangible personal property is rented in the District and removed from the District for the complete duration of any rental period or periods, the tax is not payable on the gross receipts for any period or periods which begin after the removal of the property from the District and end before its return.

461.10 If equipment is rented with an operator for a specific period to perform work directed by the lessee, the rental is a taxable sale.

461.11 The tax shall not apply to charges for an operator who is hired with rental equipment if the charges for the operator are separately stated in an oral or written agreement, and if the charges are separately stated on the invoice rendered by the lessor to the lessee.

461.12 The furnishing of equipment and an operator as part of a contract to perform a specific job in a manner to be determined by the owner of the equipment or the owner's operator shall be considered a service not subject to the tax.

461.13 All transactions for the use of equipment and operator in which the consideration is determined on a time basis will be considered rentals subject to tax unless the parties enter into a written contract prior to the use of the property, which contract clearly shows that it is for the performance of a specific job and not the lease or rental of equipment.

History

• SOURCE: Commissioners' Order 54-1415, 1 DCR 4 (July 19, 1954); as amended by Commissioners' Order 56-890 effective May 9, 1956, 2 DCR 304 (May 21, 1956); and by the Third Amendment to the Revenue Act of 1975 Act, D.C. Law 1.61, 22 DCR 4383 (February 12, 1976).

9 DCMR § 462 RENTAL OR LEASE OF MOTOR VEHICLES

462.1 The rental of limousines, chartered buses, and other motor vehicles with drivers is subject to the tax when the control of the vehicle is exercised by the person to whom the vehicle is furnished, regardless of the method of charging for that use.

462.2 A person is deemed to "exercise control of a motor vehicle" if both of the following criteria apply:

(a) The person has the exclusive use of the vehicle for a given period of time; and

(b) The person has the right to direct the manner of the use of the vehicle, whether exercised or not, for that period.

462.3 The following are examples of taxable receipts from the rental of motor vehicles:

(a) Rental of limousines, hearses, and funeral cars to funeral directors;

(b) Rental of limousines for weddings;

(c) Rental of limousines for sightseeing;

(d) Rental of limousines and other vehicles to private parties; and

(e) Rental of a taxicab when the taxicab is used for any of the purposes listed in paragraphs (a) through (d).

462.4 The following are examples of non-taxable receipts from the rental of motor vehicles:

(a) Transportation of passengers by ambulances, buses, and taxicabs;

(b) Regularly scheduled sightseeing tours over a fixed route.

History

• SOURCE: Administrative Ruling No. 1, 16 DCRR.

9 DCMR § 463 REPAIRS AND ALTERATIONS TO TANGIBLE PERSONAL PROPERTY

463.1 The following shall be subject to the sales tax, regardless of whether the charge for labor is billed separately from the charge for materials:

(a) Charges for labor or materials to repair, alter, mend, or fit tangible personal property; or

(b) Charges for labor or materials to apply or install tangible personal property.

463.2 Under this section, the sales tax shall apply to all charges for work and materials used for the following:

(a) To restore or preserve the condition of tangible personal property;

(b) To adjust or correct defects in tangible personal property; or

(c) To alter the size, shape, content, appearance or utilitarian effect of tangible personal property.

463.3 Under this section, the sales tax shall apply to charges for maintenance, preventive maintenance, warranty service, maintenance contracts, and service calls, whether or not repairs are actually made during a service call.

463.4 Under this section, the sales tax does not apply to repairs to real property, or any appurtenances to real property which are classified as real property.

463.5 The tax shall apply to services which involve the applying of tangible personal property as a repair or replacement part of other tangible personal property.

463.6 Charges for repairing or reconditioning shall be taxable whether or not tangible personal property is furnished or transferred as a part of the service.

463.7 Generally a service which restores an item of personal property to its original appearance, usefulness, or working order is a taxable repair service.

463.8 Automotive repairs which are taxable shall include, but are not limited to, battery recharge, brake adjustment, wheel alignment, wheel balancing, lubrication, motor tune-up, and carburetor adjustment.

463.9 Automotive repairs which are non-taxable shall include, but are not limited to, washing, waxing, polishing, diagnostic service, installation or removal of tire chains, towing, rotation of tires, and mounting or removal of snow tires.

463.10 Home repairs which are taxable shall include, but are not limited to, the repair of gas and electric stoves, refrigerators, window air conditioners, portable dishwashers, clothes washers and dryers, venetian blinds, storm windows and doors, aluminum and fabric awnings, and the re-upholstering of furniture.

463.11 Home repairs which are non-taxable shall be those which are deemed to be repairs to real property, such as repairs to central air conditioning, hot water heaters, furnaces and oil burners, sinks, built-in dishwashers, and garbage disposers.

463.12 Miscellaneous repairs which are taxable shall include, but are not limited to, piano tuning, repair of neon and electric signs, wig repair, and film developing and processing.

463.13 Miscellaneous repairs which are non-taxable shall include, but are not limited to, automobile club dues, shoeshines, and wig styling.

463.14 A component part of an item which is affixed to real property so as to be a part thereof may be removed by the owner or another, taken to a repair shop, repaired and then replaced in the equipment. The repairman's charges are subject to tax as repairs to tangible personal property.

History

• SOURCE: Commissioners' Order 54-1415, 1 DCR 4 (July 19, 1954); as amended by Commissioners' Order 70-114 effective March 26, 1970, Regulation No. 70-11 effective March 26, 1970, 16 DCR 387 (April 20, 1970).

9 DCMR § 464 MAINTENANCE AND SERVICE CONTRACTS

464.1 A contract for the maintenance of tangible personal property is considered a repair contract and shall be subject to tax, whether paid in one payment or periodic payments.

464.2 The tax shall apply to the total amount charged, whether or not any materials are furnished.

464.3 Some examples of taxable maintenance contracts are the following:

(a) Office machines;

(b) Electrical signs;

(c) Manufacturing machinery; and

(d) Home appliances, such as televisions, refrigerators, washers, and dryers.

464.4 [Deleted] 36 DCR 8057, 8059 (November 24, 1989).

464.5 [Deleted] 36 DCR 8057, 8059 (November 24, 1989).

464.6 [Deleted] 36 DCR 8057, 8059 (November 24, 1989).

History

• SOURCE: Administrative Ruling No. 7, 16 DCRR; as amended by Final Rulemaking published at 36 DCR 8057, 3059 (November 24, 1989).

9 DCMR § 465 INSTALLATION CHARGES

465.1 Installation charges for any materials or parts which constitute a repair of existing tangible personal property shall be subject to tax.

465.2 Where an installation charge is made in connection with the sale of a new and complete item the installation charge shall not be taxable if separately stated.

Some examples of exempt installation charges would be in connection with the sale of the following:

(a) Draperies;

(b) Venetian blinds;

(c) Storm windows and doors; and

(d) Wall-to-wall carpeting;

(e) Gas and electric stoves.

History

• SOURCE: Administrative Ruling No. 7, 16 DCRR.

9 DCMR § 466 SALES OF REPAIR OR REPLACEMENT PARTS ON AN EXCHANGE BASIS

466.1 In many instances repair or replacement parts for automobiles, electronic equipment, washing machines, electrical appliances, and other equipment are sold on an exchange or trade-in basis, and an allowance is given by the vendor for the value of an old part towards the purchase price of a new, rebuilt, or reconditioned part. This credit may be called an "exchange allowance," "trade-in allowance," "deposit allowance," or "dud allowance."

466.2 The taxable sales price of a new, rebuilt, or reconditioned part shall include the amount of any allowance or credit given for the value of an old part exchanged or traded.

466.3 In some cases, especially in the automotive parts business, the listed price of a part is the exchange price and a "deposit" is charged the customer to ensure that the customer will return with the old part. The deposit shall be considered to be the value of the old part and must be included in the taxable sales price of the new or rebuilt part.

466.4 If the customer has the old part and turns it in at the time of sale, the amount of the deposit usually charged on that particular item shall be added to the exchange price and tax charged on the total.

History

• SOURCE: Administrative Ruling No. 17, 16 DCRR.

9 DCMR § 467 SERVICE CHARGES AND TIPS

467.1 Charges for room service and other service charges in connection with the serving of food or beverages (including alcoholic beverages) in hotels, motels, inns, cafes, bars, and similar establishments where food or drink are served shall be subject to tax under § 116 of the Act.

467.2 Cover, minimum, entertainment, or service charges, whether collected at the door of the establishment or added to the check, shall be taxable at the same rate as the food, drink, and alcoholic beverages served for consumption on the premises.

467.3 If a fixed percentage of the guest check representing gratuities or tips is added to charges for meals and drinks, and the purchaser is afforded no discretion with respect to the amount or method of payment, this charge is subject to the tax even though all or a part of the charge is paid by the vendor to the employees.

467.4 A gratuity or tip is not subject to tax (even though it may be charged to the customer's regular or credit card account and not paid directly to the server, waiter, or waitress at the time of sale or service) if both of the following conditions apply:

(a) The tip is given voluntarily by the customer; and

(a) The amount of the tip is determined by the customer at the discretion of the customer.

History

• SOURCE: Administrative Ruling No. 3, 16 DCRR.

9 DCMR § 468 STENOGRAPHIC SERVICES, REPRODUCTION, ADDRESSING, AND MAILING

468.1 Charges for copying, photocopying, reproducing, duplicating, mimeographing, blueprinting, photostating, addressing, mailing, and public stenographic services are taxable, regardless of the manner or means of performing those services.

468.2 For the purposes of this section, "mailing" includes folding and inserting for mailing.

468.3 For the purposes of this section, the term "public stenographic services" includes typing services.

History

• SOURCE: Commissioners' Order 54-1415, 1 DCR 4 (July 19, 1954); as mended by Commissioners' Order 70-114 effective March 26, 1970, Regulation No. 70-11 effective March 26, 1970, 16 DCR 387 (April 20, 1970).

9 DCMR § 469 STORAGE WAREHOUSEMEN AND FURNITURE MOVERS

469.1 For the purposes of this chapter, storage warehousemen, furniture movers, and persons engaged in similar businesses, are engaged primarily in the rendition of a service, and the receipts from such services are not subject to tax.

469.2 Storage warehousemen, furniture movers and other persons covered under this section must reimburse their vendors for the tax on all commodities purchased for use in carrying on their businesses.

History

• SOURCE: Commissioners' Order 54-1415, 1 DCR 4 (July 19, 1954).

9 DCMR § 470 TIRE RECAPPING

470.1 The gross receipts from the sale of recapped tires (a sale of tangible personal property) are subject to the sales tax.

470.2 The gross receipts from the total charge for recapping a person's tire on special order are subject to the tax (a fabrication or production of tangible personal property on special order for a consideration).

History

• SOURCE: Administrative Ruling #11, 16 DCRR.

9 DCMR § 471 SALES TAX EXEMPTION, AND USE TAX ALLOCATION FOR TELECOMMUNICATION, UTILITY AND PUBLIC-SERVICE COMPANIES

471.1 The Deputy Chief Financial Officer shall, upon written application of a telecommunication, utility or public-service company, exempt that company from the sales tax under § 128(f) of the Act, as amended, and issue a certificate of exemption.

471.2 Tangible personal property and select services subject to sales tax under the Act, purchased and paid for by telecommunication, utility and public-service companies which have obtained a certificate of exemption, are exempt from the District of Columbia sales tax if the property is for use and consumption in maintaining, operating, and conducting the activities of the company which are subject to the gross receipts tax under An Act Making appropriations to provide for the expenses of the government of the District of Columbia for the fiscal year ending June thirtieth, nineteen hundred and three, and for other purposes, approved July 1, 1902 (32 Stat. 619; D.C. Code § 47-2501), as amended, or which are subject to the telecommunication service tax under the Toll Telecommunication Service Tax Emergency Act of 1989, effective March 1, 1989 (D.C. Act 8-2; 36 DCR 1759; March 10, 1989).

471.3 A telecommunication or utility company exempt from the sales tax under this section shall pay a use tax on all purchases subject to the sales tax under the act and subject to the compensating use tax under the District of Columbia Use Tax Act in an amount determined by applying the following three-step formula:

Step One

Column (1)

Column (2)

Column (3)

Column (4)

Total District taxable purchases for month

×

Gross receipts and/or gross charges on which District gross receipts tax or telecommunication service tax paid in month of Column (1)

×

Purchases of tangible personal property everywhere in month of Column (1)

=

Amount of Column (1) purchases exempt for use tax

Gross receipts and/or gross charges every where for month of Column (1)

District purchases of tangible personal property in month of Column (1)

Step Two

Amount of Column (1) taxable at applicable rate, 6% e.g.

×

Amount of Column (1) less Column (4) exempted purchases, with the exempted purchases not to exceed Column (1) amount

×

Applicable sales tax rate. 6% e. g

=

Use tax payable to District at applicable rate

Total District purchases from Column (1)

Step Three

Add the results of all Step Two applicable sales and use tax rates. Remit to the District total Use tax payable to the District," as computed in Step Two for all applicable tax rates.

The following are examples of the application of § 471.3.

(1) The taxpayer has gross receipts charges from the sale of toll telecommunication service everywhere for the calendar month of one million dollars ($ 1,000,000), with one hundred thousand dollars ($ 100,000) of those gross charges and/or gross receipts in the District. Purchases of tangible personal property subject to use tax are five hundred thousand dollars ($ 500,000), with fifty thousand dollars ($ 50,000) in the District. For purposes of this example, a six percent (6%) District sales tax rate applies to forty thousand dollars ($ 40,000) of the fifty thousand ($ 50,000) in District purchases. The remaining ten thousand dollars ($ 10,000) in District purchases are subject to an eight percent (8%) rate. The use tax exemption, and use tax payable to the District, is computed as follows:

Step One

Column (1)

Column (2)

Column (3)

Column (4)

$ 50,000

×

$ 100,000

×

$ 500,000

=

$ 50,000 exemption

$ 1,000,000

$ 50,000

Step Two and Step Three

These steps need not be completed because the exemption equals taxable purchases resulting in no District use tax payable. However, a tax return prescribed by the Mayor shall be filed in this instance, nonetheless.

(2) Same facts as (1) above except that gross receipts or gross charges subject to a District gross receipts tax or toll telecommunication service tax are fifty thousand dollars ($ 50,000). The exemption is computed as follows:

Step One

Column (1)

Column (2)

Column (3)

Column (4)

$ 50,000

×

$ 50,000

×

$ 500,000

=

$ 25,000 exemption

$ 1,000,000

$ 50,000

Step Two

6% rate

$ 40,000

×

$ 25,000

=

$ 20,000

×

6%

=

$ 1,200

$ 50,000

8% rate

$ 10,000

×

$ 25,000

=

$ 5,000

×

8%

=

$ 400

$ 50,000

Step Three

$ 1,200(tax at 6% rate) + $ 400(tax at 8% rate) = $ 1,600(Total use tax payable to the District)

471.4 A public-service company exempt from the sales tax under this section shall pay a use tax on all purchases subject to the sales tax under the act and subject to the compensating use tax under the District of Columbia Use Tax Act in an amount determined by applying the following three-step formula:

Step One

Column (1)

Column (2)

Column (3)

Column (4)

Total District taxable purchases for month

×

Public-Service miles traveled within the District

×

Purchases of tangible personal property everywhere in month of Column (1)

=

Amount of Column (1) purchases exempt from use tax

Public-Service miles traveled everywhere

District purchases of tangible personal property in month of Column (1)

Step Two

Amount of Column (1) taxable at applicable rate, 6% e.g.

×

Amount of Column (1) less Column (4) exempted purchases, with the exempted purchases not to exceed Column (1) amount

×

Applicable sales tax rate. 6% e.g.

=

Use tax payable to District at applicable rate

Total District purchases from Column (1)

Step Three

Add the results of all Step Two applicable sales and use tax rates. Remit to the District total "Use tax payable to the District," as computed in Step Two for all applicable tax rates.

The following are examples of the application of § 471.4:

(1) The taxpayer has public-service miles traveled everywhere for the calendar month of one million miles (1,000,000), with one hundred thousand miles (100,000) traveled in the District. Purchases of tangible personal property subject to use tax are five hundred thousand dollars ($ 500,000), with fifty thousand dollars 50,000) in the District. For purposes of this example, a six percent (6%) District sales tax rate applies to forty thousand dollars ($ 40,000) of the fifty thousand dollars ($ 50,000) in District purchases. The remaining ten thousand dollars ($ 10,000) in. District purchases are subject to an eight percent (8%) rate. The use tax exemption, and use tax payable to the District, is computed as follows:

Step One

Column (1)

Column (2)

Column (3)

Column (4)

$ 50,000

×

100,000 miles

×

$ 500,000

=

$ 50,000 exemption

1,000,000 miles

$ 50,000

Step Two and Step Three

These steps need not be completed because the exemption equals taxable purchases resulting in no District use tax payable. However, a tax return prescribed by the Mayor shall be filed in this instance, nonetheless.

(2) Same facts as (1) above except that fifty thousand miles (50,000) were traveled in the District. The exemption is computed as follows:

Step One

Column (1)

Column (2)

Column (3)

Column (4)

$ 50,000

×

50,000 miles

×

$ 500,000

=

$ 25,000 exemption

1,000,000 miles

$ 50,000

Step Two

6% rate

$ 40.000

×

$ 25,000

=

$ 20,000

×

6%

=

$ 1,200

$ 50,000

8% rate

$ 10.000

×

$ 25,000

=

$ 5,000

×

8%

=

$ 400

$ 50,000

Step Three

$ 1200(tax at 6% rate) + $ 400(tax at 8% rate) = $ 1,600 (Total use tax payable to the District)

471.5 The use tax return required to be filed under this section shall be due and the tax paid by the twentieth (20th) day of the month following the calendar month for which the tax is due.

471.6 Each telecommunication, utility and public-service company shall file a return as prescribed by the Mayor even if no use tax is payable therewith.

471.7 The numerator and denominator of Column (3) purchases in §§ 471.3 and 471.4 shall include services subject to sales and use taxes without regard for any exemption from these taxes.

471.8 The numerator and denominator of Column (3) purchases in §§ 471.3 and 471.4 shall include rental payments subject to sales and use taxes under the act and the District of Columbia Use Tax Act without regard for any exemption from these taxes.

471.9 The exemption provided for under §§ 471.3 and 471.4 shall be limited to Column (1) total District taxable purchases for the same calendar month.

471.10 No carryforward or carryback shall be allowed for any excess exemption derived from operation of the formulas in §§ 471.3 and 471.4.

471.11 Column (1) total District taxable purchases, as required under the formula set forth in §§ 471.3 and 471.4, for a calendar month shall include all purchases of tangible personal property and services subject to sales or use taxes without regard for any exemption from these taxes.

471.12 If the allocation provisions of this section do not fairly represent the extent of the sales tax exemption provision under the Act, as amended, the taxpayer may petition for, or the Mayor may require, the employment of any other method to effectuate an equitable allocation of the taxpayer's sales tax exemption.

History

• SOURCE: Final Rulemaking published at 34 DCR 6143 (September 25, 1987); as amended by Final Rulemaking published at 36 DCR 2478 (April 7, 1989).

9 DCMR § 472 REAL PROPERTY MAINTENANCE

472.1 Gross receipts from the sale of or charges for the service of real property maintenance shall be subject to the tax. For the purpose of this section, the term "real property maintenance" means the activities of keeping the land or premises of a building clean, orderly and functional, including performing minor adjustments, maintenance or repairs.

472.2 Examples of keeping the land or the premises of a building clean, orderly and functional include, but are not limited to, the following:

(a) Wall and ceiling cleaning;

(b) Pest control;

(c) Exterior and interior window cleaning;

(d) Floor (hardwood or tile) cleaning;

(e) Restroom cleaning and stocking;

(f) Exterior and interior trash removal;

(g) Maintenance of inground or indoor swimming pools;

(h) Exterior building cleaning;

(i) Chimney and duct cleaning;

(j) Parking lot, garage and recreational area maintenance; and

(k) Ground maintenance, including:

(1) Fertilizing;

(2) Thatching;

(3) Mulching;

(4) Seeding;

(5) Edging; and

(6) Aeration.

472.3 The term "real property maintenance" shall not include activities such as painting, wallpapering, or other services performed as part of construction or major repair services performed under an employee-employer relationship, or services performed by persons who are not considered to be regularly engaged in business.

472.4 For the purpose of this section, an "employer-employee relationship" exits if the employer exercises or has the right to exercise control over the individual in the performance of services under the usual common law rules applicable in determining the employer-employee relationship, not only as to the result to be accomplished by the work, but also as to the details and means by which that result is accomplished. Other factors characteristic of an employer, but not necessarily present in every case, are the furnishing of tools and the furnishing of a place to work to the individual who performs the services. Workers provided under temporary help service contracts or under other agreements are not considered employees for the purpose of this section.

472.5 Whether the relationship of employer and employee exists shall be determined, when the issue arises, upon an examination of the particular facts of each case.

472.6 A maintenance or janitorial contract includes minor adjustments, maintenance or repairs that are performed on the land or building. These tasks are performed in the normal course of the contract and are usually performed with small tools (hammer, screw driver, pliers, etc.). Examples of minor adjustments include, but are not limited to, bulb, fuse and filter replacements; wall plate replacements; oiling of motors or other movable items; motor screw adjustments; installation of peepholes, kickplates and mailslots; and installation of doorstops and weather stripping.

472.7 Minor adjustments shall not include a complete overhaul of any equipment associated with the real property. If a District building permit is needed, the task shall not be considered to be minor. Examples of repairs that are exempt from the tax include the following:

(a) Replacement of sinks, garbage disposals, toilets, tubs;

(b) Major repairs to hot water heaters;

(c) Additions to electrical panels; and

(d) Replacement of shingles or siding.

472.8 Inground or indoor swimming pool maintenance includes seasonal services such as winterization, spring start-ups, chemical treatments, pump and filter cleaning, vacuum cleaning, wall cleaning and scrubbing and any necessary minor repairs. Inground or indoor swimming pool maintenance shall not include retiling or other major repairs such as overhaul of the heating system, pumping, or electrical systems.

472.9 Parking lot, garage and recreational area maintenance includes services such as sweeping, cleaning, pressure washing, vacuuming, mowing and snow removal. Real property maintenance for parking lots, garages and recreational areas shall not include pavement patching, asphalt repair, sealing, grading, or installing wheelstops.

472.10 Pest control consists of the services of identifying, preventing, controlling, or eliminating, by use of chemical or mechanical means, infestation of any of the following:

(a) Insects, including, but not limited to, spiders, mites, ticks, ants, and bees;

(b) Wood infesting organisms;

(c) Rodents;

(d) Nuisance birds;

(e) Any other undesirable animals or pests that may infest buildings; and

(f) Pest infestations or diseases of trees, shrubs or other plantings.

472.11 Trash removal service includes the removal of waste, refuse and other discarded material, including solid, liquid, semisolid, or contained gaseous material, resulting from industrial operations, commercial operations, and institutional activities.

472.12 Vendors providing real property maintenance services may issue a resale certificate on all tangible personal property that will be sold or transferred as part of the taxable service or taxable contract. Items such as brushes, mops, brooms, and wiping cloths that are consumed in performing or used to perform taxable real property maintenance services shall not be considered to be sold or transferred as a part of the taxable service; therefore, such items shall not be purchased with a certificate of resale. Examples of materials for which a vendor may issue a resale certificate include the following:

(a) Cleaning compounds;

(b) Plastic liners;

(c) Soap, paper and toiletry supplies;

(d) Pest control chemicals, foggers and traps;

(e) Light bulbs and fixtures;

(f) Odor controls; or

(g) Wax and maintenance chemicals.

472.13 Vendors providing temporary help to perform real property maintenance shall be required to collect the sales tax on the charges for that service. The tax shall be collected even if the temporary help performs some inconsequential nontaxable services. Vendors providing temporary help for nontaxable services shall not be required to collect the tax if that help also performs some inconsequential taxable real property maintenance services. Temporary help includes maids-for-hire performing real property maintenance services for domestic purposes as well as commercial purposes.

472.14 Property management companies that are responsible for the management of properties in the District of Columbia shall not be considered vendors. Those companies shall be considered consumers of all materials and services purchased to manage the property, including the services of subcontractors. Vendors, including subcontractors, providing materials and services to property management companies shall be required to collect the sales tax on the charges to these companies. For the purposes of this section, a property management company is a company providing mixed taxable and nontaxable services, such as real property maintenance and rent collection, to manage property for a contracted fee.

472.15 Property management companies providing real property maintenance services through their own employees shall not be required to collect the sales tax on the charges for these services.

472.16 Property management companies shall be considered vendors if they provide taxable services outside of the property management contract or if they solely provide taxable services, either through their own employees or through subcontractors. As vendors, they may issue a certificate of resale for the materials and services they purchase in accordance with § 472.12.

472.17 All other persons performing services usually provided by property management companies shall be considered consumers of all materials and services purchased to manage the property.

472.18 Real property maintenance services performed on the construction site shall not be considered "other services performed as part of construction." Real property maintenance services, such as trash hauling, window cleaning, building cleaning, or any of the services listed at §§ 472.2, 472.6, 472.8, 472.9, 472.10 and 472.11, performed on the construction site shall be subject to the District sales tax. "Other services performed as part of construction" includes such services as plumbing, wiring, masonry work, and other major repairs, additions, or improvements to real property.

472.19 A vendor purchasing real property maintenance services from another vendor may issue a resale certificate for the taxable services rendered. The certificate shall be preserved by the vendor accepting the certificate and shall be the authority for that vendor not to add reimbursement for the tax to the price of the service.

For example, Company A is performing a janitorial contract for XYZ Management Company. Included in the contract are services for window cleaning and trash removal. These services are subcontracted to B and C. Company A may issue a certificate of resale to B and to C. Neither B nor C would collect tax from Company A for the services they rendered. However, Company A would collect tax from XYZ.

History

• SOURCE: Final Rulemaking published at 36 DCR 8057, 8059 (November 24, 1989).

9 DCMR § 473 LANDSCAPING

473.1 Landscaping is the activity of arranging or modifying an area of land or natural scenery, by planting, removing or replacing plant life or by altering the contours of the ground. The services of landscaping and landscape construction, design, and architecture are taxable. Examples of services subject to tax under landscaping include, but are not limited to, the following:

(a) Landscape consultation, research, or design;

(b) Landscape site planning, analysis, or assessment;

(c) Selection of plant materials;

(d) Stump and tree removal;

(e) Transplanting trees, shrubs, and other vegetation; or

(f) Planting or replacing flowers, shrubs, trees or other vegetation.

473.2 Further examples of services which are taxable when performed under a landscaping contract include the following:

(a) Installation of railroad ties, timberwork, or stonework;

(b) Installation of fencing, patios, walkways, or decks;

(c) Installation of retaining walls, drainage, or sprinkler systems;

(d) Installation of ponds; or

(f) Grading and sodding.

473.3 Vendors providing landscaping services or performing landscaping contracts may issue a resale certificate on all tangible personal property that will be sold or transferred as part of the taxable service or taxable contract.

For example, a landscape contractor who purchases trees and shrubs for installation may issue a resale certificate for those materials.

473.4 Vendors providing temporary help to perform landscaping services shall be required to collect the sales tax on the charges for that service. The tax shall be collected even if the temporary help performs some inconsequential nontaxable services. However, vendors providing temporary help for nontaxable services shall not be required to collect the tax if that help also performs some inconsequential taxable landscaping services.

History

• SOURCE: Final Rulemaking published at 36 DCR 8057, 8064 (November 24, 1989).

9 DCMR § 474 DATA PROCESSING SERVICES

474.1 Gross receipts from the sale of or charges for data processing services shall be subject to the tax. For the purpose of this section, the term "data processing services" means the processing of information for the purpose of compiling and producing records of transactions, maintaining information, and entering and retrieving information. It also includes word processing, payroll and business accounting, and computerized data and information storage and manipulation.

474.2 Examples of data processing services include the following:

(a) Entry of inventory control data for a company;

(b) Maintenance of records of employee work time;

(c) Filing payroll tax returns;

(d) Preparing W-2 forms; or

(e) Computing and preparing payroll checks.

474.3 Data processing services shall not include the use of a computer by a provider of other services when the computer is used to facilitate the performance of the service or the application of the knowledge of accounting principles and tax laws. Purchasers of data processing services used to perform professional services, such as accounting and legal services, shall be considered consumers of the data processing services and thus shall be subject to the tax on the services.

474.4 Gross receipts from the sale, lease or rental, or maintenance of any computer software shall be subject to the tax regardless of whether the software is canned, prepackaged or customized. Examples of taxable computer software and software services include the following:

(a) System software;

(b) Application software;

(c) Computer programming;

(d) Software modification; or

(e) Software updating.

474.5 Data processing services performed, purchased, or delivered outside of the District but subsequently brought into the District for use or consumption shall be subject to the District use tax; Provided, that no sales tax was required to be paid to the other jurisdiction. Data processing services performed or delivered outside of the District for use within other jurisdictions as well as for use within the District shall be subject to the District use tax on a prorated share of the charge; Provided, that no sales tax was required to be paid on that prorated share to the other jurisdiction. Data processing services sold and delivered by the vendor to locations outside of the District shall be exempt from the sales tax.

474.6 Vendors providing data processing services may issue a resale certificate on all tangible personal property or services purchased for resale or rental either in the same form or for incorporation in the same form as a material part of other property or services being produced or provided for resale or rental.

For example, if a service were sold to the customer on magnetic tape, the tape may be purchased with a certificate of resale.

474.7 Vendors providing temporary help to perform data processing services, including consultation, computer programming, and software alteration, modification, and updating shall be required to collect the tax on these services. The tax shall be collected even if the temporary help performs some inconsequential nontaxable services. However, vendors providing temporary secretarial and clerical help who also perform some inconsequential data processing services shall not be required to collect the tax.

History

• SOURCE: Final Rulemaking published at 36 DCR 8057, 8065 (November 24, 1989).

9 DCMR § 475 INFORMATION SERVICES

475.1 Gross receipts from the sale or charges for information services shall be subject to the sales tax. For the purpose of this section, the term "information services" includes furnishing general or specialized news or current information by printed, mimeographed, electronic, or electrical transmission, or by utilizing wires, cables, radio waves, microwaves, satellites, fiber optics, or any other method now in existence or which may be devised, and electronic data retrieval or research.

475.2 Information which is gathered, maintained, or compiled and made available by the provider of the information service to the public or to a specific segment of industry for a consideration shall be subject to sales tax.

475.3 Information services, whether sold by subscription or on an as-needed basis, shall be taxable.

475.4 Information services shall include the following:

(a) Credit reports;

(b) Newsletters;

(c) Financial;

(d) Investment;

(e) Stock market;

(f) Bond rating reports;

(g) Wire service information;

(h) Scouting reports and surveys; and

(i) Real estate listings.

475.5 Charges to a person by financial institutions for account balance information shall not be subject to the tax.

475.6 The sale of information which is gathered or compiled on behalf a particular client shall not be subject to tax if the information is of a proprietary nature to that client and may not be sold to others by the person who gathered or compiled the information. However, this exclusion shall not apply to the sales of software which are taxable under § 474 of this chapter. Any subsequent sale of such information by the client for whom the information was gathered or compiled is subject to the tax.

475.7 Vendors providing information services may issue a resale certificate on all tangible personal property or services purchased for resale or rental either in the same form or for incorporation in the same form as a material part of other property or services being produced or provided for resale or rental. For example, if information is to be sold on a cassette tape, the vendor could purchase the tape with a resale certificate.

475.8 Information services performed, purchased, or delivered outside of the District but subsequently brought into the District for use or consumption shall be subject to the District use tax; Provided, that no sales tax is required to be paid to the other jurisdiction.

475.9 Information services performed or delivered outside of the District for use within other jurisdictions, as well as for use within the District shall be subject to a prorated share of the District use tax; Provided, that no sales tax was required to be paid on that prorated share to the other jurisdiction. Information services sold and delivered by the vendor to locations outside of the District shall be exempt from the sales tax.

475.10 Subscriptions to cable television shall not be considered to be information services and shall not be taxable.

475.11 Vendors providing temporary help to perform information services shall be subject to the tax on these services. The tax shall be collected even if the temporary help performs some inconsequential nontaxable services. However, vendors providing temporary help for nontaxable services shall not be required to collect the tax if that help also performs some inconsequential taxable information services.

475.12 Purchasers of information services used to perform professional services, such as accounting and legal services, shall be considered consumers of the information services and thus shall be subject to the tax on the services.

History

• SOURCE: Final Rulemaking published at 36 DCR 8057, 8067 (November 24, 1989).

9 DCMR § 476 ADMISSIONS, RENTALS OF BOATS, AND SALES OF FOOD, DRINKS, AND BEVERAGES on boats

The charges for admission to public events subject to gross sales tax under D.C. Official Code § 47-2001(n)(1)(H) shall be subject to gross sales tax when such public events occur on a boat.

If the services of a captain or operator are provided as part of the fee for the charter of any boat, no rental of the boat has occurred. If the boat is rented from one person and the services of the captain or operator rented from another, the gross sales tax shall apply to the boat rental.

A boat rented without the services of a captain or operator, including a bareboat charter, is a sale in which possession of tangible personal property is transferred, and the gross sales tax shall apply to such rentals.

The taxability of food and drink or alcoholic beverages sold on a boat is determined as follows:

(a) Gross receipts from the sales of food and drink or alcoholic beverages if made in any boat operating within the District in the course of commerce between the District and a state are exempt from the gross sales tax. Generally, a boat is operating in the course of commerce between the District and a state if the boat ties up at a dock outside of the District where any or all passengers or crew disembark or if any or all of the boat’s passengers or crew disembark the boat by other means and go ashore outside of the District.

Example: A boat that departs and returns to the same or different location in the District and does not tie up at a dock or allow passengers to disembark at a location outside of the District shall not be considered to be in the course of commerce between the District and a state, even if the boat enters another jurisdiction’s waters.

(b) In order to substantiate the exemption, a taxpayer must prove, via his or her books and records, that a boat is in the course of commerce between the District and a state. To the extent the taxpayer’s books and records do not substantiate that a boat is in the course of commerce between the District and a state, all sales of food and drink or alcoholic beverages allocated to the District shall be presumed taxable.

(c) For boats not operating in the course of commerce between the District and a state, a taxpayer shall substantiate in his or her books and records the allocation of sales of food and drink or alcoholic beverages between the District and non-District waters. All such allocations must be reasonable. To the extent the allocation of sales of food and drink or alcoholic beverages cannot be substantiated by the taxpayer’s books and records or the allocation on the taxpayer’s books is unreasonable, the Deputy Chief Financial Officer shall allocate the sales to the District.

If charges for admission to public events are included in the ticket price of a boat tour or boat cruise, but not separately stated or identified, the entire ticket price shall be subject to gross sales tax at the rate applicable to charges for admission to public events. If charges for taxable food and drink or alcoholic beverages are included in the ticket price of a boat tour or boat cruise, but not separately stated or identified, the entire ticket price shall be subject to gross sales tax at the rate applicable to charges for food and drink. If both charges for admission to public events and charges for taxable food and drink or alcoholic beverages are included in the ticket price of a boat tour or boat cruise, but not separately stated or identified, the entire ticket price shall be subject to gross sales tax at the rate applicable to food and drink. However, this rule does not apply where the value of the food and drink or alcoholic beverage included in the ticket price is de minimis.

For the purposes of this section, the following definitions apply.

“Bareboat charter” means providing a boat only, exclusive of crew.

“Boat” means a vessel for transport by water and includes, but is not limited to, ships, yachts, sailboats, rowboats, motorboats, kayaks, paddleboats, and canoes.

“Captain or operator” means a person who is master or commander of a boat with passengers or crew, or both.

“Dock” means a structure or group of structures involved in the handling of boats or ships, on or close to a shore and includes piers and wharfs.

History

• SOURCE: Final Rulemaking published at 61 DCR 4000 (April 18, 2014). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 476

9 DCMR § 477 [RESERVED]

9 DCMR § 478 STREET VENDOR PAYMENT IN PLACE OF COLLECTING AND REMITTING SALES TAX

478.1 A street vendor shall make payments to the Deputy Chief Financial Officer in place of collecting and remitting sales tax, as prescribed by this section, on sales made after September 30, 1993, regardless of the amount of taxable sales, if any, the street vendor makes during the year.

478.2 For the purposes of this section, the following terms shall have the meanings ascribed:

(a) Class "A license," "Class A temporary license," "Class B license," "Class B temporary license," "Class C nonfood license, "and "Class C food license" shall mean a Class A license, Class A temporary license, Class B license, Class B temporary license, Class C nonfood license, or Class C food license issued by the District of Columbia Department of Consumer and Regulatory Affairs and defined in § 6(b)(1) through § 6(b)(6) of A Regulation Governing Public Vending Space, enacted December 13, 1974 (Reg. 74-39; 24 DCMR §§ 502.4(a) through 502.4(f)); and

(b) "Street vendor" shall mean a holder of a Class A license, Class A temporary license, Class B license, Class B temporary license, Class C nonfood license, Class C food license, or any combination of these licenses.

478.3 A street vendor shall not collect and remit sales tax on any sales made in the District of Columbia after September 30, 1993.

478.4 A street vendor who files annual sales tax returns shall file a final sales and use tax return on or before November 20, 1993, for the period January 1, 1993 through September 30, 1993.

478.5 A street vendor who files monthly sales tax returns shall file a final sales and use tax return on or before October 20, 1993, for the month of September, 1993.

478.6 Beginning in 1994, on or before January 20th, April 20th, July 20th, and October 20th of each year, a holder of a Class A license, Class B license, Class C food license, Class C nonfood license, or any combination of these licenses, shall make a three hundred and seventy-five dollar ($ 375) payment to the Deputy Chief Financial Officer in place of collecting and remitting sales tax for the immediately preceding three (3) months.

478.7 An individual who holds a Class A or Class B temporary license after September 30, 1993 shall make a one hundred and twenty-five dollar ($ 125) payment to the Deputy Chief Financial Officer on or before the tenth (10th) day following the expiration of the individual's temporary license in place of collecting and remitting sales tax for the temporary license period.

478.8 An individual who holds a combination of licenses listed in § 478.6 or a combination of a license(s) listed in § 478.6 and a temporary license(s) listed in § 478.7, shall only be required to make a three hundred seventy five dollar ($ 375) payment on each prescribed payment date specified in § 478.6.

Example 1: A street vendor who sells food and sweatshirts has both a Class A license and a Class B license. The street is only required to make a three hundred and seventy-five dollar ($ 375) payment to the Deputy Chief Financial Officer on the prescribed payment dates.

Example 2: A street vendor who has a Class A license decides to obtain a Class B temporary license to sell Fourth of July souvenirs during the beginning of July. The vendor is only required to make a three hundred and seventy-five dollar ($ 375) payment to the Deputy Chief Financial Officer on the prescribed payment dates.

478.9 An individual who holds a combination of temporary licenses listed in § 478.7 shall only be required to make a one hundred and twenty-five dollar ($ 125) payment on the payment date prescribed in § 478.7, unless the temporary licenses expire on different days.

Example 1: A person obtains a Class A temporary license and a Class B temporary license. Both licenses expire on November 27, 1993. The individual is only required to make one (1) one hundred and twenty-five dollar ($ 125) payment on or before December 7, 1993.

Example 2: A person obtains a Class A temporary license on December 21, 1993, that expires on December 26, 1993. On December 24th, the individual obtains a Class B temporary license that expires on December 30, 1993. The individual must make a payment of one hundred and twenty-five dollars ($ 125) on or before January 5, 1994, and another payment of one hundred and twenty-five dollar ($ 125) on or before January 9, 1994.

478.10 A holder of a Class A license, Class B license, Class C food license, Class C nonfood license, or any combination of these licenses, who does not have a license for the full three (3) months preceding the month in which a payment in place of collecting and remitting sales tax is due shall pro rate his or her payment in place of collecting and remitting sales tax based upon the number of months, or fraction of a month, in the three (3) preceding months the individual held his or her license.

Example 1: An individual is granted a Class A license on December 15, 1993. The next payment is due January 20, 1994. The individual had a license for one (1) of the three (3) months preceding a month in which a payment is due. Consequently, the individual shall pay one third (1/3) of the quarterly payment in place of collecting and remitting sales tax, one hundred and twenty-five dollars ($ 125) ($ 375÷3).

Example 2: An individual who has a Class A license decides to terminate his or her license on January 21, 1994. The individual had a license for a fraction of one (1) month preceding the next month in which a payment was to be made (April 20, 1994). Consequently, the individual shall pay one-third (1/3) of the quarterly payment in place of collecting and remitting sales tax, one hundred and twenty-five dollars ($ 125) ($ 375÷3).

478.11 A corporation that remits sales tax on sales made by certain street vendors shall not collect and remit sales tax on sales made by street vendors after September 30, 1993, but shall collect and remit sales tax on its other taxable sales. Every street vendor shall be individually responsible for making all payments in place of collecting and remitting sales tax.

Example: A restaurant located in the District of Columbia employs a street vendor to sell its hot dogs from a cart on a District sidewalk. The restaurant is not required to report the sales of hot dogs from the cart after September 30, 1993, but is still required to report taxable sales made at its restaurant location.

478.12 Every payment in place of collecting and remitting sales tax shall be made in cash or by cashier's check, certified check or money order.

478.13 A street vendor may continue to purchase tangible personal property for resale exempt from District sales tax by completing a District of Columbia Certificate of Resale and presenting it to the seller at the time of purchase.

478.14 After September 30, 1993, a street vendor shall not be required to file a cash bond or prepayment with surety with the Deputy Chief Financial Officer.

478.15 After September 30, 1993, a street vendor who has filed a bond or prepayment with surety with the Deputy Chief Financial Officer for any period of time may file for a refund of his or her vendor bond or release of his or her prepayment with surety by filing with the Deputy Chief Financial Officer a Claim for Refund Form (FR-331). A street vendor seeking a refund of a bond shall attach to his or her Claim for Refund Form an original cashier's receipt that indicates the amount of the bond and the date the bond was paid.

478.16 The Deputy Chief Financial Officer shall review all requests for refunds of cash bonds or releases of prepayments with surety made pursuant to § 478.15 of this chapter. If the Deputy Chief Financial Officer determines that the street vendor is in compliance with all District tax laws, the Deputy Chief Financial Officer shall refund the street vendor's cash bond plus accrued interest or release the street vendor's prepayment with surety.

478.17 In accordance with D.C. Code § 47-3310(c)(2), as amended, the Deputy Chief Financial Officer shall pay six percent (6%) per annum interest on the amount of a street vendor's cash bond from the date the vendor filed the bond with the Deputy Chief Financial Officer until the date of refund, except, no interest shall accrue after December 31, 1993, and no more than six (6) years of interest in total shall accrue.

478.18 If a street vendor fails to make a payment in place of collecting and remitting sales tax on or before the payment date, any amount of unpaid payment shall be assessed and collected as unpaid sales tax.

478.19 The Deputy Chief Financial Officer may impose interest on an unpaid payment in place of collecting and remitting sales tax or unpaid portion of a payment in place of collecting and remitting sales tax at the rate of one and five tenths percent (1.5%) per month, or fraction of a month, from the prescribed payment due date until the full payment is made.

478.20 The Deputy Chief Financial Officer may impose a penalty on an unpaid payment in place of collecting and remitting sales tax or unpaid portion of a payment in place of collecting and remitting sales tax at the rate of five percent (5%) per month, or fraction of a month, from the prescribed payment due date until the full payment is made. The total amount of penalty may not exceed twenty-five percent (25%) of the amount of the unpaid payment.

478.21 The Deputy Chief Financial Officer shall not issue a "Certificate of Good Standing" to a street vendor who fails to do the following:

(a) Make all required payments in place of collecting and remitting sales tax and pay any associated interest and penalties; and

(b) Pay in full all other District tax liabilities, penalties and interest, if any.

History

• SOURCE: Final Rulemaking published at 40 DCR 7534 (October 29, 1993).

9 DCMR § 479 [RESERVED]

9 DCMR § 490 SALES AND USE TAXES ON THE SALE OF OR CHARGE FOR THE SERVICE OF PROCURING, OFFERING, OR ATTEMPTING TO PROCURE IN THE DISTRICT A JOB SEEKER FOR AN EMPLOYER OR EMPLOYMENT FOR A JOB SEEKER

490.1 Any sale of or charge for the service of procuring, offering, or attempting to procure in the District a job seeker for an employer or employment for a job seeker provided after May 31, 1994, shall be subject to the sales and use taxes imposed in accordance with § 125 of the District of Columbia Sales Tax Act and § 212 of the District of Columbia Use Tax Act, approved May 27, 1949 (63 Stat. 115 and 126; D.C. Code §§ 47-2002 and 47-2202).

490.2 The service of procuring, offering or attempting to procure a job seeker for an employer or employment for a job seeker shall include, but not be limited to, the following:

(a) Employment advice;

(b) Employment counseling;

(c) Employment testing, including but not limited to, typing, aptitude, and dictation testing;

(d) Resume preparation; and

(e) Any other related service.

490.3 Any sale of or charge for the service of procuring, offering or attempting to procure a job seeker for an employer or employment for a job seeker shall be subject to the tax if the service is performed in the District.

Example: An employment agency provides employment counseling to Customer C at its office located in the District. The service is performed in the District and the charge for the service shall be subject to the tax.

490.4 The sales and use tax shall be imposed on the total amount of any sale of or charge for the service of procuring, offering, or attempting to procure in the District a job seeker for an employer or employment for a job seeker.

Example: An employment agency administers an employment test for customer C. The employment agency bills Customer C twenty-five dollars ($ 25) for administering the employment test. At the time the employment agency bills Customer C for the employment test, the employment agency shall also bill for the sales tax on the twenty-five dollars ($ 25) charge for the employment test. The employment agency shall then remit the tax to the Deputy Chief Financial Officer in accordance with §§ 412 and 413 of this chapter and §§ 135 and 136 of the Sales Tax Act, approved May 27, 1949 (63 Stat. 118; D.C. Code §§ 47-2015 and 47-2016).

490.5 The vendor shall separately state on the bill the charge for any service performed in the District and indicate the amount of sales tax on the charge.

Example: An employment agency provides employment counseling, and employment advice and administers an employment test for Customer C. The counseling and advice are provided at the employment agency’s office Located in the District. The employment test is administered at the employment agency’s office located in Pennsylvania. The employment agency bills Customer C seventy-five dollars ($ 75) for all services: (1) twenty-five dollars ($ 25) for the counseling; (2) Twenty-five dollars ($ 25) for the advice; and (3) twenty-five dollars ($ 25) for the testing. The administration of the employment test was performed outside of the District and shall not be subject to the tax. However, the employment agency shall separately state on the bill the charge for the counseling and advice performed in the District and indicate the amount of the sales tax on those charges. At the time the employment agency bills for the counseling and advice, it shall also bill for the sales tax on the fifty dollars ($ 50) charge for the services performed in the District. The employment agency shall then remit the sales tax to the Deputy Chief Financial Officer in accordance with §§ 412 and 413 of this chapter and §§ 135 and 136 of the Sales Tax Act, approved May 27, 1949 (63 Stat. 118; D.C. Code §§ 47-2015 and 47-2016).

490.6 Failure to separately state the charges for any taxable service performed in the District shall result in the taxation of the total charge for all services provided by the vendor which include any services subject to the tax pursuant to § 490.1.

Example: A vendor provides employment counseling for a customer at its office located in the District and administers an employment test at its office located in Virginia. The vendor bills the customer sixty dollars ($ 60) for the services of providing the employment counseling and administering the test. Twenty dollars ($ 20) represents the fee for the employment counseling and forty dollars ($ 40) represents the fee for administering the employment testing. The bill only shows the total sixty dollars ($ 60) charge for the counseling and testing services. Although only the charge for the employment counseling would be subject to the tax under this section, the tax shall be imposed on the total sixty dollars ($ 60) charge since the bill does not separately state the fee for the taxable service.

490.7 Any vendor, as defined in § 493.5 of this chapter, that performs in the District the service of procuring, offering or attempting to procure in the District a job seeker for an employer or employment for a job seeker shall be considered to be engaged in business in the District.

Example: An employment agency administers a typing test at its office located in the District. The employment agency bills the customer twenty dollars ($ 20) for the typing test. The typing test is performed in the District and shall be subject to the sales tax. At the time the employment agency bills for the typing test, the employment agency shall also bill for the sales tax on the twenty dollars ($ 20) charge for the typing test. The employment agency shall remit the tax to the Deputy Chief Financial Officer in accordance with §§ 412 and 413 of this chapter and §§ 135 and 136 of the Sales Tax Act, approved May 27, 1949 (63 Stat. 118; D.C. Code §§ 47-2015 and 47-2016).

490.8 Any vendor, as defined in § 493.5 of this chapter, engaged in business in the District shall collect and remit the D.C. sales tax on any sale of or charge for the service of procuring, offering or attempting to procure in the District a job seeker for an employer or employment for a Job seeker.

490.9 The vendor shall collect the total sales tax imposed on the sale of or charge for the service of procuring, offering, attempting to procure in the District a job seeker with an employer or employment for a job seeker once the service has been rendered and the first bill, invoice or receipt of payment is sent to the purchaser.

Example A: A vendor provides employment counseling and advice and administers a typing and dictation test at its office located in the District. The vendor bills the client three hundred seventy-five dollars ($ 375) for the services rendered in the District. The vendor mails client the bill for a first payment of one hundred dollars ($ 100) due at the end of the month. The bill shall include the full amount of sales tax on the total three hundred seventy-five dollars ($ 375) fee for the services rendered. The vendor shall remit the tax to the Deputy Chief Financial Officer in accordance with §§ 412 and 413 of this chapter and §§ 135 and 136 of the Sales Tax Act, approved May 27, 1949 (63 Stat. 118; D.C. Code §§ 47-2015 and 47-2016).

Example B: A vendor provides employment counseling and advice and administers a typing and dictation test at its office located in the District. The cost for rendering those services in the District is three hundred seventy-five dollars ($ 375). The client pays for the service and is provided a receipt for payment. The receipt for payment shall include the full amount of the sales tax on the three hundred seventy-five dollars ($ 375) for the services rendered. At the time the vendor provides the client the receipt for payment, the vendor shall also collect the sales tax. The vendor shall remit the tax to the Deputy Chief Financial Officer in accordance with §§ 412 and 413 of this chapter and §§ 135 and 136 of the Sales Tax Act, approved May 27, 1949 (63 Stat. 118; D.C. Code §§ 47-2015 and 47-2016).

Example C: A vendor provides employment counseling and advice and administers a typing test at its office located in the District. The vendor bills the client three hundred seventy-five dollars ($ 375) for the services rendered in the District. The vendor mails its client the bill for full payment of the three hundred seventy-five dollars ($ 375) charge for the services rendered in the District. The bill shall include the full amount of the sales tax on the charge for the services rendered in the District. The vendor shall remit the sales tax to the Deputy Chief Financial Officer in accordance with §§ 412 and 413 of this chapter and §§ 135 and 136 of the Sales Tax Act, approved May 27, 1949 (63 Stat. 118; D.C. Code §§ 47-2015 and 47-2016).

490.10 Any purchaser that pays for the service of procuring, offering or attempting to procure in the District a job seeker for an employer or employment for a job seeker for which the sales tax was not collected and remitted to the Deputy Chief Financial Officer shall be subject to the use tax and shall remit the tax in accordance with § 215 of the Use Tax Act, approved May 27, 1949 (63 Stat. 127; D.C. Code § 47-2205).

Example: An employment agency provides employment counseling and advice at its office located in the District. The employment agency bills The customer seventy-five dollars ($ 75) for the counseling and advice. If at the time the employment agency bills the customer for the counseling and advice the employment agency fails to bill for the sales tax on the seventy-five dollars ($ 75) charge, the customer shall become liable for the use tax and shall remit the tax to the Deputy Chief Financial Officer.

490.11 Any sale of or charge for the service of procuring, offering, or attempting to procure a job seeker for an employer or employment for a job seeker that is performed outside of the District shall not be subject to the tax.

Example: An employment agency provides employment counseling to customer C at its office located in Wisconsin. The employment agency bills Customer C sixty dollars ($ 60) for the counseling. The service was performed outside of the District. Therefore, the sale for or charge of the service shall not be subject to the tax.

History

• SOURCE: Final Rulemaking published at 44 DCR 985 (February 21, 1997).

9 DCMR § 491 SALES AND USE TAXES IMPOSED ON THE SALE OF OR CHARGE FOR PLACING A JOB SEEKER WITH AN EMPLOYER IN THE DISTRICT

491.1 The sale of or charge for placing a job seeker with an employer in the District which is provided after May 31, 1994, shall be subject to the sales and use taxes imposed in accordance with § 125 of the District of Columbia Sales Tax Act and § 212 of the District of Columbia Use Tax Act, approved May 27, 1949 (63 Stat. 115 and 126; D.C. Code §§ 47-2002 and 47-2202).

491.2 The sales and use tax shall be imposed on the total amount of the sale of or charge for placing a job seeker with an employer in the District.

Example: A vendor located in Virginia seeks and locates a secretarial position in the District for a customer. The vendor places the customer in the secretarial position in the District. The placement of the customer occurs in the District and the fee charged for the placement of the customer in the secretarial position in the District shall be subject to the tax.

491.3 The vendor, as defined in § 493.5 of this chapter, shall separately state on the bill the charge for any placement in the District and indicate the amount of sales tax on the charge.

Example: An employment agency located in Wisconsin provides Customer C: employment testing, employment counseling and employment advice and places Customer C in a position located in the District. The testing, counseling, and advice are provided at the employment agency's office located in Wisconsin. Customer C is placed with an employer in the District. The employment agency bills Customer C two hundred dollars ($ 200) for all services: (1) twenty-five dollars ($ 25) for the testing; (2) twenty-five dollars ($ 25) for the counseling; (3) twenty-five dollars ($ 25) for the advice; and (4) one hundred twenty-five dollars ($ 125) for the placement fee. The employment agency shall separately state on the bill the charge for the placement in the District and indicate the sales tax amount on that charge. At the time the employment agency bills for the one hundred twenty-five dollars ($ 125) charged for the placement, it shall also bill for the sales tax on the one hundred twenty-five dollars ($ 125) charge for the placement. The sales tax shall be remitted to the Deputy Chief Financial Officer in accordance with §§ 412 and 413 of this chapter and §§ 135 and 136 of the Sales Tax Act, approved May 27, 1949 (63 Stat. 118; D.C. Code §§ 47-2015 and 47-2016).

491.4 Failure to separately state the charges for any service subject to the tax pursuant to § 491.1 of this chapter shall result in the taxation of the total charge for all services provided by the vendor which include any services subject to the tax pursuant to § 491.1.

Example: An employment agency administers an employment test to a customer at its office located in Virginia. Later the agency searches for and locates in the District a management position for the customer. The customer is placed in the management position in the District and the employment agency bills the customer three hundred seventy-five dollars ($ 375) for the services provided in the District. Seventy five dollars ($ 75) represents the fee for administering the employment test and three hundred dollars ($ 300) represents the fee for the placement. The bill only shows the total three hundred seventy-five dollars ($ 375) fee for all services rendered. Although only the charge for the placement fee would be subject to the tax, the tax shall be imposed on the total three hundred seventy-five dollars ($ 375) fee for the employment testing and placement since the bill does not separately state the charge for the taxable service.

491.5 Any vendor, as defined in § 493.5 of this chapter, engaged in business in the District shall collect and remit to the Deputy Chief Financial Officer the sales tax on any sale of or charge for the placement of a job seeker with an employer in the District.

491.6 Any purchaser that pays for the service of placing a job seeker with an employer in the District for which the sales tax was not collected and remitted to the Deputy Chief Financial Officer shall be subject to the use tax and shall remit the tax in accordance with § 215 of the Use Tax Act, approved May 27, 1949 (63 Stat. 127; D.C. Code § 47-2205).

Example A: An employment agency located in Texas places a job seeker also located in Texas with its client employer located in the District. The employment agency bills the client employer two hundred dollars ($ 200) for the placement. The placement occurred in the District and shall be subject to the sales tax. If at the time the employment agency bills the client employer for the two hundred dollars ($ 200) placement charge, the employment agency fails to bill for the sales tax on the two hundred dollars ($ 200) charge, the client employer shall become liable for the use tax and shall remit the tax to the Deputy Chief Financial Officer.

Example B: An employment agency located in Virginia places its client job seeker also located in Virginia with an employer located in the District. The employment agency bills the client job seeker two hundred dollars ($ 200) for the placement. The placement occurs in the District and shall be subject to the tax. If at the time the employment agency bills the client job seeker for the two hundred dollars ($ 200) placement charge the employment agency fails to bill for the sales tax on the charge, the client job seeker shall become liable for the use tax and shall remit the tax to the Deputy Chief Financial Officer.

491.7 Any sale of or charge for a placement of a job seeker with an employer located outside of the District shall not be subject to the tax.

Example: All employment agency located in the District places a job seeker also located in the District with its client employer located in Virginia. The placement occurs outside of the District and shall not be subject to the tax.

History

• SOURCE: Final Rulemaking published at 44 DCR 985, 989 (February 21, 1997).

9 DCMR § 492 EXEMPTIONS

492.1 The sale of or charge for any service of procuring, offering, or attempting to procure in the District a job seeker for an employer or employment for a job seeker or the service of placing a job seeker with an employer in the District to the United States or the District of Columbia governments, or any instrumentality of either, shall be exempt from the tax, in accordance with § 417 of this chapter, if the vendor has provided proof of payment by and a purchase order from the United States or District of Columbia governments, or the instrumentality of either and has shown on the record of sale the following:

(a) The instrumentality or agency to which the sale was made;

(b) The amount of the sale; and

(c) The date of the sale.

492.2 The sale of or charge for any service of procuring, offering, or attempting to procure in the District a job seeker for an employer or employment for a job seeker or the service of placing a job seeker with an employer in the District to a semipublic institution for which the semipublic institution has presented a valid District of Columbia certificate of exemption shall be exempt from the tax, in accordance with §§ 417 and 418 of this chapter, if the vendor has provided proof of payment by the semipublic institution.

492.3 The sale of or charge for any service of procuring, offering, or attempting to procure in the District a job seeker for an employer or employment for a job seeker or the service of placing a job seeker with an employer in the District to a foreign government agency, diplomat, or employee or military personnel for which a valid United States Department of State Missions Tax Exemption Card or United States Department of State Tax Exemption Card issued pursuant to the Foreign Missions Act (22 U.S.C. 4310 shall be exempt from the tax, in accordance with § 419 of this chapter.

History

• SOURCE: Final Rulemaking published at 44 DCR 985, 991 (February 21, 1997).

9 DCMR § 493 SALES PRICE: COMMUNICATION SERVICES

For purposes of D.C. Official Code § 47-2001(p)(2), the term "sales price" shall not include a charge for a nontaxable service that is made in connection with a sale of a taxable communication service, even if the nontaxable charges are aggregated with and not separately stated from the taxable charges for communication services, if the vendor can reasonably identify charges not subject to tax from its books and records that are kept in the regular course of business.

History

• SOURCE: Final Rulemaking published at 51 DCR 6029 (June 11, 2004).

9 DCMR § 494 [RESERVED]

9 DCMR § 495 [RESERVED]

9 DCMR § 496 BALLPARK SALES TAXES (PERMANENT BASEBALL ACT)

496.1 In general. The regulations in this section apply for purposes of the Ballpark sales taxes described in section 110 of the Ballpark Omnibus Financing and Revenue Act of 2004 ("Act").

Question 1: What does the term "Ballpark" mean under the Act?

Answer 1: For the calendar year 2008 and thereafter, the term "Ballpark" means the stadium

constructed on the site described in D.C. Official Code § 47-2002.05(a)(1)(B), the facilities constructed on the site that are part of or physically connected to that stadium, the parking facilities, and the facilities and improvements on that site that provide service vehicle and fan access.

496.2 Ticket Sales Under the Act for the Ballpark.

Question 1: What is the total rate of Ballpark sales tax imposed on tickets sold for any public event held at the Ballpark?

Answer 1: District law, as amended by the Act, imposes a total sales tax of 10% on the gross receipts derived by any person from ticket sales to any public event held at the Ballpark unless exempted under D.C. Code § 47-2001 (n)(1)(H). This total sales tax of 10% ("the 10% sales tax") is the sum of the general sales tax of 5.75% imposed by D.C. Official Code §47-2002, plus an additional sales tax of 4.25%. D.C. Official Code § 47-2002, 2002.05(b), (d)(2).

Question 2: Who qualifies as a "person" referred to in Answer 1?

Answer 2: A person referred to Answer 1 is (a) any individual, trust, estate, partnership, association, company, corporation, or other entity that sponsors a public event to be performed at the Ballpark ("Sponsor"), and (b) any such person other than the Sponsor (whether related or not) that is engaged or allowed by the Sponsor to sell tickets to that event (including an agent or independent contractor) and any sub-agent or independent contractor thereof. Thus, the obligation to collect the 10% sales tax applies, for example, whether the sale takes place at a box office or over the phone or on the Internet and whether the seller is a professional baseball team or is an agent selling on behalf of such a team.

Question 3: Under the Act, what is a public event that is performed at the Ballpark?

Answer 3: A public event performed at the Ballpark includes baseball games, baseball-related events and exhibitions, Special Events, and Commission Events.

Question 4: What is a Special Event or a Commission Event?

Answer 4: A Special Event is performed pursuant to a Rental Promotion Agreement promoted or managed by third parties under a contract with the Washington Nationals (the "Team"), as described in Section 2.3(b) of the Lease Between the D.C. Sports and Entertainment Commission ("Commission") and Baseball Expos, L.P., dated March 6, 2006 (the "Lease").

A Commission Event is an event other than a professional baseball game sponsored, promoted, or facilitated by the Commission, as described in Section 8.2 of the Lease.

Question 5: Does the 10% sales tax apply to ticket sales made by the Team or the Commission to a person that intends to resell those tickets at retail to third parties?

Answer 5: Yes. D.C. Official Code § 47-2002.05(b) and (d)(2) requires the Team, the Commission, or any other person described in Answer 2, to collect the tax on the gross receipts that it derives from selling tickets to any public event at the Ballpark, regardless of whether the tickets are sold to a person who resells the tickets to another person. Therefore, D.C. Official Code §47-2001(n)(1) (which exempts from sales tax certain sales of tangible personal property intended for resale) does not apply to the above sales.

Question 6: Assume the Team contracts with an agent to sell baseball tickets to the public on the Team's behalf. The agent does not acquire title to the tickets. Assume the agent sells a baseball ticket for a total of $110, which includes $10 of sales tax, and pays the $110 to the Team. How much of the $110 received by the Team from the agent is subject to sales tax?

Answer 6: Under District law the $10 of tax is not subject to sales tax. D.C. Official Code §47- 2001(p)(2)(D). Thus, the Team must pay a 10% sales tax only on the $100 and must pay to the District the $10 of sales tax received from the agent.

Question 7: Assume the same facts as in question 6, except that the Team pays the agent a commission in exchange for the agent's services. Does District law levy the 10% sales tax on the total gross receipts from ticket sales made by the agent or on those receipts less the commission paid to the agent?

Answer 7: District tax regulations provide that discounts allowed to a sales agent as compensation for ticket sales are selling expenses. Therefore, the Team cannot deduct discounts and similar compensation in determining the amount of gross receipts subject to sales tax. See D.C. Mun. Regs. tit. 9, §430.4(1998). Thus, District law levies the 10% sales tax on the total gross receipts derived by the Team from the sale of the tickets without any reduction for the agent's commission.

Question 8: Assume that the agent has a contract with the Team to sell tickets and to receive a 5% commission from the Team on the gross receipts from the sale. For purposes of calculating the agent's commission, gross receipts from the sale of the tickets do not include the tax included in the price of the tickets. The agent sells the tickets for a total price of $110 which includes $10 of sales tax (10% of $100). The agent retains $5 as its commission (5% of $100) and pays $105 to the Team. What are the total gross receipts subject to the sales tax, and how much sales tax must be paid by the Team?

Answer 8: The total gross receipts subject to the 10% sales tax are $100, and therefore, the Team must pay $10 (10% of $100) of sales tax to the District.

Question 9: Assume the same facts as in Question 8, except the agent conducts no business and has no physical presence in the District. Are the ticket sales made by the agent under these facts still subject to the 10% sales tax?

Answer 9: Yes. The agent's activities are imputed to the Team which does have a physical presence in the District. The Team will be responsible for that tax as the principal.

Question 10: Assume the Team licenses to a corporation a private suite containing ten seats at the Ballpark for the Major League Baseball ("MLB") season at a cost of $30,000. As a condition of the license, the Team requires that the corporation buy season tickets for the ten seats at a cost of $81,000 ($100 face value per ticket x 10 seats x 81 games). On what amounts does District law impose the 10% tax on tickets?

Answer 10: The 10% sales tax on tickets applies only to the $81,000. No sales tax applies to the remaining $30,000 of gross proceeds because that amount is not paid for the right to enter the Ballpark. See D.C. Official Code § 47-2002.05(a)(4) (defining the term "ticket"). Instead, the $30,000 is for the long-term right to use real property, the suite. District law only imposes sales tax on the proceeds from leases of "tangible personal property," not real property. See D.C. Official Code §47-2001(n)(1)(F).

Question 11: Assume the same facts as in question 10, except the Team licenses to a corporation a private suite at the Ballpark for a flat fee of $111,000. In addition to obtaining the use of the suite, the payment of that fee entitles ten individuals designated by the corporation to be admitted to the Ballpark for each game during the MLB season? Does the term "ticket" include the right to enter the Ballpark as a result of licensing a private suite at the Ballpark?

Answer 11: Yes. D.C. Official Code § 47-2002.05 (a)(4). The 10% sales tax on ticket sales applies to that portion of the gross receipts received by the Team from selling, leasing, or licensing private suites at the Ballpark that are attributable to the face value of the admission tickets for seats in those suites.

For example, assume that the face value of an admission ticket for a seat in that suite is $100 per game. Since the Team will play 81 homes games at the Ballpark during the regular season, the amount of gross receipts subject to the 10% sales tax will be $81,000 (10 seats x $100 per game x 81 games). The Team would collect and pay over this sales tax to the District. No sales tax applies to the remaining $30,000 of gross proceeds because those proceeds are not paid for the right to enter the Ballpark.

Question 12: On what amount is the 10% tax on the sale of baseball tickets imposed if the face value of the admission tickets for seats in a private suite is substantially below an arm's length sales price?

Answer 12: If the face value of the admission tickets for seats in a private suite is substantially below an arm's length sales price, the Office of Tax and Revenue ("OTR") shall increase the portion of the total gross receipts received for the private suite that is attributable to the seats to reflect an arm's length price on which the 10% sales tax will be imposed.

Question 13: When does the 10% sales tax imposed by District law begin to apply to sales of tickets to public events at the Ballpark?

Answer 13: The 10% sales tax on tickets applies to any tickets sold for public events that are held at the Ballpark during the calendar year 2008 and thereafter unless exempted under D.C. Code § 47-2001(n)(1)(H).

496.3 Sales of Tangible Personal Property and Services at the Ballpark Under the Permanent Baseball Act.

Question 1: What Ballpark sales tax applies to gross receipts from sales by any person of parking or storing motor vehicles ("parking") during such times as reasonably relate to the performance of baseball games or baseball-related events and exhibitions at the Ballpark.

Answer 1: The rate is 12% on sales of such parking including valet parking services. D.C. Official Code §§47-2002(1), 2002.05(d)(4).

Question 2: What Ballpark sales taxes apply to gross receipts from sales at the Ballpark by any person of (a) services enumerated in D.C. Code § 47-2001(n)(1) other than parking ("other enumerated services"), (b) food and drink prepared for immediate consumption ("food and drink") at the Ballpark, (c) beer, wine, and spirituous or malt liquors ("alcoholic beverages") sold for consumption at the Ballpark, and (e) tangible personal property other than the above food and drink and alcoholic beverages ("other tangible personal property"), during such times as reasonably relate to the performance of baseball games or baseball-related events and exhibitions at the Ballpark.

Answer 2: 10% on sales of other enumerated services at the Ballpark, 10% on sales of food and drink at the Ballpark, 10% on alcoholic beverages consumed at the Ballpark, and 10% on sales of other tangible personal property at the Ballpark. D.C. Official Code §§47-2002(3)(A)-(B), 2002.02(2)(A-B), 2002.05(c). The total sales tax of 10% ("the 10% sales tax") on sales of other enumerated services and on sales of other tangible personal property is the sum of the general sales tax of 5.75% imposed by D.C. Official Code §47-2002, plus an additional sales tax of 4.25%. D.C. Official Code § 47-2002, 2002.05(c),(d)(3).

Question 3: When are services described in Question 2 considered sold at the Ballpark for purposes of the Act?

Answer 3: Services are considered sold at the Ballpark for purposes of the Act when those services are performed at the Ballpark.

Question 4: Do the rates in Answers 1 and 2 apply to sales only on days when baseball games or baseball-related events or exhibitions are scheduled at the Ballpark, or do they also apply to any other days that reasonably relate to such games, events, or exhibitions at the Ballpark?

Answer 4: These rates apply to sales at the Ballpark of the items described in Questions 1 and 2, on or after March 30, 2008, during such times that reasonably relate to the performance of baseball games or baseball-related events or exhibitions at the Ballpark.

Question 5: When are sales of the items described in Questions 1 and 2 considered to be reasonably related to the performance of baseball games or professional baseball-related events and exhibitions at the Ballpark?

Answer 5: Whether or not these sales are considered reasonably related to baseball games or baseball-related events and exhibitions performed there is a factual question. In general, except for sales of parking described in Question 22 below, such sales reasonably relate to the performance of baseball games or baseball-related events and exhibitions at the Ballpark if made: (a) on any day during the Major League Baseball ("MLB") season, and (b) on any day in the off-season that a baseball game or baseball-related event or exhibition is held at the Ballpark. However, other enumerated services performed at the Ballpark during the off-season

that are necessary or desirable to permit the performance of such games, events, or exhibitions there, even if done in the off-season, are sales of services reasonably related to such baseball games and baseball-related events or exhibitions. Examples would include real property maintenance services performed on the baseball diamond or the outfield grass.

Question 6: What is the MLB season, and what is the off-season?

Answer 6: The MLB season begins on the earliest day of the calendar year on which the first regular season game is scheduled to be played by any MLB team. The season ends immediately after the last day that any regular season game is played by a MLB team during that year. If the Team qualifies for post-season play, the MLB season shall continue until the day after the Team completes post-season play. However, the MLB season does not include any day on which a Special Event or Commission Event is performed at the Ballpark, provided that no professional baseball game is also scheduled to be played at the Ballpark on that day.

The off-season includes any day during the year that is not part of the MLB season.

Question 7: Under the Act what do the words "baseball games" performed at the Ballpark mean?

Answer 7: Baseball games include Team home games during the regular MLB season, post- season games, All-Star games, spring training games, and exhibition games performed by professional baseball teams at the Ballpark. They also include baseball games performed at the Ballpark by non-professionals.

Question 8: Under the Act what does the phrase "baseball-related events or exhibitions" at the Ballpark mean?

Answer 8: Baseball-related events or exhibitions at the Ballpark include (a) Team practices that are open to the public; (b) theme events organized by the Team's fans or sponsors related to baseball; (c) Team-sponsored baseball, baseball clinics, fan-related events or activities; and (d) similar occurrences related to amateur or college baseball sponsored by persons other than the Team.

Question 9: What sales of other tangible personal property at the Ballpark during such times as reasonably relate to the performance of baseball games or baseball-related events or exhibitions at the Ballpark are subject to the 10% sales tax?

Answer 9: Sales by any person at the Ballpark subject to this 10% tax include sales of other tangible personal property, such as, jerseys, memorabilia, novelties, pennants, souvenirs, and other products ("souvenirs") as well as electricity, heating oil, and natural gas.

Question 10: What rates of sales tax apply to sales of items described in Questions 1 and 2 during such times that do not reasonably relate to the performance of baseball games or baseball- related events or exhibitions at the Ballpark?

Answer 10: The rates are 12% on sales of motor vehicle parking services, 5.75% on sales of other enumerated services, 10% on sales of food and drink, 10% on sales of alcoholic beverages, and 5.75% on sales of all other tangible personal property. D.C. Official Code §§ 47-2002(1), (3)(A)-(B), 2002.02(2)(A)-(B). These taxes must be reported and paid over the District separately from Ballpark sales taxes. See D.C. Mun. Regs. Tit.9, §496.4 (2008).

Question 11: Assume the Team grants a vendor the right to sell souvenirs at the Ballpark during the entire year including all periods that reasonably relate to the performance of baseball games or baseball-related events or exhibitions ("Baseball Times") at the Ballpark. In exchange for this right, the vendor must pay a royalty to the Team. On whom does District law impose the 10% sales tax?

Answer 11: The vendor must collect and pay over to the District the 10% Ballpark sales tax on the total gross receipts (unreduced by any royalties paid to the Team) derived from sales of souvenirs during Baseball Times. The vendor must collect and separately pay over a 5.75% sales tax on such gross receipts in case of sales made during any other times. See D.C. Mun. Regs. Tit.9, §496.4 (2008).

Question 12: Do sales of other tangible personal property at the Ballpark include sales by the Team of the media distribution rights to baseball games at the Ballpark or sales by the Team of the rights to televise, broadcast, transmit, record, advertise, promote, or create descriptions or accounts, of baseball games held at the Ballpark?

Answer 12: No. Sales of these rights at the Ballpark during Baseball Times do not qualify as sales of other tangible personal property. They are sales of intangible property rights. Therefore, the 10% sales tax on gross receipts from sales of other tangible personal property at the Ballpark does not apply to sales at the Ballpark of the above rights.

Question 13: Do sales at the Ballpark of, for example, films, sound recordings on CDs, or video tapes, or other storage media of baseball games during Baseball Times qualify as sales of other tangible personal property subject to the 10% Ballpark sales tax?

Answer 13: Yes, except for rentals of these items to theatres and radio and television broadcasting stations. D.C. Official Code §47-2001(n)(1)(F).

Question 14: The Team owns the rights to sell temporary day-of-game electronic advertising in designated areas inside the Ballpark. The Team retains the gross receipts from these sales. In the case of electronic advertising the Team uses its own computer property (or property it controls pursuant to its Lease of the Ballpark) to project the advertiser's display on an electronic scoreboard or other electronic billboard inside the Ballpark. Do sales by the Team of the right to display such advertising qualify as sales at the Ballpark of other tangible personal property or of other services subject to the 10% sales tax?

Answer 14: No. Under District law a "sale" includes any transaction for consideration in which selected services are rendered or title or possession of tangible personal property is transferred by any means including a rental, lease, license, or sale. D.C. Official Code §47-2001(q). Here, the advertiser does not obtain direct use of the Team's property or property under the Team's control. The fees derived by the Team from electronic advertising are received in exchange for the Team displaying the advertiser's message on an electronic scoreboard or billboard using the Team's own property (or property which it controls pursuant to the Lease). This act by the Team is a service.

Before the passage of the Act, this type of service did not qualify as the sale of an information service or any other "selected service" subject to District sales tax. D.C. Official Code §§47-2001(n)(1), 2002. The Act generally does not expand the scope of services subject to the sales tax to include electronic displays of advertisers' messages. Therefore, the gross receipts received by the Team from displaying electronically an advertiser's message are not subject to the 10% sales tax.

Question 15: Assume the same facts as in question 15, except the Team also owns the rights to sell non-electronic, temporary day-of-game or permanent advertising and signage ("signs") in designated areas inside the Ballpark. Assume the designated areas include the outfield fences, certain stadium walls, and other permanent structures erected intentionally for the purpose of displaying the signs. Either the advertiser or the Team installs the signs in the designated areas. Do sales by the Team of the right to display such signs qualify as sales at the Ballpark of other tangible personal property or of other services subject to the 10% sales tax?

Answer 15: The signs are tangible personal property. By paying the Team, the advertiser obtains the right to use space to display the signs in designated areas of the Ballpark that qualify as real property. District law only imposes sales tax on gross receipts derived from renting or leasing tangible personal property. Since the Team is renting real property rather than tangible personal property, the Team is not subject to sales tax on gross receipts received from advertisers to display signs in designated areas of the Ballpark. D.C. Official Code §47-2001(n)(1)(F).

Question 16: Assume the same facts as in question 15, except that the Team also sells the rights to display signs on temporary structures inside the Ballpark.

The temporary structures are removed at the end of the MLB season or during public events at the Ballpark not involving baseball games. Do sales by the Team of the right to display signs on temporary structures inside the Ballpark qualify as sales of other tangible personal property or of other services subject to the 10% sales tax?

Answer 16: The temporary structures are not real property but other tangible personal property. Gross receipts received for the right to display advertising on these temporary structures are payments for the right to use (rent) space on the temporary structures and therefore are sales of tangible personal property subject to the 10% Ballpark sales tax.

Question 17: Assume the Team also sells advertising space in its game-day programs (magazines). The programs are sold to fans attending a baseball game at the Ballpark. Are the gross receipts derived by the Team from selling this advertising space or from selling game-day programs subject to the 10% tax on sales of other tangible personal property?

Answer 17: Before the passage of the Act, District law did not impose its sales tax on gross receipts from the sale of advertising space in game-day programs. Instead, it levied the sales tax on gross receipts from sales to the ultimate consumer of programs containing that advertising. D.C. Mun. Regs. tit.9, §452.3 (1998). The Act does not change this result. Therefore, District law requires the Team to pay the 10% Ballpark sales tax on gross receipts from sales of game- day programs but not on gross receipts from the sale of advertising in those programs.

Question 18: The Lease between the Team and the Commission authorizes the Team to select a third-party parking management company ("Parking Manager") approved by the Commission to manage and operate the parking facilities at the Ballpark in return for a parking management fee. The Parking Contract requires the Parking Manager to make all parking spaces available to parkers for a fixed charge during a block of hours beginning before and ending after any baseball games, baseball-related events and exhibitions, Special Events, or Commission Events performed at the Ballpark. The Lease provides that the Team will generally receive from the Parking Manager the net parking revenues from any baseball game, baseball-related event or exhibition, and Special Event. The Commission will receive the net parking revenues from Commission Events, with certain adjustments and limitations. Net parking revenues are the gross receipts from parking, less the sum of the parking management fee and any applicable sales or other excise taxes.

Are the parking gross receipts collected by the Parking Manager from selling parking (including valet parking services, if any) at the Ballpark during Baseball Times or during the performance of Special Events subject to District sales tax?

Answer 18: Yes. The Parking Manager must collect and pay over to the District a 12% Ballpark sales tax on the total gross receipts derived by any person from selling at the Ballpark during Baseball Times the above motor vehicle parking services. It must also collect and separately pay over to the District a 12% sales tax on parkers attending Special Events at the Ballpark. See D.C. Mun. Regs. Tit.9, §496.4 (2008).

Question 19: Since the Commission is an independent agency of the D.C. government and exempt from all D.C. taxes, are the parking gross receipts collected by the Parking Manager from selling parking during Commission Events performed at the Ballpark subject to District sales tax?

Answer 19: Yes. Because the Parking Manager is not an instrumentality of the Commission and is selling this parking, it must collect and pay over this 12% tax to the District.

Question 20: Since the Parking Manager collects a fixed charge per vehicle which includes both the sales tax for parking and the parking management fee, how much of that charge is subject to the 12% tax?

Answer 20: The total gross receipts subject to the 12% tax are equal to the total of the fixed charges collected less only the embedded sales tax.

Question 21: Except for the block of hours reserved for parkers attending baseball games, baseball-related events and exhibitions, Special Events, or Commission Events, the Lease requires that the parking facilities at the Ballpark must be made available for public parking on a monthly, hourly, or other basis. The Commission and the Team share the net parking revenues from these sales of parking under a formula. Are the gross receipts received from these public parkers subject to District sales tax?

Answer 21: Yes. The Parking Manager is responsible for collecting and paying a 12% sales tax to the District on these receipts less only the embedded sales tax.

Question 22: Is the parking sold by the Parking Manager in Question 21 reasonably related to the performance of baseball games or baseball-related events or exhibitions, Special Events, or Commission Events at the Ballpark?

Answer 22: No.

Questions 23: Assume the Team sells parking to baseball season ticket holders in lots and garages not at the Ballpark, must the Team collect and pay over to the District the 12% Ballpark sales tax on these sales?

Answer 23: Yes.

Question 24: In selling season tickets to professional baseball games, assume the Team also offers season ticket holders the option of buying preferential parking at the Ballpark in lots managed by the Parking Manager's employees. The Team pays the parking management fee on those sales to the Parking Manager and retains the balance of parking charge received for preferential parking. Who is obligated to collect and pay over the sales tax on the receipts attributable to parking?

Answer 24: The Team must collect and pay over the 12% Ballpark sales tax on the total gross receipts received from season ticket holders unreduced by the parking management fee paid to the Parking Manager.

Question 25: Assume the Team licenses to a corporation a private suite at the Ballpark containing 10 seats for use during the MLB season at a cost of $39,000. The Team also requires the corporation to buy season tickets for the ten seats as a condition of receiving the license. Of the $39,000, $30,000 is for the long-term right to use the suite, and $5,000 (which includes sales tax) is for the cost of food provided by the Team. The remaining $4,000 (which includes sales tax) is for parking provided to the suite occupants by the Team on Ballpark lots managed by the Parking Manager. Is the cost of the food and the parking subject to sales tax?

Answer 25: Yes. The charges for food and parking are not charges for leasing, licensing, or purchasing private suites. The $5,000 for food less the embedded tax is subject to the 10% Ballpark sales tax, and the $4,000 for parking less the embedded tax is subject to the 12% Ballpark sales tax.

Question 26: Assume the Team has granted a vendor (the "Concessionaire") the right to operate food and beverage concessions and provide catering services at the Ballpark during both the MLB season and the off-season. The Concessionaire is neither an instrumentality nor a partner of the Commission. The Concessionaire charges a sales price for food and beverages and catering services that includes a sales tax. In exchange for this concession, the Team requires the Concessionaire to pay it a certain percentage of the receipts derived by the Concessionaire from selling the above food and beverages and catering services except during Commission Events. Receipts for this purpose are an amount equal to the total gross receipts received by the Concessionaire from selling the above items, minus the sales tax included in the sales price, and minus certain other expenses incurred by the Concessionaire.

On what amount of receipts derived from sales at the Ballpark of food and beverages and catering services during Baseball Times, must the Concessionaire pay the Ballpark sales tax?

Answer 26: The gross receipts subject to the 10% Ballpark sales tax are the total gross receipts collected less the embedded sales tax with no reductions for any expenses incurred by the Concessionaire or for any receipts paid by the Concessionaire to the Team.

Question 27: The Lease authorizes the Commission to receive generally all of the proceeds from the sale of concessions at the Ballpark on the day of a Commission Event. Assume the same facts as in Question 26, except that it is the Commission that has entered into an agreement with the Concessionaire to share the proceeds from selling food and beverages and catering services on the day of the Commission Event. Are gross receipts from the above sales subject to District sales tax.

Answer 27: Yes. Since the Concessionaire is not an instrumentality of the Commission, gross receipts subject to the sales tax are the total gross receipts collected less only the embedded sales tax.

Question 28: The Lease vests in the Team the management, operation, or maintenance of the Ballpark. As part of its contractual obligations the Team is responsible for general maintenance. This general maintenance includes trash removal, necessary repairs, and maintaining and cleaning the Ballpark including lawns and landscaping services. The Team may enter into contracts directly with vendors for the purpose of providing these services during both the MLB season and the off-season.

Does the provision of these services by vendors during Baseball Times qualify as sales of "other enumerated services" at the Ballpark that are subject to the 10% Ballpark sales tax?

Answer 28: Generally, the services of repairing tangible personal property and performing real property maintenance and landscaping (which includes cleaning and trash removal) would qualify as sales of "other enumerated services" at the Ballpark. See Answer 4 above. District law would ordinarily require vendors rendering these services to charge a 10% Ballpark sales tax, except no tax is imposed on charges for trash removal of recyclable material. D.C. Official Code §47-2001(n)(1)(I),(M).

Question 29: Under the Lease the Team is responsible for paying the costs for electricity, natural gas, heating oil, and telephone necessary for the operation of the Ballpark. Assume that the Team buys these commodities or buys these telephone services from a provider with nexus in the District. Are these sales of utility commodities or telephone services considered to be consummated at the Ballpark?

Answer 29: Yes. These sales are considered to be consummated at the Ballpark because physical delivery of these commodities or telephone services occurs at the Ballpark.

Question 30: Are the sales of the commodities and services in Question 29 subject to Ballpark sales tax.

Answer 30: Yes. These items are necessary to the use and operation of the Ballpark by the Team throughout the calendar year. Thus, sales of such commodities and telephone services to the Team during both the MLB season and the off-season are reasonably related to the performance of baseball games and baseball-related events or exhibitions except for sales of that portion of such commodities that are consumed on days in which a Special Event or a Commission Event is held at the Ballpark. However, since it is administratively infeasible for the utility provider to determine what portion of the purchased commodity or telephone service is consumed on Special or Commission Event days, the vendor must collect a 10% Ballpark sales tax on all sales of such utilities to the Team.

Question 31: Under the Lease the Team is also responsible for providing certain day-of-game services, such as crowd management, medical, security, usher, and ticket-taker services. To the extent that these services are not performed by employees of the Team, the Team will enter into contracts directly with vendors for the purpose of providing these services at the Ballpark during Baseball Times. In some cases the vendors under these contracts also provide these services at the Ballpark for public events other than baseball games or baseball-related events and exhibitions. Does the provision of these services at the Ballpark during Baseball Times qualify as "other enumerated services" subject to the 10% Ballpark sales tax imposed by the Act?

Answer 31: No. Because crowd management, security, medical, usher, and ticket-taker services are not "enumerated services" within the meaning D.C. Official Code §47- 2001(n)(1), they are not subject to any sales tax when performed at the Ballpark by for-profit vendors.

496.4 Collection and Payment of Ballpark Sales Taxes Including Electronic Filing Question 1: What are Ballpark sales taxes?

Answer 1: Ballpark sales taxes are those sales taxes described in Answer 1 to D.C. Mun. Regs. §9-496.2 and .3 (2008) above.

Question 2: Will OTR continue to require vendors obligated to collect Ballpark sales taxes to file monthly sales tax returns and pay the taxes reflected thereon electronically pursuant to D.C. Official Code § 47-2002.05(e)?

Answer 2: Yes. All vendors that have made any sales subject to any Ballpark sales tax during any preceding calendar month must electronically file monthly sales tax returns and electronically pay over such taxes collected on Form FR-800SM (Specialized Sales Tax Monthly Return) in accordance with instructions contained in a notice published on OTR's website. See D.C. Official Code §§ 47-2015, 2016.

Question 3: If a vendor is obligated to collect other sales taxes in addition to Ballpark sales taxes, should that vendor also report and pay over those non-Ballpark sales taxes on the Form FR-800SM?

Answer 3: No. The vendor should report and pay over those non-Ballpark sales taxes on a Form FR-800M that is separate from the return on which the Ballpark sales taxes are reported

Question 4: To what extent do the provisions of Chapters 20, 41, 42, and 43 of Title 47 of the District of Columbia Code apply to the collection, payment, and enforcement of Ballpark sales taxes?

Answer 4: All provisions of Chapter 20 apply to the collection and payment of Ballpark sales taxes except those provisions that are inconsistent with the Act or these regulations. The provisions of Chapters 41 (except D.C. Official Code §47-4108.01), 42 (except D.C. Official Code §§47-4211(b)(1)(B), 4214-15), and 43 of Title 47 of the District of Columbia Code shall apply as appropriate to any taxpayer who fails to file the required sales tax returns or pay the Ballpark sales taxes when due.

Question 5: Regarding baseball-related events or exhibitions organized or sponsored by the Team and held at the Ballpark, is the Team required to comply with the requirements of D.C. Official Code §47-2002.04, to notify OTR it is organizing such an event or exhibition and to provide certain information on District tax obligations to the participating vendors and exhibitors?

Answer 5: The Team does not have to comply with D.C. Official Code § 47-2002.04 (Special Event Promoter Obligations) if it is using the same vendors at those events and exhibitions that are regularly authorized by the Team to sell services, alcoholic beverages, food and drink, and other tangible personal property at professional baseball games at the Ballpark. However, if other vendors ("outside vendors") are to be used, then the Team must comply with the above Code section just for those outside vendors, whether or not the 50-vendor requirement in D.C. Official Code §47-2001(w-1)(1) is met. Therefore, the Team must inform the outside vendors of their obligation to file and pay over the Ballpark sales tax electronically as described in Answer 2. See D.C. Official Code §47-2002.05(e).

Question 6: Must (a) promoters of Special Events performed at the Ballpark, (b) promoters of non-professional baseball or baseball-related events or exhibition games performed at the Ballpark and not sponsored the Team, and (c) promoters of Commission Events, comply with D.C. Official Code §47-2002.04 (Special Event Promoter Obligations)?

Answer 6: Yes. Whether or not the 50 vendor requirement is met, the promoters must comply with that section by advising in writing their vendors and exhibitors of their District tax obligations and by delivering the required information on vendors and exhibitors to the:

Director, Compliance

Office of Tax and Revenue

941 North Capital Street N.E.

Washington, D.C. 20002

or such other address as be designated by OTR by certified mail.

Failure to comply with the requirements of D.C. Official Code § 47-2002.04 may result in OTR assessing the penalties provided by that section.

For purposes of this section the term "promoter" has the same meaning as in D.C. Official Code § 47-2002.04(f).

Question 7: Should the Commission notify OTR before a Commission Event held at the Ballpark?

Answer 7: Yes. The Commission should notify OTR in writing that a professional baseball- related event or exhibition will be held at the Ballpark and should identify the promoter at least 40 days before the date of such event. If the Commission itself is promoting a Commission Event, then the Commission must comply with this requirement.

History

• SOURCE: Final Rulemaking published at 55 DCR 9091(August 22, 2008).

9 DCMR § 497 [RESERVED]

9 DCMR § 498 [RESERVED]

9 DCMR § 499 DEFINITIONS

499.1 When used in this chapter, the following words and phrases shall have the meaning ascribed:

Deputy Chief Financial Officer - the Deputy Chief Financial Officer of the Office of Tax and Revenue.

Employment - an occupation or job by which a person earns income.

Job Seeker - any person who seeks employment whether the employment is full-time, temporary or part-time. Job Seeker shall not include an employee of any agency or entity where the employee is leased or assigned to work for a business or organization, provided the agency has issued a wage and tax statement (Form W-2) to the employee.

Vendor - shall have the same meaning as provided in § 125 of the District of Columbia Sales Tax Act and §§ 201 through 211 of the District of Columbia Use Tax Act, approved May 27, 1949 (63 Stat. 115; D.C. Code § 47 - 2002).

History

• SOURCE: Final Rulemaking published at 44 DCR 985 (February 21, 1997).

9-5 TAX ON RECORDATION OF DEEDS

9 DCMR § 500 GENERAL PROVISIONS

500.1 The provisions of this chapter are adopted under authority of § 317 of the District of Columbia Real Estate Deed Recordation Tax Act of 1962, Pub. L. 87-408 (also referred to in this chapter as the “Act”), as amended (D.C. Official Code § 42-1117 (2001 ed.)).

500.2 For the purposes of this chapter, the words, terms, and phrases defined in the Act shall have the same meanings when used in this chapter, unless otherwise required by the context of this chapter.

500.3 When used in this chapter, the term "Deputy Chief Financial Officer" shall mean the Deputy Chief Financial Officer of the Office of Tax and Revenue ("Office"), or the Deputy Chief Financial Officer's lawfully appointed agent, representative, or designee.

500.4 When used in this chapter, the term "Recorder of Deeds" shall mean the Recorder of Deeds of the District of Columbia, or his or her lawfully appointed agent, representative, or designee.

500.5 For the purposes of the Act, the term "parent" means an individual who is the natural parent of a child or an individual who has legally adopted a child. The term "child" includes both minor and adult children.

500.6 For the purposes of the Act, the term "new real estate construction" means the development or improvement of a structure located upon or attached to land, including any improvement, restoration, addition to, or rehabilitation of any existing structure, if the value of the improvement, restoration, addition, or rehabilitation exceeds fifty percent (50%) of the assessed value of any structure existing prior to the improvement, restoration, addition, or rehabilitation.

500.7 The provisions of §§ 515 through 526 are adopted under § 2(c)(3) of the District of Columbia Recordation of Economic Interests in Real Property Tax Amendment Act of 1989 (hereinafter referred to as the "Recordation of Economic Interests Act)."

500.8 For purposes of the Recordation of Economic Interests Act, the phrase “Holds real property” means the ownership by, or lease or ground rent for a term (with renewals) of at least thirty (30) years to, a corporation, partnership, association, trust or other entity of real property located in the District of Columbia.

500.9 For purposes of the Act, the term “refinance” does not include the issuance of a new series of bonds secured by an indenture that also secures previously issued bonds.

History

• SOURCE: Commissioners' Order 62-751 effective April 26, 1962, published at 8 DCR 278 (May 14, 1962); as amended by Final Rulemaking published at 36 DCR 8653 (December 29, 1989); as amended by Final Rulemaking published at 61 DCR 4717 (May 9, 2014). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 500

9 DCMR § 501 EXEMPTIONS FROM THE RECORDATION TAX

501.1 The only allowable exemptions from the recordation tax are those enumerated in § 302 of the Act (D.C. Official Code § 42-1102) or otherwise expressly provided by statute.

501.2 The denial of an exemption applied for under the authority of § 302 of the Act (D.C. Official Code § 42-1102) may be appealed to the Superior Court of the District of Columbia within 6 months of the date on which the Recorder of Deeds mails written denial of the exemption, in the same manner as is provided for the appeal of a denial of a real property tax exemption applied for under the authority of D.C. Official Code § 47-1009.

501.3 The exemption of deeds to property acquired by the United States or the District under § 302 of the Act (D.C. Official Code § 42-1102(2)) shall include deeds to property acquired by an agency or instrumentality of either government, and shall also include deeds to property sold by the District for delinquent District real property taxes.

501.4 To qualify for the exemption provided under Section 302(5) of the Act (D.C. Official Code § 42-1102(5)), a purchase money mortgage or purchase money deed of trust must be recorded simultaneously with the deed conveying the real property for which the purchase money mortgage or deed of trust was obtained. To qualify as a purchase money instrument, a mortgage or deed of trust must be: (1) provided as full or partial payment of the purchase price of the real property conveyed; (2) fully executed within thirty (30) days from the date of the execution of the deed of conveyance; (3) recorded within thirty (30) days after the recordation date of the deed of conveyance; (4) executed by the purchaser as part of a series of transactions conveying title to the real property to the purchaser; (5) reference the deed of conveyance by date and document number, if available; (6) recite on its fact this is it a purchase money mortgage or deed of trust; and (7) recite on its face the amount of purchase money that it secures.

501.5 The Recorder of Deeds may, in his or her discretion, waive the requirement of D.C. Official Code § 47-1005.03(e) that the certification described in D.C. Official Code § 47-1005.03(f)(1) accompany a deed at the time it is submitted for recordation where the Recorder determines that such certification cannot be made at that time. In lieu of the certification, the transferee of the property shall submit with the deed a statement that the certification cannot be provided, and acknowledging that, if the certification is not furnished to the Recorder within 12 months from the date the deed is recorded, recordation tax on the deed, together with interest and penalty as provided by law, shall be due.

History

• SOURCE: Commissioners' Order 62-271, effective 26, 1962, published at 8 DCR 278 (May 14, 1962); as amended by Final Rulemaking published at 27 DCR 4929 (November 7, 1980), incorporating text of Proposed Rulemaking published at 27 DCR 3347 (August 1, 1980); as amended by Final Rulemaking published at 61 DCR 4717 (May 9, 2014); as amended by Final Rulemaking published at 65 DCR 1450 (February 9, 2018); as amended by Final Rulemaking published at 69 DCR 011009 (September 2, 2022). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 501

9 DCMR § 502 PAYMENT OF THE RECORDATION TAX

502.1 The basis for the tax is the recordation of a deed and, except as otherwise provided in the Act or this chapter, the tax must be paid at the same time the deed is submitted for recordation. Deeds are required to be recorded as provided by D.C. Official Code § 47-1431.

502.1a The Act applies to deeds reflecting the transfer of property or an interest in property from one person to another, whether the transfer occurs by conveyance or operation of law, including a transfer resulting from a merger, consolidation, liquidation or reorganization.

502.2 The measure of the tax is the consideration for the property conveyed by the deed.

502.3 In accordance with § 304 of the Act (D.C. Official Code § 42-1104), if there is no consideration for the property which is the subject of a deed, or where the consideration is nominal, consideration shall be construed to be the fair market value of the real property involved.

502.4 The term "consideration," as defined in § 301(5) of the Act, as amended, (D.C. Official Code § 42-1101(5)), includes consideration actually paid or ultimately required to be paid for real property, whether that consideration is in the form of cash or is in some other form.

502.5 The term "fair market value" shall have the same meaning as the term “estimated market value” defined in D.C. Official Code § 47-802(4).

502.6 The term "nominal consideration' means any price paid or any item exchanged in return for title to real property which bears no reasonable resemblance to the fair market value of the real property. Any consideration paid which equals less than 30% of the fair market value of the property shall be deemed to bear no reasonable resemblance to the fair market value of the property and, therefore, shall be deemed to be nominal.

502.7 The following formula shall be applied for purposes of determining if the consideration paid is 'nominal consideration':

The fair market value of the real property shall be multiplied by 30%. If the consideration paid is less than 30% of the fair market value of the real property for which a deed is submitted for recordation, the consideration paid shall be deemed to be nominal. If the consideration paid is deemed nominal, the recordation tax shall be based on the fair market value of the property. If the consideration paid is equal to or greater than 30% of the fair market value of the real property for which a deed is submitted for recordation, the consideration paid shall not be deemed to be nominal.

502.8 Examples:

1. The consideration paid as stated on the recordation tax return is $ 20,000 and the fair market value of the property for which a deed is submitted for recordation is $ 75,000. 30% of the fair market value of the property is $ 22,500 ($ 75,000 X .30 = $ 22,500). Since the consideration paid is less than 30% of the fair market value of the property, the consideration paid shall be deemed to be nominal. In this case, the recordation tax shall be based upon the fair market value of the property.

2. The consideration paid as stated on the recordation tax return is $ 40,000 and the fair market value of the property for which a deed is submitted for recordation is $ 100,000. 30% of the fair market value of the property is $ 30,000 ($ 100,000 X .30 = $ 30,000). Since the consideration paid is more than 30% of the fair market value of the property, the consideration paid shall not be deemed to be nominal. In this case, the recordation tax shall be based on the consideration paid.

3. The consideration paid as stated on the recordation tax return is $ 36,000.00 and the fair market value of the property for which a deed is submitted for recordation is $ 120,000.00. 30% of the fair market value of the property is $ 36,000 ($ 120,000.00 X .30 = $ 36,000.00). Since the consideration paid is equal to 30% of the fair market value of the property, the consideration paid shall not be deemed to be nominal. In this case, the recordation tax shall be based on the consideration paid.

502.9 If the Recorder of Deeds determines that the consideration paid is nominal, the recordation tax shall be determined based on the fair market value of the property for which a deed is submitted for recordation. The tax determined shall be paid at the time of recordation before the deed shall be accepted for recordation.

502.10 In determining whether consideration paid is nominal, the Recorder of Deeds may use his discretion in considering any information available to him at the time of recordation from which the market value of the property may be determined. Such information may include, but is not limited to:

(a) the current assessed value of the property;

(b) a certified appraisal report that is not more than six months old;

(c) a contract for sale of the property;

(d) the settlement sheet for the sale of the real property; and

(e) any other document upon which the fair market value of the property may be determined.

502.11 Any taxpayer aggrieved by a determination made by the Recorder of Deeds that the consideration paid is nominal may file a claim for refund in accordance with the provisions of D.C. Official Code § 47-3310.

502.12 Any taxpayer aggrieved by a determination made by the Recorder of Deeds of fair market value used to calculate the recordation tax may file a claim for refund in accordance with the provisions of D.C. Official Code § 47-3310. Evidence of market value shall be submitted with the claim for refund.

502.13 The provisions set forth in this section shall apply to all deeds submitted to the Recorder of Deeds for recordation, including deeds for foreclosure real estate transactions and deeds “in lieu of foreclosure.”

502.14 When a single transaction includes a transfer of property or an interest in property by a deed that is taxed under the Act as well as property or an interest not taxed under the Act, the consideration shall be allocated between the taxed deed and nontaxed property or interest transferred for purposes of assessing the tax on the deed. The allocation shall be made on the recordation tax return and substantiated by documents establishing the agreement of the parties as to the allocation at the time of the transfer. The taxpayer has the burden of establishing the amount of consideration allocable to any nontaxable property or interest in property. In the absence of an allocation by the taxpayer, all consideration shall be allocated to the deed, unless otherwise adjusted by the Recorder of Deeds. The Recorder of Deeds shall not be bound by any allocation made on a recordation tax return and may adjust the allocation on audit.

502.15 When a deed which conveys interests in real property located both within and outside the District of Columbia, the consideration for the deed or the amount of debt secured shall be allocated between the two categories of property, and the tax shall be imposed on the consideration for the deed or the amount of debt secured that is allocable to property within the District. The tax applies to the consideration payable or the amount of the debt secured in the same ratio that the value of the real property that is located in the District bears to the value of the entire property in the deed. The allocation shall be made on the recordation tax return and shall include such substantiation as the Recorder of Deeds shall deem appropriate.

History

• SOURCE: Commissioners' Order 62-751 effective April 26, 1962, published at 8 DCR 278 (May 14, 1962); as amended by Final Rulemaking published at 46 DCR 8264 (October 15, 1999); as amended by Final Rulemaking published at 61 DCR 4717 (May 9, 2014). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 502

9 DCMR § 503 RECORDATION TAX RETURNS

503.1 Except as otherwise specifically provided in this chapter, each deed submitted to the Recorder of Deeds for recordation on or after May 1, 1962, shall be accompanied by a return under oath, executed by all the parties to the deed.

503.2 In the case of a party to a deed who is unable to execute a return by reason of minority or other disability, the return shall be executed by the person or persons duly authorized to act for and on behalf of the party under disability, and the person or persons executing a return on behalf of such a party shall be liable for payment of the tax imposed upon the deed.

503.3 Returns shall be in such form or on a form as the Deputy Chief Financial Officer, in consultation with the Recorder of Deeds, shall prescribe.

503.4 Each return shall set forth the consideration for the property, the amount of tax payable, if any, and other information required by the Deputy Chief Financial Officer.

503.5 In the case of a deed for which exemption from the tax is claimed, the return shall show the basis for exemption.

503.6 If exemption is claimed under § 302(3) of the Act (D.C. Official Code § 42-1102(3)) a copy of the filed real property tax exemption application (Form FP 300) shall accompany the deed at the time of recordation., If exemption is claimed under § 302(4) of the Act (D.C. Official Code § 42-1102(4)), the return shall also show the purpose or purposes for which the property was acquired and shall be accompanied by all documents and other information that the Recorder of Deeds deems necessary to determine the exempt or taxable status of the deed.

History

• SOURCE: Commissioners' Order 62-751 effective April 26, 1962, published at 8 DCR 278 (May 14, 1962); as amended by Final Rulemaking published at 61 DCR 4717 (May 9, 2014). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 503

9 DCMR § 504 RECORDATION OF DEEDS WITHOUT FILING A RETURN

504.1 Except as otherwise provided in this section, the following exempt deeds may be accepted for recordation without the filing of a return:

(a) A deed to property acquired by the United States or the District of Columbia or by an agency or instrumentality of either;

(b) A tax deed executed by the District of Columbia government pursuant to the provisions of law pertaining to the assessment and collection of District of Columbia real property taxes;

(c) Any deed, the sole purpose of which is to release property which is security for a debt or other obligation; and

(d) Tax deeds.

504.2 The submission of a deed for recordation without a return shall constitute a representation by the parties to the deed that the deed, in all respects, meets the requirements of the Act and this section.

504.3 Notwithstanding the provisions of §§ 504.1 and 504.2, the Recorder of Deeds, in any case where a deed is submitted for recordation without a return, may reject the deed for recordation unless a return is filed if, in his or her judgment, it appears from the deed or other information in the possession of the Recorder of Deeds that the deed does not conform with the provisions of this section and that a return is required for the purpose of determining whether the deed is, in fact, exempt from tax.

504.4 If the Recorder of Deeds rejects a deed for recordation under § 504.3, he or she shall notify the Deputy Chief Financial Officer of the action and the deed shall be reviewed by the Deputy Chief Financial Officer to determine its status.

504.5 If the Deputy Chief Financial Officer concludes that a return is required, the Deputy Chief Financial Officer shall notify the parties to the deed at the addresses shown on the statement accompanying the deed, and the parties shall file a return.

504.6 The Deputy Chief Financial Officer shall then determine whether the deed is exempt or taxable, and (if taxable) the amount of tax, and shall notify the Recorder of Deeds of the determination.

504.7 If the deed is otherwise recordable, the Recorder of Deeds shall record it upon its presentation and payment of any tax determined by the Deputy Chief Financial Officer to be due.

History

• SOURCE: Commissioners' Order 62-751 effective April 26, 1962, published at 8 DCR 278 (May 14, 1962); as amended by Commissioners' Order 62-903 effective May 29, 1962, published at 8 DCR 307 (June 11, 1962); as amended by Final Rulemaking published at 27 DCR 4929 (November 7, 1980), incorporating text at Proposed Rulemaking published at 27 DCR 3347 (August 1, 1980); as amended by Final Rulemaking published at 37 DCR 5691 (August 31, 1990). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 504

9 DCMR § 505 [RESERVED]

History

• SOURCE: Commissioners' Order 62-751 effective April 26, 1962, published at 8 DCR 278 (May 14, 1962); as amended by Final Rulemaking published at 61 DCR 4717 (May 9, 2014). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 505

9 DCMR § 506 WAIVER OF THE FILING OF A RETURN

506.1 If the Deputy Chief Financial Officer determines that a party to a deed cannot file a return, the Deputy Chief Financial Officer, in his or her discretion, may waive the filing requirement for that party. The Deputy Chief Financial Officer may require any affidavits, documents, and statements to be submitted that the Deputy Chief Financial Officer deems necessary for a determination whether a waiver should be granted.

506.2 A waiver granted to one party shall not, unless specifically stated in the waiver, be deemed to be a waiver as to any other party. The waiver shall not affect the requirement for payment of the tax on the deed at the time the deed is submitted for recordation.

506.3 Upon notification in writing from the Deputy Chief Financial Officer that a waiver has been granted, the Recorder of Deeds is authorized to record the deed (if the deed is otherwise recordable) without the filing of a return by the party to whom the waiver applies.

History

• SOURCE: Commissioners' Order 62-751, effective April 26, 1962, 8 DCR 278 (May 14, 1962). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 506

9 DCMR § 507 SECURITY FOR PAYMENT OF TAX

507.1 If it is determined that a deed submitted for recordation cannot be recorded by reason of failure of the parties to file a proper return or by reason of question about the correct amount of tax, the Deputy Chief Financial Officer is authorized to accept such security in such form(s) as, in the discretion of the Deputy Chief Financial Officer, may be necessary to ensure that the tax which is or may be applicable to the transfer is paid.

507.2 Upon being notified of the acceptance of the security by the Deputy Chief Financial Officer, the Recorder of Deeds shall record the deed if it is otherwise recordable.

507.3 After accepting the security and notifying the Recorder of Deeds, the Deputy Chief Financial Officer shall determine the applicable tax.

507.4 Upon payment of the tax due, the Deputy Chief Financial Officer shall return the security to the person or persons from whom it was obtained.

507.5 If payment of the tax is not made, the Deputy Chief Financial Officer shall, so far as is possible, collect the tax out of the security previously paid to the Deputy Chief Financial Officer. If there is any excess security, the Deputy Chief Financial Officer shall return that excess to the person or persons from whom it was obtained.

507.6 If the security is inadequate for collection of the entire amount of tax, the parties to the deed shall be liable jointly and severally for the balance of the tax due.

History

• SOURCE: Commissioners' Order 62-751, effective April 26, 1962, 8 DCR 278 (May 14, 1962). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 507

9 DCMR § 508 INSPECTION OF RETURNS AND OTHER DOCUMENTS RELATED TO DEEDS

508.1 Except as otherwise provided in the Act or this section, all returns and other documents pertaining to deeds filed with the Recorder of Deeds or the Deputy Chief Financial Officer pursuant to the Act or this chapter shall be available for inspection only to the following:

(a) The person or persons filing the return or document;

(b) An official or employee of the District who has duties and responsibilities in connection with those returns or documents;

(c) An official of the government of the United States when acting in his or her official capacity; or

(d) An official of a state or political subdivision of a state when acting in his or her official capacity, if similar privileges are accorded to District audit officials by that state or political subdivision.

508.2 Information on the amount of tax paid upon the recordation of a deed shall be available to the public.

508.3 The Recorder of Deeds or the Deputy Chief Financial Officer may disclose returns or information reported on returns to a contractor obligated to the District of Columbia to store documents or information to provide other services related to tax administration to the extent that the disclosure relates to the obligations of the contractor. Returns or return information may also be disclosed to a contractor obligated to the District to incorporate such returns or return information, or to prepare them for incorporation, into an electronic storage and retrieval system for the use of the District.

History

• SOURCE: Commissioners' Order 62-751 effective April 26, 1962, published at 8 DCR 278 (May 14, 1962); as amended by Final Rulemaking published at 61 DCR 4717 (May 9, 2014). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 508

9 DCMR § 509 NAKED TITLE DEEDS

509.1 Where the grantee named in a recorded deed upon which the applicable tax has been paid acted as a nominal grantee for the sole purpose of holding, on behalf of another person, naked title to the property described in the deed, a deed to that property subsequently executed by the nominal grantee, without consideration, naming as grantee the person on whose behalf the nominal grantee acted, shall be exempt from tax as a deed which, without additional consideration, confirms, corrects, modifies, or supplements a deed previously recorded.

509.2 Where the owners of an estate in real property have, for the sole purpose of changing their estate (for example, in the case of a change from a tenancy in common to a joint tenancy) executed a deed to a nominal grantee holding naked title to the property, who, in turn, and without consideration, executes a deed to the same owners so as to effect the change of estate desired, the deeds so executed shall be exempt from tax as deeds which, without additional consideration, confirm, correct, modify, or supplement a deed previously recorded.

509.3 Where exemption is claimed under this section, the right to the exemption must be established to the satisfaction of the Deputy Chief Financial Officer upon the presentation to the Deputy Chief Financial Officer of such returns, documents, and other information as the Deputy Chief Financial Officer, in his or her discretion, may require.

History

• SOURCE: Commissioners' Order 62-751, effective April 26, 1962, 8 DCR 278 (May 14, 1962). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 509

9 DCMR § 510 CONSTRUCTION LOAN AND PERMANENT LOAN DEEDS OF TRUST AND MORTGAGES

510.1 The exemption under Section 302(11) of the Act (D.C. Official Code § 42-1102(11)) is available only for a permanent loan deed of trust or mortgage that directly replaces a construction loan deed of trust or mortgage. For purposes of this Section 510, the term “construction loan deed of trust or mortgage” means a deed of trust or mortgage upon real property which is given to secure a loan for new construction of, additions to, or rehabilitation of improvements, or modifications to land, and the term “permanent loan deed of trust or mortgage” means a deed of trust or mortgage upon real property which secures an instrument made by the same obligors who made the instrument which the construction loan deed of trust or mortgage secured, and which conveys substantially the same real property.

510.2 When a permanent loan deed of trust or mortgage is submitted for recordation and the tax on the construction loan deed of trust or mortgage that it replaces has been timely and properly paid, no additional tax liability arises under Section 303 of the Act (D.C. Official Code § 42-1103), except that a tax shall be imposed on the amount by which the principal amount of the permanent loan deed of trust or mortgage exceeds the principal balance due on the construction loan.

510.3 In order to qualify for the exemption, the permanent loan deed of trust or mortgage shall contain a reference to the construction loan deed of trust or mortgage and the date of its recordation and its document number.

510.4 A refinancing or amendment, modification or restatement of a construction loan deed of trust or mortgage (including replacement thereof by a permanent loan deed of trust or mortgage) shall be taxed in the manner provided in Section 303(a)(3) of the Act (D.C. Official Code § 42-1103(a)(3)).

510.5 On a deed conveying a security interest in real property, the principal amount of debt that the deed secures shall be the principal amount of the debt recited on the face of the deed unless, from other information available to the Recorder of Deeds, the Recorder of Deeds determines that the principal amount of debt is a higher amount.

510.6 Within thirty (30) days after a security interest in a real property is given pursuant to a construction loan deed of trust or mortgage or a permanent loan deed of trust or mortgage, all transferees of, and all holders of the security interest in, real property shall record a fully acknowledged copy of the security interest instrument, including the lot and square number of the real property transferred or encumbered, with the Recorder of Deeds. If the thirtieth (30th) day is a Saturday, Sunday, or legal holiday, the time limitation for recording shall be extended to include the first day after the 30th day which is not a Saturday, Sunday, or legal holiday.

History

• SOURCE: Final Rulemaking published at 27 DCR 4929 (November 7, 1980), incorporating text of Proposed Rulemaking published at 27 DCR 3347, 3348 (August 1, 1980); as amended by Final Rulemaking published at 65 DCR 1450 (February 9, 2018). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 510

9 DCMR § 511 DEEDS ISSUED PURSUANT TO FORECLOSURE PROCEEDINGS

511.1 Any deed which is issued pursuant to a foreclosure sale and submitted for recordation shall be subject to the tax imposed pursuant to § 303 of the Act (D.C. Official Code § 42-1103) regardless of the identity of the grantee named in the deed, including a grantee who is the original secured party or mortgagee under the deed of trust or mortgage which secured the debt or other obligation on the property in question.

511.2 Any deed which is issued in place of a foreclosure sale and submitted for recordation shall be subject to the tax imposed pursuant to § 303 of the Act (D.C. Official Code § 42-1103) regardless of the identity of the grantee named in the deed, including a grantee who is the original secured party or mortgagee under the deed of trust or mortgage which secured the debt or other obligation on the property in question.

511.3 For purposes of this section, the measure of the tax shall be the consideration for the deed as provided in § 303 of the Act.

511.4 The provisions of § 502 of this chapter shall apply to this section.

History

• SOURCE: Final Rulemaking published at 27 DCR 5929 (November 11, 1980), incorporating text of Proposed Rulemaking published at 27 DCR 3347 (August 1, 1980): as amended by Final Rulemaking published at Final Rulemaking published at 31 DCR 1205 (March 9, 1984); as amended by Final Rulemaking published at 61 DCR 4717 (May 9, 2014). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 511

9 DCMR § 512 RECORDATION OF REVOCABLE TRUST DEEDS

512.1 The following deeds shall be exempt from the tax imposed by the Act: (a) a deed by a transferor that conveys bare legal title to the trustee of a revocable trust, without consideration for the transfer, where the transferor is the beneficiary of the trust; (b) a deed to property transferred to a beneficiary of a revocable trust as the result of the death of the grantor of the revocable trust; and (c) a deed to property transferred by the trustee of a revocable trust if the transfer would otherwise be exempt under § 302 of the Act (D.C. Official Code § 42-1102) if made by the grantor of the revocable trust.

History

• SOURCE: Final Rulemaking published at 32 DCR 327 (January 18, 1985); as amended Final Rulemaking published at 54 DCR 10644 (November 2, 2007); as amended by Final Rulemaking published at 61 DCR 4717 (May 9, 2014). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 512

9 DCMR § 513 UNIFORM COMMERCIAL CODE (UCC) ARTICLE 9 FILINGS

513.1 Scope

These regulations are to document filing procedures for Uniform Commercial Code filings pursuant to D.C. Law 13-201 effective immediately.

513.2 Place to File

A financing statement to perfect a security interest shall be filed with the Recorder of Deeds.

513.3 Filing Office Identification

In addition to the promulgation of these rules, the Recorder of Deeds shall disseminate information on its location, mailing address, telephone numbers at the Office of Tax and Revenue Internet site. The filing office offers on-line information at the agency's web site. Additionally, electronic filing of UCC documents is available.

513.4 Office Hours

Although the Recorder of Deeds maintains regular office hours (8:30am-4:00pm), it receives transmissions electronically 24 hours per day, 365 days per year, except for scheduled maintenance and unscheduled interruptions of service. Electronic communications may be retrieved and processed periodically (but no less often than once each day the filing office is open for business) on a batch basis.

513.5 UCC Document Delivery

UCC documents may be tendered for filing at the Recorder of Deeds.

(a) Electronic filing: UCC documents may be submitted electronically via the agency's online services portal. The filing time for a UCC document delivered by this method is the time that the filing office's system analyzes the relevant transmission and determines that all the required elements of the transmission have been received in a required format and are machine-readable.

(b) Personal delivery: The file time for a UCC document delivered by this method is effective from the date and time of recording provided the record satisfies the requirements for a financing statement in this section.

(c) Courier delivery: The filing time for a UCC document delivered by this method is, notwithstanding the time of delivery, the date and time of recording provided the record satisfies the requirements for a financing statement in this section. A UCC document delivered after the close of business as described in section 513.4 (Office Hours) or on a day the recording office is not open for business will have filing time of the close of business on the next day the recording office is open for business.

(d) Postal service delivery: The file time for a UCC document delivered by this method is the next close of business day following the time of delivery provided the record satisfies the requirements for a financing statement in this section. A UCC document delivered after the close of business as described in section 513.4 (Office Hours) or on a day the filing office is not open for business will have a recording time of the close of business on the next day the recording office is open for business.

513.6 Filing Fees

9 DCMR § 336.3 sets basic fees for filing and indexing initial financing statements and other related documents for both, paper or electronic filings. These documents include, but are not limited to:

Security Agreements (chattels)

Financing Statements

Continuation Statements

Termination Statements

Assignment of Financing Statements

Partial Release of Financing Statements

Release of Financing Statements

Statements of Release

Amendments, re-recordings and corrections to security, financing, continuation, termination, assignments, and release statements

513.7 Method of Payments-Filing fees and fees for public records services may be paid by the following methods:

(a) Cash - The Recorder of Deeds discourages cash payment unless made in person to the cashier at the filing office;

(b) Checks - Checks made payable to the D.C. Treasurer will be accepted for payment;

(c) Credit Cards - The Recorder of Deeds accepts payments using credit cards.

Filing parties shall provide the recording office agent with the card number, expiration date of the card, the name of the card issuer, the name of the person or entity to whom the card was issued and the billing address for the card. Payments will not be deemed tendered until the issuer or its agent has confirmed to the recording office or its agent that payment will be forth coming.

513.8 The Duties and Responsibilities of the Recording Office with respect to the administration of the UCC are ministerial - In accepting for filing or refusing to file a UCC document pursuant to these rules, the filing office does not determine the legal sufficiency or insufficiency of a document; Determine whether or not a security interest in collateral exists; Determine that information in the document is correct or incorrect, in whole or in part.

513.9 Grounds for Refusal of UCC Documents - The grounds for refusal by the filing office are set forth in Revised UCC Section 28: 9-516(b).

513.10 Time Limit - The recording office shall determine whether criteria exist to refuse acceptance of any UCC Article 9 document recording not later than the second business day after the date the document would have been filed had it been accepted for filing and shall index a UCC document not so refused within the same time period.

513.11 Procedure Upon Refusal - If the recording office finds grounds under the rules to refuse acceptance of a UCC document, the filing office shall return the document to the filing party. The recording office shall send a notice that contains the date and time the document would have been filed had it been accepted for filing and a brief description of the reason for refusal to accept the document under the rules. The notice shall be sent to a secured party or the filing party no later than the second (2nd) business day after the determination to refuse acceptance of the document. A refund may be delivered with the notice or under separate cover.

513.12 Recorder of Deeds Discretion - The Recorder of Deeds shall have the discretionary authority to refuse to file a document which is determined to be in non-compliance under DC Law 13-201 Section 28: 9-502.

513.13 UCC Information Management System - The recording office uses an automated information management system to store, index, and retrieve information relating to financing statements. The information management system includes an index of the names of debtors and secured parties. The rules in this subsection describe the UCC information management system.

513.14 Primary Data Elements - The primary elements used in the UCC information system are the following:

(a) Each initial financing statement is identified by its file number. Identification of the initial financing statement is applied to written UCC documents or otherwise permanently associated with the record maintained for UCC documents in the UCC information management system.

A record is created in the information management system for each initial financing statement and all information comprising such record is maintained in such system. A UCC record other than an initial financing statement is identified by a unique acknowledgment number assigned by the recording office. In the information system, records of all UCC documents other than initial financing statements are linked to the record of their related initial financing statement.

(b) Type of document - The type of document from which data is transferred is identified in the information management system from information supplied by the remitter.

(c) Filing date and time - The filing date and time of UCC documents are stored in the information management system.

(d) Identification of parties - The names of debtors and secured parties are transferred from UCC documents to the information management system using one or more data entry or transmittal techniques.

(e) Status of financing statement - In the information management system, each financing statement has a status of active unless designated terminated or lapsed.

(f) Page count - The total number of pages in a UCC record is maintained in the information management system.

513.15 Individual Debtors - For the purpose of this rule "individual" means a human being, or a decedent in the case of a debtor that is such decedent's estate. This rule applies to the name of a debtor or a secured party on a UCC document who is an individual.

(a) Individual name fields - The names of individuals are stored in fields that include only names of individuals, and not the names of organizations. Separate data entry fields are established for first, middle and last names. The filing officer assumes no responsibility for the accurate designation of the components of a name but will accurately enter the data in accordance with the filer's designation.

(b) Titles and prefixes - Title and Prefixes, such as "Doctors", "Reverend," "Mr.," and "Mrs.," should not be entered in the UCC information system.

(c) Title and suffixes after names - Title, suffixes or indications of status such as "M.D." and "Esquire" and "Senior, Junior, III, etc." shall not be entered in the UCC information management system.

(d) Truncation Individual names - Personal names fields in the UCC database are fixed in length. Filers should provide full names on their UCC documents. A name that exceeds the fixed length is indexed as presented to the recording office up to 50 characters - the maximum length of the data entry field, and the filing party should check each name field after filing to assure that it is indexed properly.

513.16 Organization Debtors - This subsection applies to the name of an organizational debtor or a secured party on a UCC document.

(a) Single field - The names of organizations are stored in fields that include only the names of organizations and not names of individuals.

(b) Truncation Organization names - The organization name field in the UCC database is fixed in length. Filing parties should provide full names on their UCC documents and should check each name field after recording to assure that it is indexed properly. The maximum length is 50 characters. A name that exceeds the fixed length is entered as presented to the recording officer.

513.17 Processing and Data Entry Procedures - This section contains a description of the indexing procedure and correspondence procedures followed by the recording office prior to archiving a UCC document or returning the UCC document to the filing party.

(a) Date and Time stamp - The date and time of receipt are noted on the document or otherwise permanently associated with the record maintained for a UCC document in the UCC information management system at the earliest possible time.

(b) Cash management - Transactions necessary for payment for the filing fee are performed.

(c) Document review - The recording office determines whether a basis exist to refuse the document under (D.C. Code § 28.9-101 et seq.)

(d) File stamp - If there is no ground for refusal of the document, the document is deemed filed, with a unique document number and the file time and date. All such information is permanently associated with the record maintained in the UCC information management system.

(e) Lapse date and time - A lapse date is calculated for each initial financing statement. The lapse date is the same date of the same month as the filing date in the fifth year after the filing date or relevant subsequent fifth anniversary thereof if timely continuation statement is filed. The lapse takes effect at midnight at the end of the lapse a date. The relevant anniversary for a February filing date shall be the March 1 in the fifth year following the year of the filing date.

(f) Errors of the Filing Office - The recording office may correct the errors of the recording office personnel in the UCC information management system at any time. If the correction is made after the filing office has issued a certification date that indicates the recording date of a corrected document, the filing office shall proceed as follows. A record relating to the relevant initial financing statement will be placed in the UCC information management system stating the date of correction and explaining the nature of the corrective action taken. The record shall be preserved for so long as the record of the initial financing statement is preserved in the UCC information management system.

(g) Errors Other than Filing Office Errors - An error by a filing party is the responsibility of such filing party. It can be corrected by filing an amendment.

513.18 Initial Financing Statement - A new record is opened in the UCC information management system for each initial financing statement that bears the file number of the financing statement and the date and time of filing.

(a) The name and address of each secured party set forth in the financing statement are entered into the record of the financing statement.

(b) The record is indexed according to the name of the debtor(s) and is maintained for public inspection.

(c) A lapse date is established for the financing statement, unless the initial financing statement indicates it is filed against a transmitting utility, and the lapse date is maintained as part of the record.

513.19 Amendment - A record that bears the acknowledgment number for the amendment and the date and time of filing is created for the amendment.

(a) The record of the amendment is associated with the record of the related initial financing statement in a manner that causes the amendment to be retrievable each time a record of the financing statement is retrieved.

(b) The name of the debtor and the name and address of each secured party are entered into the UCC information management system in the record of the financing statement. Each such additional debtor name is added to the searchable index and is not removed from the information management system of the recording office even after the financing statement lapses. An amendment that changes a debtor's name is cross-indexed in the UCC information management system so that a search under either the debtor's old name or debtor's new name will reveal the initial financing statement and such related UCC records. If the amendment is a continuation, a new lapse date is established for the financing statement and maintained as part of its record.

513.20 Termination statement - A termination statement shall cause the recording office to designate the financing statement as terminated.

History

• SOURCE: Final Rulemaking published at 46 DCR 8264 (October 15, 1999); as amended by Final Rulemaking published at 48 DCR 10046 (November 2, 2001); as amended by Final Rulemaking published at 61 DCR 4717 (May 9, 2014). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 513

9 DCMR § 514 [RESERVED]

9 DCMR § 515 RECORDATION OF ECONOMIC INTERESTS

515.1 A transfer of an economic interest in real property located in the District shall occur upon the conveying, vesting, granting, bargaining, sale, or assignment of a controlling interest in any corporation, partnership, association, trust, or other unincorporated entity that is subject to the Act.

515.2 A deed shall be filed by any entity that is subject to the Recordation of Economic Interests Act whenever a transfer of an economic interest in the entity occurs.

History

• SOURCE: Final Rulemaking published at 36 DCR 8653, 8654 (December 29, 1989). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 515

9 DCMR § 516 ENTITIES SUBJECT TO THE RECORDATION OF ECONOMIC INTERESTS ACT

516.1 Any corporation, partnership, association, trust or other unincorporated entity shall be subject to the recordation tax if it, during the twelve (12) month period immediately preceding the transfer of an economic interest in real property located in the District:

(a) Derives more than fifty percent (50%) of its annual gross receipts from the ownership or disposition of real property located in the District; or

(b) Holds, on the date of the transfer of an interest, real property located in the District, the value of which comprises eighty percent (80%) or more of the value of its entire tangible asset holdings.

516.2 In determining whether an entity derives more than fifty percent (50%) of its annual gross receipts from the ownership or disposition of real property located in the District, in transfers that are aggregated, the date of the most recent transfer aggregated shall govern when the twelve (12) month period shall end.

516.3 Gross receipts from the ownership or disposition of real property shall include, but is not limited to, the following:

(a) Rents from real property; or

(b) Gain from the sale or other disposition of real property.

516.4 The Deputy Chief Financial Officer shall use the fair market value of both the entity's real property assets and assets other than real property on the date of each transfer in determining whether an entity's real property located in the District comprises eighty percent (80%) or more of the value of its entire tangible asset holdings.

Example: X corporation, a publicly-held manufacturing corporation in New York, owns a warehouse in Virginia valued at two hundred thousand dollars ($ 200,000), a manufacturing plant in Maryland valued at three hundred thousand dollars ($ 300,000), an office building in the District valued at three million two hundred thousand dollars ($ 3,200,000), and various equipment and assets valued at three hundred thousand dollars ($ 300,000). X corporation is subject to the tax because it holds real property in the District, the value of which comprises eighty percent (80%) or more of the value of its entire tangible asset holdings.

516.5 In deciding whether the eighty percent (80%) test is met, the Deputy Chief Financial Officer may accept a determination of value of the real property and other assets that reasonably reflects the fair market value of the assets.

516.6 If the Deputy Chief Financial Officer decides that a determination made pursuant to § 516.5 does not reasonably reflect the fair market value of the property, the Deputy Chief Financial Officer may disallow the determination and use any method that the Deputy Chief Financial Officer decides will result in a reasonable determination of the fair market value of the assets.

516.7 The Deputy Chief Financial Officer may request the following items, among others, as the Deputy Chief Financial Officer decides is relevant to determine whether an entity is subject to the transfer tax:

(a) Income-Expense reports filed pursuant to D.C. Official Code § 47-821;

(b) Federal Income tax Returns (subject to confidentiality requirements imposed by D.C. Official Code § 47-1805.4; and

(c) Books and records of the entity.

History

• SOURCE: Final Rulemaking published at 36 DCR 8653, 8654 (December 29, 1989). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 516

9 DCMR § 517 TRANSFERS OF CONTROLLING INTERESTS

517.1 A transfer of an economic interest shall occur upon the conveyance of a controlling interest of any legal, equitable, beneficial or other ownership interest in the following:

(a) The shares of stock in a corporation;

(b) A partnership, association or other unincorporated entity; or

(c) A trust.

517.2 For the purposes of this chapter, a controlling interest in the case of a corporation means:

(a) More than fifty percent (50%) of the total combined voting power of all classes of stock of the corporation; or

(b) More than fifty percent (50%) of the total fair market value of all classes of stock of the corporation.

517.3 For the purposes of this chapter, a controlling interest in the case of a partnership, association, trust or other entity means more than fifty percent (50%) of the capital, profits or beneficial interests in the partnership, association, trust or other entity.

517.4 A controlling interest may be transferred by conveyance, vesting, granting, bargaining, sale, or assignment.

517.5 A conveyance may include any of the following:

(a) Surrender;

(b) Mortgage or deed of trust;

(c) The contribution of an interest in an entity to a trust;

(d) Liquidations;

(e) The withdrawal or addition of a member of a partnership, association or other unincorporated entity; or

(f) Any other transaction in which a beneficial interest is transferred.

Example (1): X corporation owns real property located in the District of Columbia, the value of which comprises more than eighty percent (80%) of the value of its entire tangible asset holdings. A, B, and C each own one-third (1/3) interests of X corporation stock. A buys B and C's interests to acquire a one hundred percent (100%) interest in X corporation. As purchase of B and C's interests must be recorded and is subject to the recordation tax.

Example (2): A and B are equal partners in a partnership. Over a twelve (12) month period the partnership adds eight (8) new equal partners. Partners C and D are admitted on January 1st, Partner E is admitted on March 1st and Partners F through J are admitted on May 1st. The addition of the third new partner, E, has the effect in the aggregate of transferring more than fifty percent (50%) of the total ownership interest in the partnership. The admission of partner E is a transfer of a controlling interest. However, a new twelve (12) month period starts whenever the tax is triggered (March 1st in our example) and the percentages of ownership acquired by the first, second and third new partners will not be considered or aggregated with the percentages acquired by the fourth or subsequent new partners.

517.6 Transfers of controlling interests may include transfers of interests in entities related to the entity owning the real property located in the District, including the following:

(a) Entities that are partners and shareholders of the entity owning the real property;

(b) Entities that are beneficiaries of the entity owning the real property;

(c) Entities that derive, directly or indirectly, any portion of their receipts from ownership of the entity owning the real property; or

(d) Entities that hold as an asset any legal, equitable, beneficial or other ownership interest, whether directly or indirectly, of the entity owning the real property.

Example: Corporation A is a holding company whose sole asset is one hundred percent (100%) of the stock of Corporation B. Corporation B owns real property located in the District, the value of which comprises more than eighty percent (80%) of its entire tangible asset holdings. The transfer of a controlling interest in Corporation A is subject to the recordation tax.

517.7 Ownership of notes or other receivables secured by interests in real property shall not result in the characterization of an entity as an entity with an interest in real property for purposes of this Act.

Example: X corporation holds notes or other receivables secured by real property located in the District. X holds no other interest in real property. The transfer of fifty-one percent (51%) of X corporation stock shall not be subject to tax.

History

• SOURCE: Final Rulemaking published at 36 DCR 8653, 8655 (December 29, 1989); as amended by Final Rulemaking published at 61 DCR 4717 (May 9, 2014). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 517

9 DCMR § 518 AGGREGATION OF TRANSFERS

518.1 For transfers executed on or after October 1, 1989, the Deputy Chief Financial Officer shall aggregate all transfers of interests in an entity subject to the Recordation of Economic Interests Act that are made within the twelve (12) month period prior to the most recent transfer in order to determine whether a controlling interest has been transferred.

518.2 If a transfer of an interest in an entity that is subject to the Recordation of Economic Interests Act occurs, the entity shall submit information concerning any transfers occurring during the previous twelve (12) months.

518.3 A controlling interest is transferred if the total aggregate percentage of interests transferred is more than fifty percent (50%) of the total percentage of the entity during any period of twelve (12) consecutive months, starting with the most recent transfer and counting back twelve (12) months.

Example: X corporation owns real property in the District, the value of which comprises more than eighty percent (80%) of its entire tangible asset holdings. A, B, C, D and E each own a one-fifth (1/5) interest in X corporation’s outstanding stock. A sells his entire one-fifth (1/5) interest on November 20, 1989. B sells his entire interest on May 18, 1990, and C cells his entire interest on November 10, 1990. All the transfers made within the twelve (12) month period that concluded on November 10, 1990, shall be aggregated to determine whether a controlling interest has been transferred. Accordingly, since more than fifty percent (50%) of X corporation’s stock was transferred within a twelve (12) month period, X corporation must record a deed evidencing the transfer, and pay the tax.

518.4 The Deputy Chief Financial Officer shall examine separately each transfer of an interest in an entity subject to the Recordation of Economic Interests Act to determine what percentage of the entity has been transferred.

Example: X corporation is owned equally by A, B, and C, and holds real property located in the District. On May 15, 1990, A sells her stock to D. On August 30, 1990, C sells her stock to D. C’s transfer when combined with the transfer of A’s interest constitutes a transfer of a controlling interest. During the period from August 31, 1989, through May 15, 1990, X corporation’s only asset was real property located in the District. In July, 1990, X corporation acquired non-real property assets, the value of which comprised fifty percent (50%) of X corporation’s total asset value. During the period from August 31, 1989, through August 30, 1990, X corporation derived more than fifty percent (50%) of its gross receipts from income generated by real property located in the District. The transfer of C’s stock to D on August 30, 1990, will subject X corporation to the recordation tax, because at the time of the transfer, X was an entity subject to the recordation tax based on the income test. If during the period from August 1, 1989, through August 30, 1990, X corporation did not derive more than fifty percent (50%) of its gross receipts from income generated by real property located in the District, then the transfer of C’s stock to D on August 30, 1990, would not be subject to the tax because X corporation did not derive more than fifty percent (50%) of its gross income from property located in the District nor did it meet the eighty percent (80%) asset test on the date of the transfer of the controlling interest.

518.5 If the same interest in an entity is sold more than once during the twelve (12) month period, the transactions involving the sale of that interest shall not be aggregated with each other.

518.6 Transfers of interests in entities subject to the Recordation of Economic Interests Act that occur more than twelve (12) months apart shall be aggregated if the transactions resulting in the transfer of interests are bargained for during any one twelve (12) month period.

Example: X corporation owns real property in the District. A, B and C each own one-third (1/3) of X corporation's outstanding stock. A and B bargain with D to sell their entire interest in X to D. B's sale occurs two (2) years after A's sale. A and B bargained to sell a controlling interest which must be recorded even though the actual sale was not consummated within twelve (12) months.

518.7 The Deputy Chief Financial Officer may request information for a period of up to three (3) years from the transfer in question to determine whether transactions occurring over more than a twelve (12) month period were bargained for during a twelve (12) month period.

518.8 A bargain, within the meaning of this chapter, includes an agreement to transfer an interest in an entity subject to the Recordation of Economic Interests Act, if the bargain is consummated.

History

• SOURCE: Final Rulemaking published at 36 DCR 8653, 8657 (December 29, 1989). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 518

9 DCMR § 519 CONSIDERATION ALLOCABLE TO REAL PROPERTY

519.1 The deed recordation tax is imposed upon the portion of the consideration from a transfer of an economic interest that is allocable to the value of the real property held by the entity subject to the Transfer of Economic Interests Act.

519.2 The allocation between the real property and the other assets of the entity shall be based upon the same allocation determined by the Deputy Chief Financial Officer to be reasonable under §§ 516.5 and 516.6 of this chapter.

519.3 Consideration shall include the amount of any mortgage, lien or other encumbrance, whether or not the underlying indebtedness is assumed.

Example: X corporation owns real property located in the District valued one million dollars ($ 1,000,000) encumbered with a three hundred thousand dollars ($ 300,000) mortgage, and machinery valued at five hundred thousand dollars ($ 500,000). Ninety percent (90%) of X’s gross receipts during the relevant period was from the real property. One hundred percent (100%) of the stock of X corporation is sold for one million two hundred thousand dollars ($ 1,200,000) in cash. The value of the real property, one million dollars ($ 1,000,000), is two-thirds (2/3) of the value of all of X corporation’s assets, one million five hundred thousand dollars ($ 1,500,000). The consideration includes the three hundred thousand dollars ($ 300,000) mortgage that was assumed. Two-thirds (2/3) of the consideration, one million dollars ($ 1,000,000), will be subject to the tax.

519.3a A purchase money mortgage or deed of trust securing indebtedness incurred to acquire an economic interest is exempt from tax if it is recorded simultaneously with the filing of the economic interest deed.

519.4 The Deputy Chief Financial Officer shall determine the consideration allocated to the real property for each separate transaction that is aggregated to determine the total consideration subject to the tax.

519.5 For aggregated transfers, the Deputy Chief Financial Officer shall use the fair market value of the properties at the time of each transfer to determine the total consideration subject to the tax.

Example: X corporation is owned equally by A, B and C. X owns real property located in the District with a tax assessed value of nine hundred thousand dollars ($ 900,000), and assets other than real property valued at one hundred thousand dollars ($ 100,000). On January 15, 1990, A sells her stock to D for three hundred thousand dollars ($ 300,000). On June 20, 1990, X renovates the real property, which increases the estimated fair market value to one million nine hundred thousand dollars ($ 1,900,000). On August 4, 1990, B sells his stock to D for five hundred thousand dollars ($ 500,000). The transfer from B to D is a transfer of a controlling interest. The portion of the consideration of A's transfer to D that is subject to the recordation tax is two hundred seventy thousand dollars ($ 270,000). One-tenth (1/10) of the value of the assets at the time of the sale, thirty thousand dollars ($ 30,000), is attributable to non-real property assets, therefore, one-tenth (1/10) of the purchase price of the stock is excluded from the tax. The portion of the consideration of B's sale to D that is subject to the tax is four hundred seventy-five thousand dollars ($ 475,000). One-twentieth (1/20) of the purchase price of the stock at the time of sale, twenty-five thousand dollars ($ 25,000), is attributable to assets other than real property and is excluded from the tax.

History

• SOURCE: Final Rulemaking published at 36 DCR 8653, 8655 (December 29, 1989); as amended by Final Rulemaking published at 61 DCR 4717 (May 9, 2014); as amended by Final Rulemaking published at 65 DCR 1450 (February 9, 2018). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 519

9 DCMR § 520 MERGERS, CONSOLIDATIONS AND LIQUIDATIONS

520.1 The merger or consolidation of an entity that is subject to the Recordation of Economic Interests Act with another entity may result in a taxable transfer.

Example (1): Corporation X, wholly owned by A, and which holds as its only asset real property in the District, merges with Corporation Y, owned by B and C, which holds as its only asset cash. The surviving corporation is owned equally by A, B, and C. The merger subjects the surviving corporation to the recordation tax, because a controlling interest was transferred within the meaning of the Act.

Example (2): Corporations W, X and Y hold real property located in the District as their only assets. There are no identical or related ownership interests in any of the corporations. The three (3) corporations consolidated forming corporation Z owned equally by the prior shareholders of W, X and Y. Corporation Z is required to record the transfers and pay the tax because more than fifty percent (50%) of the controlling interest in each of the respective corporations was transferred.

520.2 A transfer to a parent in complete liquidation of a wholly owned subsidiary that is subject to the Recordation of Economic Interests Act shall not be considered a transfer of an economic interest. However, a liquidating distribution of the real property shall be a taxable transfer under the Act.

History

• SOURCE: Final Rulemaking published at 36 DCR 8653 (December 29, 1989); as amended by Final Rulemaking published at 61 DCR 4717 (May 9, 2014). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 520

9 DCMR § 521 [RESERVED]

9 DCMR § 522 TRUSTS

522.1 A transfer of a controlling interest in a trust shall not include transfers of equitable interests between beneficiaries that occur as a result of the operation of the terms of the trust, unless circumstances show that the trust was established to avoid taxation of the transfer of real property.

522.2 Mere substitution of trustees shall not be subject to the Recordation of Economic Interests Act.

History

• SOURCE: Final Rulemaking published at 36 DCR 8653, 8661 (December 29, 1989). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 522

9 DCMR § 523 MISCELLANEOUS

523.1 A transfer of a controlling interest from one (1) entity to another in which there is no change in ultimate ownership interest shall not be subject to the Recordation of Economic Interests Act.

523.2 New stock certificates issued to owners of record of a corporation based solely on a change in the name of the corporation shall not be subject to the recordation tax.

523.3 The transfer of a controlling interest by a corporation to its wholly-owned subsidiary, from a wholly-owned subsidiary to its parent, or from one wholly- owned subsidiary to another shall be considered a change of identity and not subject to the Recordation of Economic Interests Act.

523.4 The exclusion of a transfer from recordation under the Recordation of Economic Interests Act shall not prevent the same transfer from being subject to taxation under any other Act or rule of law.

History

• SOURCE: Final Rulemaking published at 36 DCR 8653 (December 29, 1989); as amended by Final Rulemaking published at 61 DCR 4717 (May 9, 2014). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 523

9 DCMR § 524 REPORTING TRANSFERS

524.1 Every corporation that owns real property in the District comprising at least forty percent (40%) of its gross assets shall keep a record of the transfer of its stock and report every transfer of an interest of its stock on an income and expense form under 9 DCMR § 330.

524.2 Every partnership, trust, estate or other entity having interest in real property in the District comprising at least forty percent (40%) of its gross assets shall keep a record of and report every transfer of interests in its capital, profits or beneficial interests on an income and expense form under 9 DCMR § 330.

524.3 The Deputy Chief Financial Officer may request supplemental information to be submitted to substantiate whether a transfer of an economic interest has occurred.

History

• SOURCE: Final Rulemaking published at 36 DCR 8653, 8662 (December 29, 1989). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 524

9 DCMR § 525 FILING REQUIREMENTS

525.1 A deed, in the form prescribed by the Deputy Chief Financial Officer, shall be filed within thirty (30) days of a transfer of an economic interest by the entity in which the transfer has occurred.

525.2 The form of deed to record transfers of economic interests and accompanying returns shall be available at the Office of Recorder of Deeds.

525.3 Deeds and accompanying returns evidencing transfers of economic interests shall be subject to rules for filing with the Recorder of Deeds as found in §§ 502 through 508 of this chapter.

History

• SOURCE: Final Rulemaking published at 36 DCR 8653, 8662 (December 29, 1989). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 525

9 DCMR § 526 [RESERVED]

History

• SOURCE: Final Rulemaking published at 36 DCR 8653 (December 29, 1989); as amended by Final Rulemaking published at 61 DCR 4717 (May 9, 2014). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 526

9 DCMR § 527 RESIDENTIAL PROPERTIES

527 The phrase “residential properties” as referenced in D.C. Official Code § 42-1103(a-4) shall have the same meaning as Class 1 Property, as defined by D.C. Official Code § 47-813(c-8)(2), or such other section under D.C. Official Code § 47-813 as may supersede D.C. Official Code § 47-813(c-8)(2).

History

• SOURCE: Final Rulemaking published at 60 DCR 3634 (March 15, 2013). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 527

9 DCMR § 528 REVOCABLE TRUSTS

528.1 The term “revocable” shall mean that the grantor, settlor, transferor, creator or trustor of the trust has the right to recover property transferred to the trust and to end the trust at any time, thereby regaining absolute ownership of the trust property.

528.2 A trust is revocable if the grantor, settlor or trustor expressly reserves the power to revoke the trust under the terms of the trust instrument.

528.3 If a power to revoke is not expressly reserved, the revocability of the trust is determined under the law governing the trust. Trusts created under District law prior to March 10, 2004 are presumed irrevocable, while District trusts created on or after that date are presumed revocable.

528.4 The grantor, settlor, transferor, creator or trustor of a revocable trust is deemed to be the present beneficiary of the trust.

528.5 For purposes of determining eligibility for the reduced rate of recordation tax provided under Section 303(e) of the District of Columbia Deed Recordation Tax Act of 1962, approved March 2, 1962 (76 Stat. 11; D.C. Official Code § 42-1103(e) (2013 Repl.)), the grantee of a deed conveying real property to a revocable trust (as defined under this section), or the trustee of such a trust, shall be deemed to be the individual grantor, settlor, transferor, creator or trustor of such trust, and the determination of entitlement to the reduced tax rate shall be made based upon such individual without regard to the existence of such revocable trust.

History

• SOURCE: Final Rulemaking published at 65 DCR 1453 (February 9, 2018); as amended by Final Rulemaking published at 65 DCR 3402 (March 30, 2018). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 528

9-6 REAL PROPERTY TRANSFER TAX

9 DCMR § 600 GENERAL PROVISIONS

600.1 The provisions of this chapter are adopted under authority set forth in § 416 of the "District of Columbia Revenue Act of 1980" (also referred to in this chapter as the "Act"); D.C. Law 3-92 (effective Sept. 13, 1980); D.C. Code § 47-916 (1981 Ed.).

600.2 For the purposes of this chapter, the words, terms, and phrases defined in the Act shall have the same meanings when used in this chapter, unless otherwise required by the context of this chapter.

600.3 When used in this chapter, the term "Deputy Chief Financial Officer" means the Deputy Chief Financial Officer of the Office of Tax and Revenue ("Office"), or the Deputy Chief Financial Officer's lawfully appointed agent, representative, or designee.

600.4 When used in this chapter, the term "Recorder of Deeds" shall mean the Recorder of Deeds of the District of Columbia, or his or her lawfully appointed agent, representative, or designee.

600.5 When used in the Act, the term "parent" means a person who is the natural parent of a child or a person who has legally adopted a child. The term "child" includes both minors and adults.

600.6 When used in the Act and this chapter the term "fair market value" means the price at which a willing seller and a willing buyer will trade, or the price which would in all probability have been arrived at between a willing seller and a willing buyer.

History

• AUTHORITY: Unless otherwise noted, the authority for this chapter is § 416 of the District of Columbia Revenue Act of 1980, D.C. Law 3-92, D.C. Code § 47-916 (1981 Ed.).
• SOURCE: Final Rulemaking published at 27 DCR 4929 (November 7, 1980), incorporating text of Proposed Rulemaking published at 27 DCR 3347, 3349 (August 1, 1980).
• EDITOR'S NOTE: The Office of the Chief Financial Officer of the District of Columbia published a Notice of Public Interest at 44 DCR 2345 (April 18, 1997) changing the name of the “Department of Finance and Revenue” to the "Office of Tax and Revenue."

9 DCMR § 601 EXEMPTIONS FROM THE TRANSFER TAX

601.1 In addition to the exemptions specifically enumerated in § 402 of the Act (D.C. Code § 47-902), the exemptions set forth in this section shall apply to the tax.

601.2 Transfers under wills and leases shall be exempt from the transfer tax in accordance with §§ 401 and 403 of the Act.

601.3 The exemption of transfers of property by the United States or the District under § 402 of the Act shall include deeds to property acquired by an agency or instrumentality of either government, and shall include the transfer of property sold by the District for delinquent District real property taxes.

601.4 A transfer which, under its terms, is limited exclusively to securing a debt or other obligation shall be exempt from the transfer tax.

601.5 A transfer which, without additional consideration, is limited exclusively to confirming, correcting, modifying, or supplementing a deed previously recorded shall be exempt from the transfer tax.

History

• SOURCE: Final Rulemaking published at 27 DCR 4929 (November 7, 1980), incorporating text of Proposed Rulemaking published at 27 DCR 3347, 3350 (August 1, 1980).

9 DCMR § 602 PAYMENT OF THE TRANSFER TAX

602.1 The basis for the tax is the transfer of real property and, except as otherwise provided in the Act or this chapter, the tax shall be paid within thirty (30) days of the transfer, and at the same time the deed evidencing the transfer is submitted for recordation.

602.2 The measure of the tax shall be the consideration for the transfer of the property conveyed by the deed.

602.3 The term "consideration," as defined in § 401 of the Act, as amended, (D.C. Code § 47-901(5)), includes consideration actually paid or ultimately required to be paid for real property, whether that consideration is in the form of cash or is in some other form.

602.4 If there is no consideration for the property which is the subject of the transfer (or if the consideration is nominal), consideration is construed to be the fair market value of the real property involved, in accordance with § 404 of the Act, the fair market value shall be subject to review by the Office.

602.5 The term "fair market value" shall have the same meaning as defined in D.C. Code § 47-802(4).

602.6 The term "nominal consideration" means any price paid or any item exchanged in return for title to real property which bears no reasonable resemblance to the fair market value of the real property. If the consideration paid is less than 30% of the fair market value of the property, it shall be deemed to bear no reasonable resemblance to the fair market value of the property and, therefore, shall be deemed to be nominal.

602.7 The following formula shall be applied for purposes of determining if the consideration paid is ‘nominal’:

The fair market value of the real property shall be multiplied by 30%. If the consideration paid is less than 30% of the fair market value of the real property for which a deed is submitted for recordation, the consideration paid shall be deemed to be nominal. If the consideration paid is deemed nominal, the transfer tax shall be based on the fair market value of the property. If the consideration paid is equal to or greater than 30% of the fair market value of the real property for which a deed is submitted for recordation, the consideration paid shall not be deemed to be nominal.

602.8 Examples:

1 The consideration stated on the transfer tax return is $ 20,000 and the fair market value of the property for which a deed is submitted for recordation is $ 75,000.00. 30% of the fair market value of the property is $ 22,500 ($ 75,000.00 X .30 = $ 22,500.00). Since the consideration paid is less than 30% of the fair market value of the real property, the consideration paid shall be deemed to be nominal. In this case, the transfer tax shall be based upon the fair market value of the property. Therefore, the transfer tax shall be computed as follows:

($ 75,000 X 100%) X .011 = $ 825 (transfer tax due)

2 The consideration stated on the transfer tax return is $ 40,000 and the fair market value of the property for which a deed is submitted for recordation is $ 100,000. 30% of the fair market value of the property is $ 30,000 ($ 100,000 X .30 = $ 30,000). Since the consideration paid is more than 30% of the fair market value of the property, the consideration paid shall not be deemed to be nominal. In this case, the transfer tax shall be based on the higher of the assessed value or sales price. Therefore, the transfer tax shall be computed as follows:

$ 100,000 (assuming Recorder of Deeds determines assessed value equals fair market value) X .011 = $ 1,100 (transfer tax due)

3 The consideration stated on the transfer tax return is $ 36,000 and the fair market value of the property for which a deed is submitted for recordation is $ 120,000. 30% of the fair market value of the property is $ 36,000 ($ 120,000 X .30 = $ 36,000). Since the consideration paid is equal to 30% of the fair market value of the real property, the consideration paid shall not be deemed to be nominal. In this case, the transfer tax shall be based on the higher of the assessed value or sales price. Therefore, the transfer tax shall be computed as follows:

$ 120,000 (assuming Recorder of Deeds determines assessed value equals fair market value) X .011 = $ 1,320 (transfer tax due)

602.9 If the Recorder of Deeds determines that the consideration paid is nominal, the transfer tax shall be determined based on the fair market value of the property for which a deed is submitted for recordation. The transfer tax determined shall be paid at the time the deed is recorded before the deed shall be accepted for recordation.

602.10 In determining whether consideration paid is nominal, the Recorder of Deeds may use his discretion in considering any information available to him at the time of recordation from which the market value of the property may be determined. Such information may include, but is not limited to:

a) the current assessed value of the property;

b) a certified appraisal report that is not more than six months old;

c) a contract for sale of the property;

d) the settlement sheet for the sale of the real property; and

e) any other document upon which the fair market value of the property may be determined.

602.11 Any taxpayer aggrieved by a determination made by the Recorder of Deeds that the consideration paid is nominal may file a claim for refund in accordance with D.C. Code §§ 47-915 and 47-3310.

602.12 Any taxpayer aggrieved by a determination made by the Recorder of Deeds of the fair market value used for purposes of calculating the transfer tax may file a claim for refund in accordance with D.C. Code §§ 47-915 and 47-3310. Evidence of market value shall be submitted with the claim for refund.

602.13 The provisions set forth in this section shall apply to all deeds submitted to the Recorder of Deeds for recordation, including deeds for foreclosure real estate transactions and deeds “in lieu of foreclosure.”

History

• SOURCE: Final Rulemaking published at 27 DCR 4929 (November 7, 1980), incorporating text of Proposed Rulemaking published at 27 DCR 3347, 3350 (August 1, 1980); as amended by Final Rulemaking at 46 DCR 8267 (October 15, 1999); as amended by Final Rulemaking published at 56 DCR 6051 (July 31, 2009).

9 DCMR § 603 TRANSFER TAX RETURNS

603.1 Except as otherwise specifically provided in this chapter, each transfer submitted to the Recorder of Deeds for recordation on or after August 1, 1980, shall be accompanied by a return under oath, executed by all the parties to the transfer.

603.2 In the case of a party to a transfer who is unable to execute a return by reason of minority or other disability, the return shall be executed by the person or persons duly authorized to act for and on behalf of the party under disability, and the person or persons executing a return on behalf of such a party shall be liable for payment of the tax imposed upon the transfer.

603.3 Returns shall be in such form or on a form as the Deputy Chief Financial Officer, in consultation with the Recorder of Deeds, shall prescribe.

603.4 Each return shall set forth the consideration for the property, the amount of tax payable, if any, and such other information as the Deputy Chief Financial Officer shall require.

603.5 In the case of a transfer for which exemption from the tax is claimed, the return shall show the basis for exemption.

603.6 Where exemption is claimed under D.C. Code § 47-902(3), or 47-902(4), the return shall also show the purpose or purposes for which the property was acquired and shall be accompanied by such documents and other information as the Deputy Chief Financial Officer may deem necessary to determine the exempt or taxable status of the transfer.

History

• SOURCE: Final Rulemaking published at 27 DCR 4929 (November 7, 1980), incorporating text of Proposed Rulemaking published at 27 DCR 3347, 3351 (August 1, 1980).

9 DCMR § 604 RECORDATION OF EXEMPT TRANSFERS WITHOUT FILING A RETURN

604.1 Except as otherwise provided in this section, the following exempt transfers may be accepted for recordation without the filing of a return:

(a) Transfers of property by the United States or the District of Columbia or by agencies and instrumentalities of either;

(b) Tax deeds executed by the District of Columbia government pursuant to the provisions of law pertaining to the assessment and collection of D.C. real property taxes; and

(c) A transfer evidenced by a deed, the sole purpose of which is to release property which is security for a debt or other obligation.

604.2 The submission of a deed evidencing transfer for recordation without a return shall constitute a representation by the parties to the transfer that the deed, in all respects, meets the requirements of the Act and this section.

604.3 Notwithstanding the provisions of §§ 604.1 and 604.2, the Recorder of Deeds, in any case where a deed evidencing transfer is submitted for recordation without a return, may reject the deed for recordation unless a return is filed if, in his or her judgment, it appears from the deed or other information in the possession of the Recorder of Deeds that the transfer does not conform with the provisions of this section and that a return is required for the purpose of determining whether the transfer is, in fact, exempt from tax.

604.4 If the Recorder of Deeds rejects a deed for recordation under § 604.3, he or she shall notify the Deputy Chief Financial Officer of the action and the transfer shall be reviewed by the Deputy Chief Financial Officer to determine its status.

604.5 If the Deputy Chief Financial Officer concludes that a return is required, he or she shall notify the parties to the transfer at the addresses shown on the statement accompanying the deed. The parties shall file a return with the Deputy Chief Financial Officer. The Deputy Chief Financial Officer shall determine whether the transfer is exempt or taxable; if taxable, the amount of tax; and shall notify the Recorder of Deeds of the determination. If the deed is otherwise recordable, the Recorder of Deeds shall record it upon presentation and payment of any tax determined by the Deputy Chief Financial Officer to be due.

History

• SOURCE: Final Rulemaking published at 27 DCR 4929 (November 7, 1980), incorporating text of Proposed Rulemaking published at 27 DCR 3347, 3352 (August 1, 1980); as amended by Final Rulemaking published at 37 DCR 5691 (August 31, 1990).

9 DCMR § 605 EXTENSION OF TIME FOR FILING RETURNS

605.1 The Deputy Chief Financial Officer may, in his or her discretion, for good cause shown grant to a party to a transfer a reasonable extension of time not to exceed six (6) months for the filing of a return by that party.

605.2 The party seeking an extension shall apply to the Deputy Chief Financial Officer for the extension in writing, stating the reason(s) for the extension and any other information required by the Deputy Chief Financial Officer.

605.3 If an extension of time for filing a return has been granted by the Deputy Chief Financial Officer, the Deputy Chief Financial Officer shall notify the Recorder of Deeds in writing of the action. The Recorder of Deeds, upon receipt of a return from each of the other parties to the deed and payment of the applicable tax, shall (if the deed evidencing the transfer is otherwise recordable) be authorized to record the deed without the filing of a return by the party to whom an extension has been granted.

History

• SOURCE: Final Rulemaking published at 27 DCR 4929 (November 7, 1980), incorporating text of Proposed Rulemaking published at 27 DCR 3347, 3351 (August 1, 1980).

9 DCMR § 606 WAIVER OF THE FILING OF A RETURN

606.1 Whenever the Deputy Chief Financial Officer determines that a party to a transfer cannot file a return, the Deputy Chief Financial Officer is authorized, in his or her discretion, to waive the requirement for the filing of a return by that party. In such cases, the Deputy Chief Financial Officer may require any affidavits, documents, and statements to be submitted that are deemed necessary by the Deputy Chief Financial Officer for a determination whether a waiver should be granted.

606.2 Any waiver granted by the Deputy Chief Financial Officer to a party shall not, unless specifically authorized, be deemed to be a waiver as to any other party, and that waiver shall not affect the requirement for payment of the tax applicable to the transfer at the time the deed evidencing the transfer is submitted for recordation.

606.3 Upon notification in writing from the Deputy Chief Financial Officer that a waiver has been granted, the Recorder of Deeds shall be authorized to record the deed (if the deed is otherwise recordable) without the filing of a return by the party to whom the waiver applies.

History

• SOURCE: Final Rulemaking published at 27 DCR 4929 (November 7, 1980), incorporating text of Proposed Rulemaking published at 27 DCR 3347, 3351 (August 1, 1980).

9 DCMR § 607 SECURITY FOR PAYMENT OF TAX

607.1 Whenever it is determined that a deed evidencing transfer submitted for recordation cannot be recorded by reason of failure of the parties to file a proper return or by reason of question as to the correct amount of tax, the Deputy Chief Financial Officer is authorized to accept such security in such form(s) as, in the discretion of the Deputy Chief Financial Officer, may be necessary to insure that the tax which is or may be applicable to the transfer is paid.

607.2 Upon being notified of the acceptance of the security by the Deputy Chief Financial Officer, the Recorder of Deeds shall record the deed evidencing transfer if it is otherwise recordable.

607.3 After accepting the security and notifying the Recorder of Deeds, the Deputy Chief Financial Officer shall determine the applicable tax.

607.4 Upon payment of the tax due, the Deputy Chief Financial Officer shall return the security to the person or persons from whom it was obtained.

607.5 If payment of the tax is not made, the Deputy Chief Financial Officer shall, so far as is possible, collect the tax out of the security previously paid to the Deputy Chief Financial Officer. If there is any excess security, the Deputy Chief Financial Officer shall return that excess to the person or persons from whom it was obtained.

607.6 If the security is inadequate for collection of the entire amount of tax, the parties to the deed shall be liable jointly and severally for the balance of the tax due.

History

• SOURCE: Final Rulemaking published at 27 DCR 4929 (November 7, 1980), incorporating text of Proposed Rulemaking published at 27 DCR 3347, 3353 (August 1, 1980).

9 DCMR § 608 INSPECTION OF RETURNS AND OTHER DOCUMENTS RELATED TO DEEDS

608.1 Except as otherwise provided in the Act or this section, all returns and other documents pertaining to deeds evidencing transfers of real property which are filed with the Recorder of Deeds or the Deputy Chief Financial Officer pursuant to the Act or this chapter shall be available for inspection only to the following:

(a) The person or persons filing the return or document;

(b) An official or employee of the District who has duties and responsibilities in connection with those returns or documents;

(c) An official of the government of the United States when acting in his or her official capacity; and

(d) An official of a state or political subdivision of a state when acting in his or her official capacity, if similar privileges are accorded to District audit officials by that state or political subdivision.

608.2 Information on the amount of tax paid upon the recordation of a deed shall be available to the public.

History

• SOURCE: Final Rulemaking published at 27 DCR 4929 (November 7, 1980), incorporating text of Proposed Rulemaking published at 27 DCR 3347, 3353 (August 1, 1980).

9 DCMR § 609 NAKED TITLE DEEDS

609.1 If the grantee named in a recorded deed upon which the applicable tax has been paid acted as a nominal grantee for the sole purpose of holding, on behalf of another person, naked title to the property described in the deed, a deed to that property subsequently executed by the nominal grantee, without consideration, naming as grantee the person on whose behalf the nominal grantee acted, shall be exempt from tax as a deed which, without additional consideration, confirms, corrects, modifies, or supplements a deed previously recorded.

609.2 If the owners of an estate in real property have, for the sole purpose of changing their estate (for example, in the case of a change from a tenancy in common to a joint tenancy) executed a deed to a nominal grantee holding naked title to the property, who, in turn, and without consideration, executes a deed to the same owners so as to effect the change of estate desired, the deeds so executed shall be exempt from tax as deeds which, without additional consideration, confirm, correct, modify, or supplement a deed previously recorded.

609.3 If an exemption is claimed under this section, the right to the exemption must be established to the satisfaction of the Deputy Chief Financial Officer upon the presentation to the Deputy Chief Financial Officer of such returns, documents, and other information that the Deputy Chief Financial Officer, in his or her discretion, may require.

History

• SOURCE: Final Rulemaking published at 27 DCR 4929 (November 7, 1980), incorporating text of Proposed Rulemaking published at 27 DCR 3347, 3353 (August 1, 1980).

9 DCMR § 610 TRANSFERS PURSUANT TO FORECLOSURE PROCEEDINGS

610.1 Transfers of property pursuant to foreclosure sales shall be subject to the tax imposed by § 403 of the Act (D.C. Code § 47-903) regardless of the identity of the grantee named in the deed issued pursuant to the sale, including a grantee who is the original secured party or mortgagee under the deed of trust or mortgage which secured the debt or other obligation on the property transferred.

610.2 Transfers of property which occur pursuant to a deed issued in place of a foreclosure sale shall be subject to the tax imposed by § 403 of the Act (D.C. Code § 47-903) regardless of the identity of the grantee named in the deed, issued in place of the foreclosure sale, including a grantee who is the original secured party or mortgagee under the deed of trust or mortgage which secured the debt of other obligation on the property transferred.

610.3 For the purposes of this section, the measure of the tax shall be the consideration for the transfer as provided in § 403 of the Act.

610.4 The provisions of § 602 of this chapter shall apply to this section.

History

• SOURCE: Final Rulemaking published at 31 DCR 1205, 1206 (March 9, 1984).

9 DCMR § 611 TRANSFERS OF REVOCABLE TRUST DEEDS

611.1 If the settlor of a revocable trust deed who retains a right of revocation exercises such right of revocation, and the trustee thereby transfers legal title from the trustee back to the settlor as beneficial owner, the transfer shall be exempt from the transfer tax pursuant to § 402(8) of the Act (D.C. Code § 47-902(8)) (1981 Ed.) as a deed which without additional consideration, confirms, modifies, or supplements a deed previously recorded.

History

• SOURCE: Final Rulemaking published at 32 DCR 327, 323 (January 18, 1985); as amended by Final Rulemaking published at 54 DCR 10644 (November 2, 2007).

9 DCMR § 612 RESIDENTIAL PROPERTIES

612 The phrase “residential properties” as referenced in D.C. Official Code § 47-903(a-4) shall have the same meaning as Class 1 Property, as defined by D.C. Official Code § 47-813(c-8)(2), or such other section under D.C. Official Code § 47-813 as may supersede D.C. Official Code § 47-813(c-8)(2).

History

• SOURCE: Final Rulemaking published at 60 DCR 3634 (March 15, 2013).

9 DCMR § 613 REVOCABLE TRUSTS

613.1 The term “revocable” shall mean that the grantor, settlor, transferor, creator or trustor of the trust has the right to recover property transferred to the trust and to end the trust at any time, thereby regaining absolute ownership of the trust property.

613.2 A trust is revocable if the grantor, settlor or trustor expressly reserves the power to revoke the trust under the terms of the trust instrument.

613.3 If a power to revoke is not expressly reserved, the revocability of the trust is determined under the law governing the trust. Trusts created under District law prior to March 10, 2004 are presumed irrevocable, while District trusts created on or after that date are presumed revocable.

613.4 The grantor, settlor, transferor, creator or trustor of a revocable trust is deemed to be the present beneficiary of the trust.

History

• SOURCE: Final Rulemaking published at 65 DCR 1454 (February 9, 2018). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 613

9-7 PERSONAL PROPERTY TAX

9 DCMR § 700 GENERAL PROVISIONS

700.1 The provisions of this chapter shall govern the filing of personal property tax returns and the payment of the personal property tax in the District of Columbia.

700.2 For the purposes of this section, the words, terms and phrases defined in § 2 of the Act shall have the same meanings when used in this chapter.

700.3 For purposes of this section, the following words shall have the meanings set forth in this subsection:

(a) "Actual cost" means cash price or its equivalent value plus all other costs (including installation and delivery) necessary to make an asset ready for intended use. The actual cost shall not include trade-in allowance;

(b) "Assessment date" means July 1st;

(c) "Office" means the Office of Tax and Revenue;

(d) "Fiduciary" means a trustee, guardian, executor, administrator or receiver;

(e) "Leasehold improvements" means additions or improvements made to the property at the expense of the lessor or lessee;

(f) "Material injury" means serious physical damage or substantial degree of damage to the property which renders it to be nonfunctional;

(g) "Original cost" with respect to any item of personal property means as follows:

(1) In the case of acquisition by purchase, the actual cost of acquiring the property to the purchaser;

(2) In the case of tangible personal property fabricated and erected by the taxpayer for its own use, original cost includes in addition to the cost of any goods which become a part of the finished property, all direct and indirect costs of engineering, design, construction and erection;

(3) In the case of acquisition by an exchange of property, the fair market value of the property given in exchange or, if such property has no market value, the original cost of the property given in exchange;

(4) In the case of property acquired from a decedent's estate, the fair market value of the property at the time of the decedent's death;

(5) In the case of property acquired as a gift for no consideration, the original cost to the last owner of the property who acquired it for a consideration; and

(6) In the case of sale of the business, the fair market value of the property at the time of the sale;

(h) "Semipublic institution" means any corporation and any community chest, fund, or foundation, organized exclusively for religious, scientific, charitable, or educational purposes, including hospitals, no part of the net earnings of which inures to the benefit of any private shareholder or individual; and

(i) "Taxable situs" means the physical location of the personal property.

700.4 The obligation to file a return shall not be diminished or affected by the failure of the Office to deliver or mail forms to a taxpayer. It is the responsibility of the taxpayer to obtain forms from the Office and file a timely return.

700.5 Any person filing an application for extension of time to file a personal property tax return shall attach a copy of the application to the return when filed.

700.6 When filing a written request for a hearing in response to the notice of tax deficiency, the taxpayer shall make a statement as to the issues in dispute and submit the laws, regulations, and facts in support of the taxpayer's contentions on the disputed issues.

History

• AUTHORITY: Unless otherwise noted, the authority for this chapter is the Personal Property Tax Amendment Act of 1986, effective February 28, 1987, D.C. Law 6-212, D.C. Code 47-1521 et seq. (1981 Ed.).
• SOURCE: Final Rulemaking published at 35 DCR 6014 (August 5, 1988).
• EDITOR'S NOTE: Prior to August 5 1988. the Department of Finance and Revenue published Final Rulemaking notice at 22 DCR 4445 (February 17, 1976).The Office of the Chief Financial Officer of the District of Columbia published a Notice of Public Interest at 44 DCR 2345 (April 18, 1997) changing the name of the "Department of Finance and Revenue" to the "Office of Tax and Revenue."

9 DCMR § 701 LEASED TANGIBLE PERSONAL PROPERTY

701.1 Leased tangible personal property is any tangible personal property which is leased, rented, used or otherwise made available to a person other than the owner under a written or unwritten bailment agreement.

701.2 Leases shall be classified as either capital leases or operating leases.

701.3 Capital Leases shall include sales-type leases, direct financing leases and leveraged leases.

701.4 Capital Leases shall be capitalized by the lessee for federal income tax purposes, and shall meet one or more of the following conditions:

(a) Ownership of the tangible personal property is transferred to the lessee at, or before, the end of the lease term;

(b) The lease permits the lessee to purchase the property or renew the lease at a price or rental which is substantially less than the estimated market value or fair rental of the leased property at the time of the option to purchase or renew the lease is exercised;

(c) Some portion of the periodic payments is specifically designated as interest or is otherwise readily recognizable as the equivalent of interest;

(d) The lease term is equal to seventy-five percent (75%) or more of the estimated economic life of the leased property; or

(e) The present value of the minimum lease payments equals or exceeds ninety percent (90%) of the fair market value of the leased property at the inception of the lease.

701.5 Operating Leases shall include all other leases.

701.6 Tangible personal property is deemed to be leased at the time the property is actually in the possession of the lessee under a contract of lease.

701.7 The lessee of tangible personal property covered by a capital lease has the responsibility for reporting the property for taxation and assessment on the return if the leased tangible personal property is physically located in the District of Columbia on the assessment date.

701.8 The lessor of tangible personal property covered by an operating lease has the responsibility for reporting such property for taxation and assessment on the return if the leased tangible personal property is physically located in the District of Columbia on the assessment date. The fact that lessee pays the personal property tax as specified in the operating lease contract does not relieve the lessor's responsibility for reporting the tangible personal property.

701.9 Any tangible personal property which is covered by an operating lease and which is leased to a nonprofit organization or an agency of the federal, state or local government shall be reported for taxation and assessment on the return by the lessor if the leased tangible personal property is physically located in the District of Columbia on the assessment date.

701.10 Any tangible personal property covered by a capital lease which is leased to a nonprofit organization that does not have a personal property tax exemption shall be reported for assessment and taxation on the return by the lessee if the leased tangible personal property is physically located in the District of Columbia on the assessment date.

701.11 Any lessor of tangible personal property covered by a capital lease, who is required to file the return for his or her own tangible personal property, shall report on the return the type of property, lessee's name and complete address, original retail cost, commencement date of the lease and annual rental cost.

701.12 Any lessee of tangible personal property covered by an operating lease, who is required to file the return for his or her own tangible personal property, shall report on the return of the following:

(a) The type of property;

(b) The lessor's name and complete address;

(c) The original retail cost;

(d) The commencement date of the lease; and

(e) The annual rental cost.

701.13 When the leased tangible personal property is taxed to the lessee, it shall be valued at full and true value (original cost), as if the lessee is the owner of the property at the inception of the lease term.

History

• SOURCE: Final Rulemaking published at 35 DCR 6014, 6016 (August 5, 1988).
• EDITOR'S NOTE: Prior to August 5, 1988, the Department of Finance and Revenue published Final Rulemaking notice at 22 DCR 4445 (February 17, 1976).

9 DCMR § 702 LEASEHOLD IMPROVEMENTS

702.1 Any real property improvement that does not become an integral part of the realty and leasehold improvements shall be subject to personal property tax if the improvement meets the following conditions:

(a) Primary function of the improvement is distinct and different from the functions ordinarily performed by the realty;

(b) The improvement is devoted primarily to the functions of the business conducted by the person who made the annexation;

(c) The improvement can be removed without material injury to the real property;

(d) The improvement can be removed without material injury to the improvement itself; and

(e) The improvement is not intended to be affixed permanently to real property by the person who makes the annexation at that time.

702.2 For purposes of § 702.1(e), the intention of the person making the annexation shall be inferred from the following;

(a) The nature of the affixed improvement;

(b) The relationship of the person making the annexation to the owner of the real property and the circumstances surrounding the transaction between these parties;

(c) The structure and mode of annexation;

(d) The existence of an agreement between the parties involved; and

(e) The purpose or use for which the annexation has been made.

702.3 Leasehold improvements shall include, but are not limited to, the following:

(a) Foundations;

(b) Pilings; and

(c) Supports related to the installation and use of personal property.

702.4 Improvements to real property that are personal property include, but are not limited to, personal property attached to the extent that the items are related to activities or processes conducted within or without the real property if the personal property is an integral part of the activity.

702.5 The following are examples of improvements to real property which are personal property for purposes of this section and the Act:

(a) Shelving, bins, counters, and related items;

(b) Nonpermanent partitions;

(c) Supplemental heating; humidification, and air conditioning;

(d) Extraordinary lighting; electrical and plumbing facilities;

(e) Carpeting over finished floor; and

(f) Draperies used as secondary window covering.

702.6 Any improvement to be taxed as personal property shall be valued in the same manner as any other depreciable personal property owned.

History

• SOURCE: Final Rulemaking published at 35 DCR 6014, 6017 (August 4, 1988).
• EDITOR'S NOTE: Prior to August 5, 1988, the Department of Finance and Revenue published Final Rulemaking notice at 22 DCR 4445, 4447 (February 17, 1976).

9 DCMR § 703 SPECIAL EQUIPMENT MOUNTED ON A MOTOR VEHICLE OR TRAILER

703.1 Special equipment mounted on a motor vehicle or trailer and not used primarily for the transportation of persons or property shall be taxed as tangible personal property.

703.2 For the valuation of special equipment, the original cost allocated to the registered motor vehicle or trailer shall be excluded from the total original cost of the special equipment and the registered motor vehicle or trailer.

History

• SOURCE: Final Rulemaking published at 35 DCR 6014, 6018 (August 5, 1988).
• EDITOR'S NOTE: Prior to August 5, 1988, the Department of Finance and Revenue published Final Rulemaking notice at 22 DCR 4445, 4448 (February 17, 1976).

9 DCMR § 704 REPORTING REQUIREMENTS

704.1 Construction companies, doing business in the District of Columbia at any time from July 2nd of the preceding tax year to July 1st of the current tax year, shall apportion the current value of tangible personal property as of July 1st of the current tax year in accordance with the number of days the tangible personal property was temporarily located in the District of Columbia.

704.2 Any person owning or holding in trust any tangible personal property located or having taxable situs in two (2) or more business locations within the District of Columbia on the assessment date shall report all tangible personal property on one return.

704.3 Any nonprofit organization which does not have a personal property tax exemption shall report for assessment and taxation on the return any tangible personal property which is located or has taxable situs in the District of Columbia on the assessment date.

704.4 The fiduciary shall report on the return any tangible personal property held in trust which is located or has a taxable situs in the District of Columbia on the assessment date and is used or available for use in a trade or business.

704.5 The owner of any tangible personal property is generally the holder of legal title except in either of the following circumstances:

(a) When title passes on July 1st, only the person last obtaining title on the date shall be deemed to have title on July 1st; or

(b) When tangible personal property is used as security for a debt and the debtor is in possession of the property, the debtor shall be deemed to be the owner.

704.6 Any tangible personal property idle or not placed in service and located or having a taxable situs in the District of Columbia on the assessment date shall be reported for assessment and taxation on the return by the owner.

704.7 Any tangible personal property available for use or being used for emergency or back-up purposes and located or having a taxable situs in the District of Columbia shall be reported for assessment and taxation on the return by the owner.

704.8 Any tangible personal property that is part of construction in progress performed by the owner for eventual use in the owner's business shall be reported for assessment and taxation on the return if the tangible personal property is located or has a taxable situs in the District of Columbia on the assessment date.

704.9 Any tangible personal property which is moving through the District of Columbia or which is consigned to a warehouse in the District of Columbia for storage or assembly and which is in transit to a final destination outside the District of Columbia acquires no taxable situs in the District of Columbia and shall be exempt from taxation.

704.10 Any tangible personal property claimed to have no situs in the District of Columbia shall be entered in the records of the warehouse in which it is located as property in transit.

704.11 The records required under § 704.10 shall include the following:

(a) The date of receipt;

(b) The date of withdrawal;

(c) The point of origin; and

(d) If known, the point of ultimate destination of the property.

704.12 Any tangible personal property that is no longer in import transit and that comes to rest in the District of Columbia on the assessment date shall be reported on the return for assessment and taxation by the owner.

History

• SOURCE: Final Rulemaking published at 35 DCR 6014, 6018 (August 5, 1988).

9 DCMR § 705 DEPRECIATION

705.1 Depreciation rates, in general, shall be published in the instructions for filing a personal property tax return.

705.2 The depreciation rate on a specific type of tangible personal property that is not shown in the instructions for filing a personal property tax return may be obtained from the Office.

705.3 Accelerated depreciation methods shall not be used to compute the current value of the tangible personal property on the return.

History

• SOURCE: Final Rulemaking published at 35 DCR 6014, 6020 (August 5, 1988).
• EDITOR'S NOTE: Prior to August 5, 1988, the Department of Finance and Revenue published Final Rulemaking notice at 28 DCR 5393 (December 18, 1981), incorporating text of Proposed Rulemaking published at 28 DCR 4112, 4116 (September 18, 1981).

9 DCMR § 706 VALUATION

706.1 In the case of a change in the taxpayer's organizational structure, any substituted basis of value other than the original cost shall not be used if the taxpayer's organizational structure or entity change embraces the same depreciable tangible personal property.

706.2 Any tangible personal property that has been appraised by the Office shall be reported on the return at that appraised value for the tax year being appraised.

706.3 Regarding the allowance for depreciation for subsequent years, the Office shall advise the taxpayer whether the depreciation shall be allowed on appraised tangible personal property depending on the circumstances surrounding the appraisal made.

History

• SOURCE: Final Rulemaking published at 35 DCR 6014, 6020 (August 5, 1988).

9 DCMR § 707 EXEMPT ORGANIZATIONS

707.1 The responsibility for establishing the right to exemption from the personal property tax shall rest upon the organization claiming the exemption.

707.2 An organization shall not be exempt merely because it is not organized and operated for profit.

707.3 Personal property tax exemptions shall only be valid for the period stated on the personal property tax exemption certificate.

707.4 The effective date for a personal property tax exemption granted shall be the July 1st following the date of the initial application request.

707.5 Exemption Applications for Exempt Organizations

In order to establish a personal property tax exemption, the organization shall obtain from the Deputy Chief Financial Officer a certificate of exemption stating that the institution is entitled to the exemption. No exemption shall be allowed without a valid exemption certificate.

Beginning with exemption certificates issued on or after November 1, 2018, exemption certificates issued to exempt organizations, except as provided in Subsection 707.5(c), shall be valid only for a period of up to five (5) years from the date issued.

Beginning with exemption certificates issued on or after November 1, 2018, exemption certificates issued to an exempt entity organized exclusively for religious purposes shall be valid only for a period of up to ten (10) years from the date issued.

Exemption certificates issued to exempt organizations prior to November 1, 2018, shall expire upon notice by the Office of Tax and Revenue.

In order to receive an exemption certificate, an exempt organization shall follow the Office of Tax and Revenue’s electronic application process.

All exemption applications filed by exempt organizations shall include, but are not limited to, the following information:

Taxpayer ID Number;

Name;

Address;

Sales Tax Account Number;

NAICS Code;

Federal Exemption Status;

Proof of IRS exemption (e.g., IRS Determination Letter or Application for Recognition of Exemption);

Organizational details; and

Articles of Incorporation.

History

• SOURCE: Final Rulemaking published at 35 DCR 6014, 6020 (August 5, 1988); as amended by Final Rulemaking published at 65 DCR 13770 (December 21, 2018); as amended by Final Rulemaking published at 66 DCR 5405 (April 26, 2019). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 707

9 DCMR § 708 DEPRECIATION GUIDELINES

708.1 For the personal property tax year beginning July 1, 1989 and ending June 30, 1990 (Tax Year 1990) and thereafter, the depreciation guide set forth in §§ 708.2 through 708.9 shall be used for the tangible personal property acquired on or after July 2, 1988.

708.2 Assets shall not be depreciated in excess of seventy-five percent (75%) of original cost.

708.3 Each category of tangible personal property defined in §§ 708.4 through 708.9 shall include, but not limited to, the items listed.

708.4 The following items shall be included in Category A and shall be depreciated at the rate of ten percent (10%) per annum:

(a) Air conditioning equipment (compressors, ducts, package units, and window units);

(b) Asphalt, cement, and slurry plants and equipment;

(c) Automobile repair shop and gasoline service station equipment;

(d) Automobile sales agency furniture, fixtures, and equipment;

(e) Bakery equipment;

(f) Banking furniture, fixtures and equipment (automatic teller machines);

(g) Barber shop, beauty salon and cosmetic salon furniture, fixtures and equipment;

(h) Bottling equipment;

(i) Bowling alley equipment;

(j) Burglar alarm, security alarm, and monitoring system;

(k) Catering equipment;

(l) Clay products manufacturing equipment;

(m) Cold storage, ice making, and refrigeration equipment;

(n) Conveyors;

(o) Dentist's and physician's offices - furniture and equipment;

(p) Department store furniture, fixtures, and equipment;

(q) Drug store furniture, fixtures, and equipment;

(r) Emergency power generators;

(s) Fire extinguishing systems;

(t) Garbage disposals, trash compactors, and trash containers;

(u) Hotel and motel furniture, fixtures and equipment (restaurant, bar, meeting rooms, office, rooms, lobby, and other public rooms);

(v) Intercom system;

(w) Kitchen equipment;

(x) Laundries and dry cleaning equipment;

(y) Libraries;

(z) Mail chutes and mail boxes;

(aa) Musical instruments (portable);

(bb) Office furniture, fixtures, and equipment (any kind whether modular or system furniture, desks, chairs, cabinets, shelving, awnings, typewriters, calculators, adding machines, files, partitions, carrels, cash registers, paper cutters);

(cc) Paper products industry machinery and equipment;

(dd) Printing industry machinery and equipment;

(ee) Pulp industry machinery and equipment;

(ff) Restaurant, carry-out, supermarket and delicatessen furniture, fixtures and equipment;

(gg) Shoe repairing furniture, fixtures and equipment;

(hh) Signs (neon and others);

(ii) Special tools (dies, jigs, gauges, molds);

(jj) Surveying and drafting equipment;

(kk) Theater furniture and equipment;

(ll) X-ray and diagnostic equipment; and

(mm) Wax museum (wax figures, displays, sets, barriers, rails).

708.5 The following items shall be included in Category B and shall be depreciated at the rate of six and sixty-seven hundredth of a percent (6.67%) per annum:

(a) Antennas, transmitting towers, fiber optic cables, shelters, satellite dies and repeaters;

(b) Cement, gravel and sand bins;

(c) Pianos and organs;

(d) Plating equipment;

(e) Safes; and

(f) Watercrafts, docks, slips, wharves, piers and floating equipment (boats, ships, barges).

708.6 The following item shall be included in Category C and shall be depreciated at the rate of twelve and five-tenths percent (12.5%) per annum:

(a) Building and lawn maintenance equipment;

(b) Car wash equipment;

(c) Construction, road paving and road maintenance equipment;

(d) Fabricated metal products machinery and equipment (machine shop);

(e) Hospital and nursing home furniture, fixtures and equipment;

(f) Junk yard machinery and equipment;

(g) Meat, fruit and vegetable packing equipment;

(h) Meters, tickometers and automatic mailer equipment (Pitney Bowes);

(i) Music boxes;

(j) Non-registered motor vehicles (forklifts and golf carts);

(k) Pipe contractor machinery and equipment;

(l) Radio, television, telecommunication, microwave and satellite transmitting systems (multiplexers, switches, transmitter, receivers, telephones, fiber optic equipment, terminal equipment);

(m) Recreation, health fitness, health club, golf course and sporting equipment;

(n) Special equipment mounted on any motor vehicle (welders, compressors);

(o) Trailers; and

(p) Vending machines (cigarette, slot, change, soft drink, food).

708.7 The following items shall be included in Category D and shall be depreciated at the rate of twenty percent (20%) per annum:

(a) Blinds, drapes and shades (used as secondary window covering);

(b) Brain scanners, CAT scanners, MRI scanners and dialysis equipment;

(c) Canvas;

(d) Carpets over finished floor, loose carpets and rugs;

(e) Coffee maker and soda fountain equipment;

(f) Computers and peripheral equipment;

(g) Duplicating machines, photocopiers and photographic equipment;

(h) Hot air balloon;

(i) Outdoor Christmas decorations;

(j) Portable toilets;

(k) Self-service laundries (washer, dryer);

(l) Swimming pool furniture, fixtures and equipment;

(m) Telephone answering equipment (beepers);

(n) Television, stereo, radio and recorder equipment;

(o) Test equipment and electronic manufacturing equipment; and

(p) Wood pallet (used in the warehouse).

708.8 The following items shall be included in Category E and shall be depreciated at the rate of fifty percent (50%) per annum:

(a) Amusement arcade machines, pinball machines and video games;

(b) Cable T.V. decoders;

(c) China, glassware, pots, pans, serving dishes, utensils and silverware (in service);

(d) Linens (in service);

(e) Microfilms, movie films and video movie tapes;

(f) Small hand tools; and

(g) Tuxedos and uniforms (in service).

708.9 The following items shall be included in Category F and shall be reported at one hundred percent (100%) of cost and shall not be depreciated:

(a) Antiques, tapestries and oriental rugs (items appreciation in value);

(b) Chemicals;

(c) Cleaning, office and other supplies;

(d) China, glassware, pots, pans, serving dishes, utensils and silverware (new in reserve);

(e) Linens (new in reserve);

(f) Oil paintings and sculptures (items appreciation in value);

(g) Paper products; and

(h) Tuxedos and uniforms (new in reserve).

History

• SOURCE: Final Rulemaking published at 35 DCR 6014, 6021 (August 5, 1988).

9 DCMR § 709 PERSONAL PROPERTY TAX EXEMPTION CREDIT FOR TELECOMMUNICATION COMPANIES

709.1 Subject to the provisions of §§ 710.2 and 710.3 for the personal property tax year beginning July 1, 1988 and ending June 30, 1989 (tax year 1989), and for each succeeding year, each telecommunication company shall be allowed a credit against personal property tax imposed for the least of one of the following:

(a) The amount of property tax due;

(b) The amount of gross receipts taxes paid for the twelve (12) months immediately preceding the personal property tax year; or

(c) The amount of personal property tax reported for the tax year, multiplied by the following fraction:

Step One

Column (1)

Column (2)

Column (3)

Column (4)

Current personal property tax due before Column (4) credit

X

Receipts on which District gross receipts tax is paid for twelve preceding months

X

Value of personal property everywhere July 1 of Column (1) tax

tax year

=

Credit against Column (1) tax not to exceed limits of this section

Cross receipts everywhere for twelve months preceding Column (1) tax year

Value of property subject to District personal property tax on July 1 of Column (1) tax year

The following are examples of the application of § 709.1:

(1) The taxpayer has property valued at one hundred thousand dollars ($ 100,000) subject to District personal property tax, and personal property everywhere of one million dollars ($ 1,000,000) on July 1, 1988. The amount of personal property tax due is three thousand one hundred dollars ($ 3,100). The corporation's total gross receipts everywhere for the twelve (12) month period which ended June 30, 1988, are twelve million dollars ($ 12,000,000), and receipts on which District gross receipts taxes were paid are one million dollars ($ 1,000,000) for this tax year. District gross receipts taxes paid are sixty-seven thousand dollars ($ 67,000). In this instance, the amount of the credit allowed on the tax year 1989 property tax return is two thousand five hundred eighty-three dollars ($ 2,583), the least of one the following:

(a) The Column (1) tax of three thousand one hundred dollars ($ 3,100);

(b) The District gross receipts tax paid of sixty-seven thousand dollars ($ 67,000); or

(c) The results of the following computation, which is two thousand five hundred and eighty-three dollars ($ 2,583):

(1)

(2)

(3)

(4)

$ 3,100

X

$ 1,000,000

X

$ 1,000,000

=

$ 2,583 exemption

$ 12,000,000

$ 100,000

(2) Same facts as example (1) except that receipts subject to District gross receipts tax were one million four hundred thousand dollars ($ 1,400,000). In this instance, the allowable credit is three thousand one hundred dollars ($ 3,100), the amount of personal property tax payable to the District.

(1)

(2)

(3)

(4)

$ 3,100

X

$ 1,400,000

X

$ 1,000,000

=

$ 3,617 exemption

$ 12,000,000

$ 100,000

709.2 If the allocation provisions of this section do not fairly represent the extent of the personal property tax exemption, the taxpayer may petition for, or the Mayor may require, the employment of any other method to effectuate an equitable allocation of the taxpayer's personal property tax exemption.

709.3 As used in § 709.1, the term "value of personal property" shall mean, for both the numerator and denominator of the fraction, that amount carried on the taxpayer's balance sheet at original cost for the personal property shown in the fraction.

709.4 The numerator and denominator of Column (3) property values shall include property subject to the personal property tax under the provisions of the Personal Property Tax Amendment Act of 1986, effective February 28, 1987 (D.C. Law 6-212; D.C. Code § 47-1521 et seq.) without regard for any exemption from the tax.

History

• SOURCE: Final Rulemaking published at 34 DCR 6143, 6147 (September 25, 1987); and by Final Rulemaking published at 35 DCR 6014 (August 5, 1988), redesignating the old § 701 as § 709.
• EDITOR'S NOTE: Prior to September 25, 1987, the Department of Finance and Revenue published Final Rulemaking notice at 22 DCR 4446 (February 17, 1976).

9 DCMR § 710 PERSONAL PROPERTY TAX EXEMPTION FOR TELECOMMUNICATIONS COMPANIES SUBJECT TO THE TELECOMMUNICATION SERVICE TAX

710.1 For the personal property tax year beginning July 1, 1990, and ending June 30, 1991 (tax year 1991), and for each succeeding year, each telecommunication company shall be allowed a credit against personal property tax for the least of the following:

(a) The amount of personal property tax due on equipment defined in § 710.7;

(b) The amount of toll telecommunication service tax paid for the twelve (12) months immediately preceding the personal property tax year; or

(c) The amount of personal property tax reported on equipment defined in § 710.7 multiplied by the following fraction:

Step One

Column (1)

Column (2)

Column (3)

Column (4)

Current personal property tax due on property defined in § 710.7 before any Column (4) credit

X

Gross charges on toll telecommunication service tax is paid for twelve preceding months

X

Value of personal property everywhere as defined in § 710.7 on July 1st of Column (1) tax year

X

Credit against Column (1) tax not to exceed the limits of this section

Gross charges and/or gross receipts everywhere from property defined in § 710.7 for twelve months preceding Column (1) tax year: Less resales defined in § 710.9

Value of personal property on which Column (1) tax due is computed

The following are examples of the application of § 710.1 during the 1991 personal property tax year ending June 30, 1991:

(1) The taxpayer has § 710.7 property in the District valued at one hundred thousand dollars ($ 100,000), property everywhere valued at one million dollars ($ 1,000,000) on July 1, 1990. The amount of Column (1) tax due is three thousand one hundred dollars ($ 3,100). No § 4101.1 credit for tax paid to another jurisdiction is involved. The taxpayer's gross receipts everywhere from § 710.6 property for the twelve (12) month period which ended June 30, 1990, are twelve million dollars ($ 12,000,000). The gross charges on which toll telecommunication service tax was paid for this same period are one million dollars ($ 1,000,000), and the toll telecommunication service tax paid for this same period was sixty-seven thousand dollars ($ 67,000). In this instance, the amount of the credit allowed on the 1991 personal property tax return is two thousand five hundred eight-three dollars ($ 2,583), the least of the following:

(a) The Column (1) tax of three thousand one hundred dollars ($ 3,100);

(b) The toll telecommunication service tax paid; or

(c) The result of the following computation, which is two thousand five hundred eighty-three dollars ($ 2,583):

(1)

(2)

(3)

(4)

$ 3,100

X

$ 1,000,000

X

$ 1,000,000

=

$ 2,583 exemption

$ 12,000,000

$ 100,000

(2) Same facts as example (1) except that gross charges subject to the toll telecommunication service tax were one million four hundred thousand dollars ($ 1,400,000). In this instance, the allowable credit is three thousand one hundred dollars ($ 3,100), the amount of personal property tax reported in Column (1).

(1)

(2)

(3)

(4)

$ 3,100

X

$ 1,400,000

X

$ 1,000,000

=

$ 3,617 exemption

$ 12,000,000

$ 100,000

710.2 For the personal property tax year beginning July 1, 1989, and ending June 30, 1990 (tax year 1990), the provisions of § 710.1 shall apply except that the Column (2) numerator shall be gross receipts on which the gross receipts tax was paid under the Gross Receipts Tax Amendment Act of 1987 for the period beginning July 1, 1988, and ending February 28, 1989, added to gross charges for the period beginning March 1, 1989, and ending June 30, 1989.

710.3 For the personal property tax year beginning July 1, 1988, and ending June 30, 1989 (tax year 1989), the following procedure shall be applied, in some instances retroactively:

(a) Step One:

Section 710.1 provisions are applied except that the Column (2) numerator shall be gross receipts on which the gross receipts tax paid was under the Gross Receipts Tax Amendment Act of 1987, for the period beginning July 1, 1987, and ending February 28, 1988, added to gross charges for the period beginning March 1, 1988, and ending June 30, 1988. Any resulting credit is multiplied by one-third (1/3);

(b) Step Two:

Section 709.1 credit provisions shall be applied to the period beginning July 1, 1987, and ending June 30, 1988. Any resulting credit is multiplied by two-third (2/3); and

(c) Step Three:

The final result in Step One is added to the final result of Step Two to determine the total credit allowed against personal property tax reported on the taxpayer's 1989 return.

710.4 An amended 1989 personal property tax return shall be filed if the application of this section results in additional tax due thereon.

710.5 If the allocation provisions of this section do not fairly represent the extent of the personal property tax exemption, the taxpayer may petition for, or the Mayor may require, the employment of any other method to effectuate an equitable allocation of the taxpayer's personal property tax exemption.

The following is an example of the application of § 710.5:

Before March 1, 1989, a taxpayer may have paid the District gross receipts tax on none or on only some of its gross receipts; had no gross receipts; or, had gross receipts for only some of the twelve (12) months preceding the personal property tax year at issue. In such an instance, the taxpayer may petition the Mayor to modify § 710.1, 710.2 or 710.3 credit provisions, for example, by employing in the Column (2) numerator and denominator gross receipts or gross charges from the twelve (12) months concurrent with the personal property tax year rather than the preceding twelve (12) months. In this example, the taxpayer may file an amended personal property tax return after that tax year has ended to claim refund of any credit determined by operation of the modified formula described in the previous sentence.

710.6 As used in § 710, the term "value of personal property" shall mean, for both the numerator and denominator of the fraction, that amount carried on the taxpayer's balance sheet at original cost for the personal property shown in the fraction.

710.7 For purposes of this section, "toll telecommunication service property" shall be limited to equipment, used wholly or in part in the transmission or reception of any sound, vision, or speech communication subject to the tax imposed by the "Toll Telecommunication Service Tax Emergency Act of 1989," and shall include, but not be limited to, the following equipment used in transmissions or receptions:

(a) Switches;

(b) Transmitters;

(c) Receivers;

(d) Telephones; and

(e) Fiber optics cable and equipment.

710.8 Section 710.1 gross charges as defined in the Act shown in the Column (2) numerator shall not include amounts on which a multistate tax credit is allowed.

710.9 Section 710.1 gross charges as defined in the Act shown in the Column (2) denominator may be reduced by gross charges from the sale of toll telecommunication service for resale to any other telecommunication company subject to the tax under the Act.

History

• SOURCE: Final Rulemaking published at 36 DCR 2478, 2485 (April 7, 1989).

9-8 MOTOR VEHICLE FUEL TAX

9 DCMR § 800 GENERAL PROVISIONS

800.1 The provisions of this chapter are adopted by the Council of the District of Columbia under authority of § 18 of the Act of April 23, 1924, 43 Stat. 110, ch. 131, as amended (also referred to in this chapter as the "Act"), D.C. Code § 47-2315.

800.2 The words, terms, and phrases defined in the Act shall have the same meanings when used in this chapter, unless otherwise required by the context of this chapter.

800.3 When used in this chapter, the term "Deputy Chief Financial Officer" shall mean the Deputy Chief Financial Officer of the Office of Tax and Revenue ("Office"), or his or her lawfully appointed agent, representative, or designee.

800.4 Any importer, distributor, retail dealer, individual, partnership, firm, corporation, or association violating any of the provisions of this chapter shall, upon conviction, be punished by a fine of not more than three hundred dollars ($ 300).

800.5 Sales of motor fuel to any state, territory, or possession of the United States (including any political subdivision of any state, territory, or possession) are subject to the tax.

History

• AUTHORITY: Unless otherwise noted, the authority for this chapter is § 18 of the Act, effective April 23, 1924, 43 Stat. 110, ch. 131, as amended, D.C. Code § 47-2315 (1981 Ed.).
• SOURCE: Commissioners' Order 298,426/58 effective December 2, 1942, published in the Evening Star on November 2, 1942, Article 26 of the Police Regulations, 16 DCRR § 50.8.
• EDITOR'S NOTE: The Office of the Chief Financial Officer of the District of Columbia published a Notice of Public Interest at 44 DCR 2345 (April 18, 1997) changing the name of the "Department of Finance and Revenue" to the "Office of Tax and Revenue."

9 DCMR § 801 BOOKS AND RECORDS OF LICENSED FUEL IMPORTERS

801.1 Each licensed importer of motor vehicle fuel into the District of Columbia shall keep permanent books showing purchases, transfers, sales, or other dispositions and uses of motor vehicle fuel.

801.2 The records required under § 801.1 shall include bookkeeping records of daily opening and closing inventories of motor vehicle fuel subject to the provisions of the Act.

801.3 All bookkeeping records of purchases shall be supported by invoices or other shipping data, and all sales, transfers, or other dispositions, shall be supported by delivery tickets and a monthly record by customers, except in cases of retail sales.

801.4 All accounting records shall be maintained so that they can be readily reconciled with the monthly return filed with the Deputy Chief Financial Officer.

History

• SOURCE: § 1 of Commissioners' Order 298,426/58 effective December 2, 1942, published in the Evening Star on November 2, 1942, Article 26 of the Police Regulations, 16 DCRR § 50.1.

9 DCMR § 802 RECORDS OF MOTOR FUEL RETAILERS

802.1 A permanent record shall be maintained for one (1) year by the retailer of daily gross purchases, gross sales, and bookkeeping inventory.

802.2 All records of the retailers shall be subject to inspection during usual business hours by the Deputy Chief Financial Officer or his or her representatives.

History

• SOURCE: § 1 of Commissioners' Order 298,426/58 effective December 2, 1942, published in the Evening Star on November 2, 1942, Article 26 of the Police Regulations, 16 DCRR § 50.4.

9 DCMR § 803 LOCAL REPRESENTATIVES OF FUEL IMPORTERS

803.1 Each licensed importer shall designate a local representative and maintain a local office or place of business within the District of Columbia.

803.2 Each change of address of the local office shall be reported in writing within ten (10) days of the change to the Deputy Chief Financial Officer.

History

• SOURCE: § 2 of Commissioners' Order 298,426/58 effective December 2, 1942, published in the Evening Star on November 2, 1942, Article 26 of the Police Regulations, 16 DCRR § 50.2.

9 DCMR § 804 RESALES AND TRANSFERS

804.1 If motor vehicle fuel is resold or transferred by the licensed importer into other jurisdictions, official copies of delivery tickets or sales invoices shall be kept in the local office.

804.2 Records of sales directly to an agency of the U.S. government or District government shall be maintained by the local office.

804.3 Exemption certificates furnished by a retailer at the time of sale, when properly executed, shall be accepted by the importer and be attached to its monthly returns to the Deputy Chief Financial Officer.

History

• SOURCE: § 3 of Commissioners' Order 298,426/58 effective December 2, 1942, published in the Evening Star on November 2, 1942, Article 26 of the Police Regulations, 16 DCRR § 50.3.

9 DCMR § 805 IDENTIFICATION REQUIRED ON DELIVERY VEHICLES

805.1 Each tank wagon, truck trailer, or motor vehicle which bears or contains motor vehicle fuel, kerosene, motor oil, or other petroleum product(s) for delivery in or transport through the District, shall have printed or painted on the vehicle the name and address of the owner or owners of the vehicle.

805.2 The name and address on each vehicle shall be in letters not less than four inches (4 in.) high, and shall be placed in a conspicuous position the sides of each tank wagon, truck, trailer, or vehicle.

History

• SOURCE: § 5 of Commissioners' Order 298,426/58 effective December 2, 1942, published in the Evening Star on November 2, 1942, Article 26 of the Police Regulations, 16 DCRR § 50.5.

9 DCMR § 806 DELIVERY INVOICES

806.1 Each operator or other person in charge of each tank wagon, truck, trailer, or vehicle described in § 805.1 shall have in his or her possession at the time of delivery or deliveries a true legible invoice or ticket showing in liquid measure the gallonage of each type of motor fuel, kerosene, motor oil, or other petroleum product, together with the name and address of the owner of that motor fuel, kerosene, motor oil, or other petroleum product.

806.2 Upon demand of any member of the Metropolitan Police Force or the Deputy Chief Financial Officer, the person in charge (or the operator or driver) of a tank wagon, trailer, truck or other vehicle, shall exhibit the invoice or ticket for inspection.

History

• SOURCE: § 6 of Commissioners' Order 298,426/58 effective September 26, 1942, Article 26 of the Police Regulations, 16 DCRR §§ 50.6, 50.7.

9 DCMR § 807 SALES OF MOTOR FUEL TO THE UNITED STATES GOVERNMENT

807.1 Sales of motor fuel to the United States government and its agencies shall not be subject to the tax. The provisions of this section shall govern the procedures for making and reporting such sales.

807.2 If sales are made by credit card, copies of monthly invoices which furnish the following information shall be submitted to the Department with motor fuel tax returns:

(a) The number of gallons purchased by the agency;

(b) The number of gallons purchased by the agency in the District; and

(c) The total amount of District tax claimed to be exempt on the invoice.

807.3 Copies of sales tickets from which invoices are prepared shall be retained and must bear the name and address of the dealer service station and the name and address of the purchaser.

807.4 Microfilm or other facsimile sales ticket records shall be acceptable.

807.5 Invoices that do not contain the required information will not be accepted as evidence of exemption. If proper invoices are not available, the transaction will be treated as a cash transaction requiring the submission of Form 1094.

807.6 If sales are made on a cash basis (or if proper invoice information is not available, as set forth in § 607.5), Form 1094 shall be completed and submitted with the original cash receipt or invoice.

807.7 Failure to submit the cash receipt or a reproduction of the receipt with the Form 1094 will result in a disallowance of the exemption.

807.8 Each cash receipt shall bear the name and address of the dealer service station and the name and address of the purchaser.

History

• SOURCE: Administrative Ruling No. 1, 16 DCRR.

9 DCMR § 808 SALES OF MOTOR FUEL TO FOREIGN GOVERNMENTS AND AGENCIES

808.1 Motor fuel sold to a foreign government shall be sold to an individual designated as the representative of that government.

808.2 Diplomats, employees of foreign governments and agencies, and certain members of their families who are exempt from payment of motor fuel taxes shall be determined by the U.S. Department of State, with the approval of the Department.

808.3 Persons who are exempt under this section shall be issued Form DS-719, a green identification card called a "Gasoline Tax Exemption Card," and a book of exemption certificates (Form DS 717) for use when making tax-exempt purchases.

808.4 The identification card shall bear the name of the individual entitled to purchase motor fuel without payment of the tax, an identification card number, and the card holder's photograph and signature.

808.5 In order to make a tax-exempt purchase, the purchaser shall show the Form DS-719 identification card to the dealer and give a certificate from the book (Form DS-717) to the dealer.

808.6 The dealer shall submit the certificate(s) to the importer for use in establishing the amount of motor fuel exempt from the tax.

808.7 Vendors shall exercise care to determine that the person making a tax-exempt purchase is the same person shown on the identification card by comparing the person and his or her signature to the photograph and signature on the card.

808.8 No sales shall be made without payment of the tax to any person who does not exhibit an identification card and present a completed exemption certificate.

808.9 If the Department of State severs diplomatic relations with any country, the agencies, diplomats, employees, and others from that country will no longer be allowed to make tax-exempt purchases. Vendors will be notified periodically of any revocations made on this basis.

808.10 No other identification cards except Form DS-719 shall be valid for the motor fuel tax exemption. The pink identification cards issued for the purpose of indicating exemption from Federal gasoline tax shall not be valid for establishing exemption to D.C. motor fuel tax.

History

• SOURCE: Administrative Ruling No. 1, 16 DCRR.

9-9 TAXATION OF MOTOR FUEL CONSUMED BY INTERSTATE BUSES

9 DCMR § 900 GENERAL PROVISIONS

900.1 The provisions of this chapter are adopted under authority of title 1, § 103 of Public Law 89-11, approved April 14, 1965, the "Compact on Taxation of Motor Fuels Consumed by Interstate Buses" (also referred to in this chapter as the "Act"), D.C. Code § 47-2301 footnote.

900.2 Each carrier shall pay to the District motor fuel taxes equivalent to the tax per gallon multiplied by the number of gallons used by the carrier in its operations in the District, as provided by the Act.

900.3 When used in this chapter, the term "Deputy Chief Financial Officer" shall mean the Deputy Chief Financial Officer of the Office of Tax and Revenue ("Office"), or his or her lawfully appointed agent, representative, or designee.

900.4 The words, terms, and phrases defined in the Act, and the definition of "motor vehicle fuels" in D.C. Code § 47-2302(2), shall have the same meanings when used in this chapter, unless otherwise required by the context of this chapter.

900.5 For the purposes of this chapter, the following definitions are also applicable:

(a) The term "carrier" means a bus owner or operator subject to the payment of motor fuel taxes to the District of Columbia under the Act and chapter 8 of this title;

(b) The term "operations" means the movement of any bus whether the bus is loaded or empty, whether it is moved for compensation or not for compensation, and whether the bus is owned by or leased to the person who operates it or causes it to be operated; and

(c) The term "tax per gallon" means a tax at the rate imposed under the District of Columbia Motor Fuel Tax Act (See chapter 8).

History

• AUTHORITY: Unless otherwise noted, the authority for this chapter is title 1, § 103 of Public Law 89-11, approved April 14, 1965, the "Compact on Taxation of Motor Fuels Consumed by Interstate Buses," D.C. Code § 47-2301 (1981 Ed.).
• SOURCE: Commissioners' Order 66-1004 effective July 14, 1966, 13 DCR 27 (August 1, 1966), 16 DCRR §§ 100.1, 100.2. EDITOR’S NOTE: The Office of the Chief Financial Officer of the District of Columbia published a Notice of Public Interest at 44 DCR 2345 (April 18, 1997) changing the name of the “Department of Finance and Revenuer” to the “Office of Tax and Revenue.”

9 DCMR § 901 MAINTENANCE OF RECORDS BY CARRIERS

901.1 Each carrier shall keep those records which are required to be kept by the Deputy Chief Financial Officer, and shall preserve all records required under this section for a period of three (3) years.

901.2 The Deputy Chief Financial Officer may consent to the destruction of records before the expiration of the three (3) year period under § 901.1. Application for early destruction of records shall be in writing to the Deputy Chief Financial Officer and shall state the reasons for the request.

901.3 Records kept under this section shall be open for inspection by the Deputy Chief Financial Officer during regular business hours.

History

• SOURCE: Commissioners' Order 66-1004 effective July 14, 1966, 13 DCR 27 (August 1, 1966), 16 DCRR § 100.9.

9 DCMR § 902 REPORTS AND PAYMENT OF TAX

902.1 Each carrier shall keep accurate and complete records of the following:

(a) The number of miles traveled in all operations both within and without the District;

(b) The number of miles traveled within the District; and

(c) The amount of motor fuel used propelling the motor vehicle both within and outside the District.

902.2 On or before the last business day of each month, each carrier shall file a motor fuel report on the activities of the previous month on forms to be furnished by the Deputy Chief Financial Officer.

902.3 If the report shows an amount owed to the District after taking a credit pursuant to § 903, the carrier shall pay the amount of tax due at the time the report is filed.

902.4 If the final date falls on a Saturday, Sunday, or legal holiday in the District, the next business day shall be the final date for filing of the report and for paying any tax due.

902.5 Each report and payment of tax shall be considered filed and paid on time if mailed postage prepaid in an envelope properly addressed to the Deputy Chief Financial Officer that is postmarked by the Post Office Department before midnight of the final filing date.

902.6 The Deputy Chief Financial Officer may enter into agreements with appropriate authorities in states party to the compact for the cooperative audit of carriers' reports filed under the act.

History

• SOURCE: Commissioners' Order 66-1004 effective July 14, 1966, 13 DCR 27 (August 1, 1966), 16 DCRR § 100.3.

9 DCMR § 903 CREDIT AND REFUND

903.1 Each carrier shall be entitled to a credit equivalent to the total amount of tax per gallon on all motor fuel purchased by that carrier within the District and used in operations either within or outside the District, and upon which the motor fuel tax imposed under the District of Columbia Motor Fuel Tax Act has been paid.

903.2 In support of the credit claimed, the carrier shall provide evidence of the payment of the tax paid on motor fuel purchased in the District consisting of invoices of the vendor satisfactory to the Deputy Chief Financial Officer.

903.3 The original invoice shall be required; Provided, that a copy of an invoice may be used in case of credit card purchases.

903.4 In order to further substantiate the credit claim, the Deputy Chief Financial Officer is authorized to require a sworn affidavit from the vendor stating that the vendor has sold the specified number of gallons of motor fuel to the carrier and that the motor fuel tax on the fuel has been paid.

903.5 If the amount of the credit to which any carrier is entitled for any month exceeds the amount of the motor fuel tax for which that carrier is liable for the same month, the Deputy Chief Financial Officer shall refund the excess.

History

• SOURCE: Commissioners' Order 66-1004 effective July 14, 1966, 13 DCR 27 (August 1, 1966), 16 DCRR § 100.4.

9 DCMR § 904 BOND FOR PAYMENT OF TAX

904.1 The Deputy Chief Financial Officer may in his discretion require a carrier to file a bond in the form to be prescribed by the Deputy Chief Financial Officer, in a sum approximating twelve (12) times the average monthly motor fuel tax paid by the carrier on purchases of motor fuel from suppliers of motor fuel in the District during the preceding twelve (12) months.

904.2 The bond shall be payable to the District of Columbia, and executed by a surety company licensed to do business in the District.

904.3 The condition of each bond shall be that the carrier will pay all taxes due and to become due, including all penalties, under the Act and this chapter from the date of the bond to thirty (30) days after either the carrier or the surety notifies the Deputy Chief Financial Officer that the bond has been canceled; Provided, that in no case shall the bond be less than one thousand dollars ($ 1,000) or more than seventy-five thousand dollars ($ 75,000).

History

• SOURCE: Commissioners' Order 66-1004 effective July 14, 1966, 13 DCR 27 (August 1, 1966), 16 DCRR § 100.5.

9 DCMR § 905 DETERMINATION OF TAX

905.1 In the absence of records showing the number of miles actually operated per gallon of motor fuel, it shall be conclusively presumed that the average mileage so operated by the bus in all operations, within or without the District, during the tax period, was four (4) miles per gallon.

905.2 If a report required to be filed under the Act is not filed, or if a report when filed is incorrect or insufficient, the amount of tax due shall be determined by the Deputy Chief Financial Officer from such information as may be obtainable. Written notice of the determination shall be mailed to the taxpayer by registered mail or by certified mail.

905.3 A determination under § 905.2 shall finally and irrevocably fix the tax unless the person against whom it is assessed applies in writing to the Deputy Chief Financial Officer for a hearing within thirty (30) days after the mailing date of the notice of the determination; or unless the Deputy Chief Financial Officer, on his or her own motion, redetermines the amount.

905.4 After a hearing or redetermination, the Deputy Chief Financial Officer shall give notice of the final determination to the person against whom the tax is assessed.

History

• SOURCE: Commissioners' Order 66-1004 effective July 14, 1966, 13 DCR 27 (August 1, 1966), 16 DCRR §§ 100.6, 100.7.

9 DCMR § 906 ENFORCEMENT AND PENALTIES

906.1 Any person violating any provision of this chapter shall, upon conviction, be punished by a fine of not more than three hundred dollars ($ 300), or imprisonment for not more than ten (10) days, or both.

906.2 Any person who, for the purpose of obtaining or attempting to obtain or to assist any other person to obtain or attempt to obtain a credit or refund or reduction of liability for taxes under the Act or this chapter, wilfully and knowingly makes a false statement orally or in writing or in the form of a receipt for the sale of motor fuel, shall be guilty of a misdemeanor and, upon conviction, shall be punished by a fine of not more than three hundred dollars ($ 300) or by imprisonment for not more than ten (10) days, or both.

906.3 If any persons fails, refuses, or neglects to file a monthly report as required in this chapter or to pay the tax within the time required by this chapter, there shall be added to the tax an amount equal to the sum of twenty percent (20%) of the amount of the tax.

History

• SOURCE: Commissioners' Order 66-1004 effective July 14, 1966, 13 DCR 27 (August 1, 1966), 16 DCRR § 100.8.

9 DCMR § 907 MOTOR FUEL SOLD TO THE UNITED STATES GOVERNMENT OR GOVERNMENTS AND AGENCIES OF FOREIGN COUNTRIES

907.1 The provisions of § 807 of Chapter 8 of this title shall apply to sales of motor fuel under this chapter.

907.2 The provisions of § 808 of Chapter 8 of this title shall apply to sales of motor fuel under this chapter.

History

• SOURCE: Administrative Ruling No. 1 - Motor Fuel Tax (October 21, 1969).

9-10 CIGARETTE TAXES

9 DCMR § 1000 GENERAL PROVISIONS

1000.1 The provisions of this chapter are adopted under authority of § 2 of D.C. Law 4-71, the "Cigarette Tax Amendment Act of 1981," effective March 10, 1982, D.C. Code §§47-2401 et seq. (1981 Ed.) (also referred to in this chapter as the "Act"); and Mayor's Order No. 82-58 (April 2, 1982).

1000.2 In addition to the definitions set forth in §602 of the Act, the term "licensee," as used in this chapter, means a person to whom a license has been issued under the Act to sell cigarettes in the District.

1000.3 In accordance with Mayor's Order No. 82-58, and except as otherwise provided in this section, the Office of Tax and Revenue (the "Office") is designated as the District agency to perform the general functions and duties required under the Act.

1000.4 When used in this chapter, the term "Deputy Chief Financial Officer" shall mean the Deputy Chief Financial Officer of the Office of Tax and Revenue or his or her designee, representative, or agent.

1000.5 In accordance with Mayor's Order No. 82-58, the D.C. Department of Consumer and Regulatory Affairs (DCRA) is designated as the District agency to perform the following:

(a) The functions and duties required under the Act with respect to issuance and denial of licenses;

(b) The keeping of full and complete records of all applications for licenses; and

(c) The suspension and revocation of licenses issued under the Act.

History

• AUTHORITY: Unless otherwise noted, the authority for this chapter is § 2 of the Cigarette Tax Amendment Act of 1981, effective March 10, 1982, the Cigarette Tax Amendment Act of 1981, D.C. Law 4-71, D.C. Code §§ 47-2401 et seq. (1981 Ed.), Mayor's Order No. 82-58.
• SOURCE: Final Rulemaking published at 29 DCR 2804 (July 2, 1982).
• EDITOR'S NOTE: The Office of the Chief Financial Officer of the District of Columbia published a Notice of Public Interest at 44 DCR 2345 (April 18, 1997) changing the name of the "Department of Finance and Revenue" to the "Office of Tax and Revenue."

9 DCMR § 1001 PURCHASE OF TAX STAMPS

1001.1 Stamps to evidence payment of tax may be purchased from the Deputy Chief Financial Officer by licensed wholesalers only.

1001.2 A wholesale licensee may not purchase cigarette tax stamps from any person other than the Deputy Chief Financial Officer unless the wholesaler has obtained written permission from the Deputy Chief Financial Officer to do so.

1001.3 Machine applied fusion stamps shall be sold only in rolls of thirty thousand (30,000) stamps per roll.

1001.4 Hand applied stamps shall be sold only in sheets of one hundred (100) stamps per sheet.

1001.5 A discount of two percent (2%) shall be allowed on any single purchase of one hundred (100) or more stamps, or upon any purchase of stamp impressions for meters.

1001.6 Payment for stamps or metered impressions shall be made to the D.C. Treasurer at the time of purchase, or not later than thirty (30) days from the date of purchase if approval for the privilege of deferring payment has been granted by the Deputy Chief Financial Officer.

1001.7 The Deputy Chief Financial Officer may revoke or suspend the deferred payment privilege of any licensee who is delinquent in the timely payment of amounts due and owing the District under the Act and this section, or who violates any provision of any District tax act or this chapter.

1001.8 Remittance shall be made for all outstanding credits on or before September 30th of each year. If September 30th falls on Saturday, Sunday, or a legal holiday, remittances shall be due on the last business day in September.

History

• SOURCE: Final Rulemaking published at 29 DCR 2804, 2805 (July 2, 1982).

9 DCMR § 1002 BOND TO SECURE DEFERRED PAYMENT FOR STAMPS

1002.1 The Deputy Chief Financial Officer may require the filing of a bond to secure the payment of any amount or amounts due the District from the purchaser in the event of failure by the purchaser to pay the amounts due within the time prescribed in § 1001.

1002.2 The bond shall be in a form and with conditions satisfactory to the Deputy Chief Financial Officer, and with a surety or sureties acceptable to the Deputy Chief Financial Officer.

1002.3 The security provided in the bond shall be in an amount equal to one and one-half (11/2) times the average monthly purchases of stamps or metered impressions made by the purchaser during the year prior to the year in which the bond is obtained.

1002.4 If the purchaser has no history of prior purchases, the bond shall be in an amount not less than one thousand dollars ($1,000), to be determined in the sole discretion of the Deputy Chief Financial Officer.

1002.5 Deferred payment purchases shall not exceed the amount of the bond.

History

• SOURCE: Final Rulemaking published at 29 DCR 2804, 2805 (July 2, 1982).

9 DCMR § 1003 AFFIXING STAMPS TO CIGARETTES

1003.1 Except as provided in § 1004, tax stamps shall be physically affixed on the bottom end of original packages of cigarettes; except that when affixed to round or flat packages of fifty (50) cigarettes or more, the stamp must be so placed that it will be destroyed when the package is opened.

1003.2 A person who maintains a place of business outside the District for the manufacture or sale of cigarettes and who has a wholesale license issued under the provisions of the Act, may affix proper tax stamps to original packages of cigarettes before bringing or causing the cigarettes to be brought into the District for sale.

History

• SOURCE: Final Rulemaking published at 29 DCR 2804, 2805 (July 2, 1982).

9 DCMR § 1004 DISTRIBUTION OF FREE CIGARETTES

1004.1 A wholesale licensee, or the authorized agent of that licensee, who desires to distribute cigarettes without consideration in the District in packages containing more than five (5) cigarettes each shall not be required to affix stamps to those packages.

1004.2 A wholesale licensee intending to distribute packages of more than five (5) cigarettes each without consideration shall notify the Deputy Chief Financial Officer of its intent within five (5) days prior to the distribution or on the date of shipment, whichever occurs earlier.

1004.3 Notification of intent to distribute cigarettes under this section shall include the brand name(s), number and size of packages, and the date of distribution.

1004.4 A licensee distributing free cigarettes under this section shall file a report with the Deputy Chief Financial Officer together with payment to the D.C. Treasurer for the tax on the cigarettes distributed. The report and payment shall be due on or before the twentieth (20th) day of the month following the month during which the distribution was made.

1004.5 Packages of more than five (5) cigarettes distributed without consideration under this section shall be clearly marked with the statement "All Applicable Taxes Paid," or a similar statement.

History

• SOURCE: Final Rulemaking published at 29 DCR 2804, 2806 (July 2, 1982).

9 DCMR § 1005 METERING MACHINES

1005.1 Instead of affixing stamps to packages, the Deputy Chief Financial Officer may permit the use of metering machines for imprinting tax stamps on original packages, in accordance with the provisions of this section.

1005.2 The privilege of using metering machines shall be granted upon application in writing to the Deputy Chief Financial Officer and upon approval by the Deputy Chief Financial Officer of the type of machine to be used.

1005.3 All inks used in the printing of impression upon original packages shall be of a special type devised for use in connection with the machine approved.

1005.4 The identifying number assigned to each licensee shall be incorporated in the imprinting design, and the imprinting design used must be approved by the Deputy Chief Financial Officer.

1005.5 The imprint shall be made on the bottom end of each original package.

1005.6 All dies and other equipment shall be kept clean so that the imprint made will be legible and clear on each package.

1005.7 Personal checks and postage stamps shall not be accepted as payment for the cigarette tax as represented by any metered impressions.

1005.8 At the time a meter is set or reset, the licensee shall pay to the Deputy Chief Financial Officer the amount of tax due for the total number of imprinted stamps.

1005.9 Meters shall be set or reset at a place designated by the Deputy Chief Financial Officer.

1005.10 If a metering device becomes out-of-order or is in need of repairs, the Deputy Chief Financial Officer shall be notified prior to removal of the meter.

1005.11 No metering device, whether defective or not, may be tampered with by any person in any way without written approval of the Deputy Chief Financial Officer.

1005.12 If a meter has become unfit for use in imprinting tax stamp impressions upon original packages, and the Deputy Chief Financial Officer is satisfied that the metering device was not tampered with by (an) unauthorized person(s), the Deputy Chief Financial Officer shall allow a credit for the amount of tax represented by the number of stamps remaining unused at the time a new metering device or the repaired metering device is furnished to the Deputy Chief Financial Officer for setting or resetting.

History

• SOURCE: Final Rulemaking published at 29 DCR 2804, 2806 (July 2, 1982).

9 DCMR § 1006 CANCELLATION OF TAX STAMPS

1006.1 All stamps shall be canceled in ink, with the license number assigned to each licensee clearly indicated, before the cigarettes to which the stamps are affixed are offered for sale.

1006.2 Stamps may be canceled before or after they are affixed.

1006.3 All canceling devices shall show the license number of the licensee.

1006.4 Cancellation of stamps shall be accomplished so that the license number will be legible.

1006.5 It shall not be necessary to cancel meter imprinted stamps which carry the identifying number of the licensee.

History

• SOURCE: Final Rulemaking published at 29 DCR 2804, 2807 (July 2, 1982).

9 DCMR § 1007 TAXATION OF ODD-SIZED PACKAGES

1007.1 The tax rate imposed under §603 of the Act shall apply to all original packages, regardless of the number of cigarettes in each package. (Therefore, the entire tax rate would apply to packages of one (1) through twenty (20) cigarettes).

1007.2 The tax rate applies to each twenty (20) cigarettes or fractional part of twenty (20) cigarettes. (Therefore, the tax would be doubled for packages of twenty-one (21) through forty (40) cigarettes).

1007.3 The tax shall apply to free samples distributed under § 1004, regardless of the number of cigarettes in each original package distributed.

History

• SOURCE: Final Rulemaking published at 29 DCR 2804, 2807 (July 2, 1982).

9 DCMR § 1008 [RESERVED]

9 DCMR § 1009 [RESERVED]

9 DCMR § 1010 LICENSES TO SELL CIGARETTES

1010.1 Application for a license to sell cigarettes shall be made to the Director of the Department of Consumer and Regulatory Affairs on forms available from that office.

1010.2 Licenses shall take effect from the date of issuance.

1010.3 The license year for any licenses issued under the authority of the Act or this chapter shall be August 1st of a particular year to and including the following July 31st.

1010.4 If cigarettes are sold or offered for sale in the District by a person operating a temporary place of business or a business with no fixed location (such as a vendor selling from a cart or vehicle), that person shall be required to obtain a license.

1010.5 Annual fees for licenses and duplicate licenses shall be as follows:

(a) Retailer's license $15.00

(b) Retailer's duplicate license 3.00

(c) Each vending machine 15.00

(d) Duplicate license for each vending machine 3.00

(e) Wholesale license 50.00

(f) Duplicate wholesale license 6.00

History

• SOURCE: Final Rulemaking published at 29 DCR 2804, 2808 (July 2, 1982).

9 DCMR § 1011 RETAILERS LICENSE

1011.1 A separate license shall be required for each location where cigarettes are sold.

1011.2 If the only cigarettes sold or offered for sale in a retail establishment are from a licensed cigarette vending machine, the retail establishment is not required to have a retailer's license.

1011.3 A retailer's license shall not authorize the licensee to sell to other licensees for resale.

1011.4 The licensee shall be displayed in the retail establishment at or near the place where cigarettes are sold.

History

• SOURCE: Final Rulemaking published at 29 DCR 2804, 2808 (July 2, 1982).

9 DCMR § 1012 VENDING MACHINE OPERATOR'S LICENSE

1012.1 The Director (DCRA) is authorized to issue a blanket license to each operator of cigarette vending machines for all vending machines under the control of that operator.

1012.2 A blanket license shall be authority for the holder of the license to sell or offer to sell cigarettes from or by means of the number of vending machines for which the license is issued.

1012.3 Evidence of blanket licensing, in the form of metal tabs or other markers will be furnished by the Director (DCRA), and shall be attached to and openly displayed on each vending machine at all times.

1012.4 Prior to receiving the metal tabs or other markers, the licensee shall furnish to the Director (DCRA), in such form as the Director (DCRA) shall prescribe, a record of the location of each vending machine.

1012.5 Vending machines may not be moved from one location to another, nor may the metal tabs or other markers be removed, except upon the prior written approval of the Director (DCRA).

1012.6 A vending machine operator's license shall not authorize the licensee to sell to other licensees for resale.

History

• SOURCE: Final Rulemaking published at 29 DCR 2804, 2808 (July 2, 1982).

9 DCMR § 1013 WHOLESALE LICENSES

1013.1 Manufacturers, jobbers, subjobbers, and all others who sell or offer to sell cigarettes to licensees shall obtain a wholesaler's license.

1013.2 The Director (DCRA) authorized to issue a wholesale license to a person maintaining a place of business outside the District for the manufacture or sale of cigarettes on the same terms and conditions applicable to the issuance of licenses to wholesalers maintaining places of business within the District.

1013.3 Manufacturers or their agents who sell cigarettes to consumers shall obtain a wholesaler's license.

1013.4 Wholesale licenses shall be openly displayed at all times in the licensee's place of business.

History

• SOURCE: Final Rulemaking published at 29 DCR 2804, 2809 (July 2, 1982).

9 DCMR § 1014 SALES TO PERSONS NOT LICENSED UNDER THE ACT

1014.1 A wholesale licensee is authorized to sell to the following persons not licensed under the Act cigarettes which do not bear evidence of a payment of tax, in accordance with the provisions of this section:

(a) An agency or instrumentality of the United States government or the government of the District of Columbia, or an exchange or commissary of the Armed Forces of the United States; and

(b) A purchaser which, at the time of the sale, is licensed by another jurisdiction to engage in the business of selling cigarettes in that jurisdiction.

1014.2 No sale to a governmental entity under §1014.1(a) shall be made except upon presentation by the purchaser to the wholesale licensee of a properly executed purchase order for the cigarettes purchased.

1014.3 The wholesale licensee shall maintain and preserve records necessary to account for each sale under this section to the satisfaction of the Deputy Chief Financial Officer.

1014.4 If the records required under §1014.3 are not kept for any sale under this section, the sale shall be deemed to be a taxable sale, and the licensee shall be liable to the District for any taxes due.

1014.5 The intent of a purchaser licensed to resell cigarettes in another jurisdiction under §1014.1(b) shall be evidenced by the following:

(a) The presence of tax stamps affixed at the time of delivery to each original package of cigarettes delivered denoting payment of the tax imposed upon cigarettes by that jurisdiction; or

(b) Delivery to the wholesale licensee by the purchaser of a copy (for retention by the licensee) of a permit issued by the Deputy Chief Financial Officer on the form prescribed by the Deputy Chief Financial Officer authorizing the licensee to sell and deliver to the purchaser cigarettes not bearing tax stamps of the jurisdiction in which the cigarettes are to be resold.

1014.6 In any case where a permit presented to a wholesale licensee authorizing the sale of untaxed cigarettes shows that transportation of the cigarettes is to be made in a vehicle owned or operated by the purchaser, the wholesale licensee shall, prior to delivering untaxed cigarettes to the purchaser, certify on the retained copy of the permit that he or she has verified the description of the vehicle, including its registration number, as set forth in the permit.

1014.7 If transportation is to be made by a common carrier, or by the licensee, the wholesaler shall certify on the permit that he or she delivered the cigarettes to the common carrier identified on the permit, or that the wholesaler transported the cigarettes.

1014.8 Within seventy-two (72) hours after sale of the cigarettes to the purchaser, the wholesale licensee shall furnish the Deputy Chief Financial Officer with a copy of the invoice or the bill of sale for the cigarettes sold.

1014.9 Any sale of cigarettes by a wholesaler to a purchaser not licensed under the Act which does not conform to the requirements of §1015 and this section shall be deemed to be a sale to a consumer and shall constitute a violation of this chapter; and the wholesale licensee, in addition to any penalties to which the licensee may be subject, shall be liable to the District for the tax on the cigarettes sold.

1014.10 Cigarette tax stamps issued by a jurisdiction other than the District shall not be affixed by a wholesale licensee to packages of cigarettes delivered by him or her to a person not licensed under the Act, unless those stamps were purchased by the licensee.

History

• SOURCE: Final Rulemaking published at 29 DCR 2804, 2809 (July 2, 1982).

9 DCMR § 1015 PERMITS FOR THE PURCHASE OF UNTAXED CIGARETTES

1015.1 An applicant for a permit to purchase untaxed cigarettes shall present to the Deputy Chief Financial Officer for retention by the Deputy Chief Financial Officer an official permit from the jurisdiction in which the applicant is licensed to engage in the sale of cigarettes, authorizing the applicant to purchase in the District untaxed cigarettes for transportation from the District to that jurisdiction.

1015.2 An applicant for a permit to purchase untaxed cigarettes shall also file with the Deputy Chief Financial Officer an application (on the form prescribed) under oath for a permit stating the following:

(a) The name and business address of the applicant;

(b) The jurisdiction in which the applicant is licensed to engage in the sale of cigarettes and to which the cigarettes will be transported; and

(c) The number and date of expiration of the license to sell cigarettes issued to the applicant by that jurisdiction.

1015.3 If the cigarettes are to be transported by the wholesale licensee from whom they are purchased, the name of the licensee shall be stated in the application.

1015.4 If the cigarettes are to be transported in a vehicle owned or operated by the applicant, the application shall state the name of the manufacturer, the body style and date of manufacture of the vehicle, the jurisdiction in which the vehicle is registered, and the registration number of the vehicle.

1015.5 If the cigarettes are to be transported by common carrier, the application shall state the name and location of the carrier.

1015.6 The applicant shall certify on the application that any untaxed cigarettes purchased by the applicant will be transported to and resold in the jurisdiction which issued the applicant a permit to purchase cigarettes in the District, and that the transportation will be made in the manner set forth in the application.

1015.7 The original of the permit issued under this section shall accompany the cigarettes while they are in transit to the jurisdiction in which the purchaser is licensed to sell cigarettes, and transportation shall be restricted to the vehicle, common carrier, or wholesale licensee indicated on the application filed with the Deputy Chief Financial Officer.

History

• SOURCE: Final Rulemaking published at 29 DCR 2804, 2811 (July 2, 1982).

9 DCMR § 1016 SALES OF CIGARETTES OTHER THAN IN ORIGINAL PACKAGES

1016.1 Cigarettes may not be sold in numbers less than the number contained in the original package.

1016.2 The sale of loose cigarettes from opened or original packages is prohibited.

History

• SOURCE: Final Rulemaking published at 29 DCR 2804, 2811 (July 2, 1982).

9 DCMR § 1017 DOCUMENTS AND RECORDS

1017.1 Whenever a licensee obtains any cigarettes, that licensee shall, at the time of the delivery of the cigarettes, procure from the supplier of the cigarettes an invoice, bill of lading, bill of sale, or other documentary evidence of transfer (also referred to in this section as "documents") of the cigarettes from the supplier to the licensee.

1017.2 The documents required under §1017.1 shall be dated and shall show the following:

(a) The name and address of the supplier;

(b) The quantity of cigarettes supplied; and

(c) The name of the licensee to which the cigarettes are supplied.

1017.3 Each wholesale licensee shall keep complete and accurate records of the following:

(a) The quantity of cigarettes procured by the licensee in any manner;

(b) The quantity of cigarettes disposed of by the licensee in any manner; and

(c) All purchases of District cigarette tax stamps.

1017.4 Each wholesale licensee shall keep all invoices, bills of lading, sales records, bills of sale, and other pertinent documents relating to the procurement and disposal of cigarettes. If the licensee is not able to retain the originals of these documents, then the licensee shall retain copies of the documents.

1017.5 Each wholesale licensee who stamps cigarettes for sale in the District shall take a monthly inventory at the beginning of business on the first business day of each month of all cigarettes on the licensee's premises or under the licensee's control. A licensee who finds it impractical to take inventory on the day prescribed in this subsection shall notify the Deputy Chief Financial Officer of the specific date on which the inventory will be taken.

1017.6 The inventory taken under §1017.5 shall not include cigarettes in vending machines or cigarettes transferred to retail stock on written memorandum.

1017.7 Each retail licensee and vending machine licensee shall keep all invoices, bills of lading, bills of sale, and other pertinent documents relating to cigarettes procured by the licensee in any manner. If the licensee is not able to retain the originals of the documents, then the licensee shall keep copies of the documents.

1017.8 All documents and records required to be kept under this section shall be preserved by the licensee for a period of at least three (3) years after the licensee has issued or received them.

History

• SOURCE: Final Rulemaking published at 29 DCR 2804, 2812 (July 2, 1982).

9 DCMR § 1018 FORMS AND REPORTS

1018.1 Each wholesale licensee shall be required to file with the Deputy Chief Financial Officer a monthly information report detailing the procurement and disposition of cigarettes and cigarette tax stamps on the forms provided by the Deputy Chief Financial Officer.

1018.2 Each manufacturer shall be required to file with the Deputy Chief Financial Officer a monthly information report detailing the distribution in the District of packages of five (5) or fewer cigarettes without consideration. Each report shall set forth the brand name(s), number and size(s) of packages, and the date(s) the packages were distributed.

1018.3 In addition to the requirements of § 1005.2 and this section, each manufacturer shall be required to file with the Deputy Chief Financial Officer a monthly report of unstamped cigarette shipments into the District. Each report shall include the customer's name, invoice number, date shipped, and quantity shipped.

1018.4 Reports required by this section shall be filed on or before the twenty-fifth (25th) day of the month following the month during which the sale, distribution, or shipment took place.

1018.5 The Deputy Chief Financial Officer may grant an extension of time not to exceed twenty (20) days to file any report required by the Act or this chapter. An application for extension of time to file a report must be filed with the Deputy Chief Financial Officer not later than the date on which the report is due for filing under the Act or this chapter.

History

• SOURCE: Final Rulemaking published at 29 DCR 2804, 2813 (July 2, 1982).

9 DCMR § 1019 REDEMPTION OF SPOILED OR UNUSED TAX STAMPS

1019.1 If any cigarette tax stamps issued under District tax laws are spoiled or rendered useless or unfit for the purpose intended, the amount paid for the stamps may be refunded or allowed as credit for the purchase of new stamps, in accordance with the provisions of this section.

1019.2 If a licensee owns tax stamps for which that licensee has no further use, the amount paid for the stamps may be refunded, in accordance with the provisions of this section.

1019.3 No refund shall be made under this section if the owner may be made whole by the Deputy Chief Financial Officer allowing a credit on the purchase of new stamps

1019.4 No allowance or refund shall be made unless the owner of the stamps files a written claim, under oath, with the Deputy Chief Financial Officer (on the form prescribed by the Deputy Chief Financial Officer) within whichever of the following time limits is applicable:

(a) Within six (6) months after the stamps have been spoiled or rendered useless or unfit for the purpose intended; or

(b) In the case of stamps for which the owner has no further use, within six (6) months after the date of purchase of the stamps.

1019.5 The owner of the stamps shall furnish all of the facts relative to the stamps spoiled, or rendered useless or unfit for the purpose intended, or for which the owner has no further use.

1019.6 The written claim, when presented, shall be accompanied by the useless, spoiled, or unfit stamps, and the claimant shall furnish satisfactory proof conclusively establishing the following:

(a) That the stamps were purchased by the licensee making the claim for refund or allowance of credit; and

(b) That the licensee did not, nor did any person by direction of the licensee or with the consent or knowledge of the licensee, willfully or intentionally spoil or render such stamps useless or unfit for the purpose for which they were intended.

1019.7 The written claim shall be accompanied by any additional information that the Deputy Chief Financial Officer may require. The claimant shall also provide any additional information that the Deputy Chief Financial Officer may require.

1019.8 If the claimant fails to provide any of the information required by the Deputy Chief Financial Officer or this section; or if the Deputy Chief Financial Officer believes the claim to be false or fraudulent; or if the information so provided is, in the opinion of the Deputy Chief Financial Officer, insufficient to establish the claim; the claim shall be denied.

1019.9 All retail licensees and vending machine licensees must file a claim for the redemption of unused cigarette stamps purchased prior to March 10, 1982 on or before September 10, 1982.

History

• SOURCE: Final Rulemaking published at 29 DCR 2804, 2813 (July 2, 1982).

9 DCMR § 1020 DESTROYED TAX STAMPS

1020.1 If any cigarette tax stamps issued under District tax laws have been destroyed, the amount paid for the stamps may be refunded or allowed as a credit for the purchase of new stamps, in accordance with the provisions of this section.

1020.2 No refund shall be made under this section if the owner can be made whole by the Deputy Chief Financial Officer allowing a credit on the purchase of new stamps.

1020.3 No allowance or refund shall be made unless the owner of the stamps files a written claim with the Deputy Chief Financial Officer (on the form prescribed) within six (6) months after the stamps have been destroyed.

1020.4 The written claim shall be under oath, and shall state all the facts relative to the destruction of the stamps.

1020.5 The written claim shall be accompanied by any additional information that the Deputy Chief Financial Officer, in the Deputy Chief Financial Officer's sole discretion, may require. The claimant shall provide any additional information that the Deputy Chief Financial Officer may require.

1020.6 The written claim, when presented, shall be accompanied by satisfactory proof conclusively establishing the following:

(a) That the stamps were purchased by the licensee making the claim for refund or allowance of credit;

(b) That the licensee did not, nor did any person by direction of the licensee or with the consent or knowledge of the licensee, willfully or intentionally destroy the stamps;

(c) That the stamps were in the possession of the licensee at the time they were destroyed;

(d) That the stamps were, in fact, totally and physically destroyed;

(e) The circumstances under which the stamps were destroyed; and

(f) The location and place where the stamps were being kept or stored at the time they were destroyed.

1020.7 If the claimant fails to provide any forms, affidavits, or other information required by the Deputy Chief Financial Officer; or if the Deputy Chief Financial Officer believes the claim to be false or fraudulent; or if the proof of destruction is, in the opinion of the Deputy Chief Financial Officer, insufficient to establish the claim; the claim shall be denied.

History

• SOURCE: Final Rulemaking published at 29 DCR 2804, 2814 (July 2, 1982).

9 DCMR § 1021 CIGARETTES RETURNED TO THE MANUFACTURER

1021.1 Notwithstanding the provisions of §§1019 and 1020, if any packages of cigarettes bearing stamps or meter impressions issued to any licensee under the Act are returned by any licensee to the manufacturer of the cigarettes because the packages of cigarettes are in an unsalable condition, the amount paid by the licensee for the stamps or meter impressions may be refunded to the licensee or allowed as a credit to the licensee on the purchase of new stamps or meter impressions, in accordance with the provisions of this section.

1021.2 No allowance or refund shall be made unless the licensee files a written claim, under oath, with the Deputy Chief Financial Officer (on the form prescribed) within six (6) months after it has been determined that the packages of cigarettes are unsalable.

1021.3 The written claim shall be under oath, and shall state all of the facts relating to the unsalability of the cigarettes and the return of the cigarettes to the manufacturer.

1021.4 In each case, the licensee making the claim for refund shall furnish satisfactory proof conclusively establishing that the licensee applying for the refund has purchased sufficient stamps or meter impressions during the previous twelve (12) months to cover the amount of the claim for refund or credit for which application is being made.

1021.5 The written claim shall be accompanied by any additional information that the Deputy Chief Financial Officer, in his or her discretion, may require; and the licensee and manufacturer shall submit any additional information that the Deputy Chief Financial Officer may require.

1021.6 The licensee shall submit (on the prescribed form) with the claim, a statement under oath from the manufacturer showing the number and denominations of the District of Columbia cigarette tax stamps or meter impressions on packages of cigarettes received from the licensee as unsalable, and stating that the stamps or meter impressions were destroyed by the manufacturer.

1021.7 If the licensee or manufacturer fail to provide any of the affidavits or other information required by this section or by the Deputy Chief Financial Officer; or if the Deputy Chief Financial Officer believes the claim to be false or fraudulent; or if the information so provided is, in the opinion of the Deputy Chief Financial Officer, insufficient to establish the claim; the claim shall be denied.

History

• SOURCE: Final Rulemaking published at 29 DCR 2804, 2815 (July 2, 1982).

9 DCMR § 1022 CLAIMS FOR REFUND OR CREDIT

1022.1 No claim for refund or allowance for credit shall be allowed for misplaced or lost stamps, or for stamps allegedly stolen from the licensee.

1022.2 Application for refund or for allowance for credit under § 1019, § 1020, or § 1021 shall be made as follows:

(a) In the case of an individual licensee, by the licensee;

(b) In the case of a partnership, by each of the partners; or

(c) In the case of a corporation, by the president or vice-president of the corporation, whose statement shall be attested by the secretary or assistant secretary of the corporation.

1022.3 Manufacturers' affidavits under § 1021 shall be executed as follows:

(a) In the case of a corporate manufacturer, by an officer of the corporation having authority to sign for the corporation;

(b) In the case of a manufacturer which is a partnership, by a partner having authority to sign on behalf of the partnership; or

(c) In the case of a manufacturer who is an individual, by that individual.

1022.4 In lieu of the requirements of § 1022.3, the manufacturer's affidavit may be made by an individual having a power of attorney from the manufacturer to execute such an affidavit. A properly authenticated copy of the power of attorney shall be submitted with the affidavit.

History

• SOURCE: Final Rulemaking published at 29 DCR 2804, 2816 (July 2, 1982).

9 DCMR § 1023 TRANSITION PERIOD

1023.1 All retail licensee and vending machine licensees who have in their possession unstamped cigarettes and cigarette tax stamps purchased prior to the March 10, 1982, may continue to affix those stamps until April 10, 1982.

1023.2 All retail licensees and vending machine licensees shall file a claim for the redemption of unused cigarette stamps purchased prior to March 10, 1982 on or before September 10, 1982.

History

• SOURCE: Final Rulemaking published at 29 DCR 2804, 2817 (July 2, 1982).

9-11 QUALIFIED HIGH TECHNOLOGY COMPANY

9 DCMR § 1100 (Reserved)

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1101 BENEFIT APPLICATIONS FOR QUALIFIED HIGH TECHNOLOGY COMPANIES

1101.1 To claim a credit or other benefit, a Qualified High Technology Company shall be required each year to self-certify to obtain from the Deputy Chief Financial Officer a certificate of benefits. No tax exemptions or benefits shall be allowed without a valid certificate of benefits obtained prior to or concurrently with the filing of a return on which such benefits are claimed.

1101.2 A certificate of benefits shall be deemed to be attached to any tax return due and filed during the period for which the certificate of benefits is valid and unexpired.

1101.3 The issuance of a certificate of benefits does not prohibit the Office of Tax and Revenue from conducting an audit to insure compliance with the relevant Qualified High Technology Company statutes and definitions.

1101.4 Beginning with certificates of benefits issued on or after January 1, 2019, certificates of benefits issued to a Qualified High Technology Company through an annual certification process shall be valid until the expiration date stated on the certificate.

1101.5 In order to receive a certificate of benefits, a Qualified High Technology Company shall follow the Office of Tax and Revenue’s electronic self-certification process.

1101.6 All benefit applications filed by Qualified High Technology companies shall include, but are not limited to, the following information:

Taxpayer ID Number;

Name;

Address;

Sales Tax Account Number;

NAICS Code;

Information demonstrating QHTC eligibility;

First year certified as QHTC;

Explanation of principal business activity;

Amount of QHTC Exempt Sales/Purchases from the prior year (broken down by period);

Number of QHTC employees hired;

Number of QHTC employees hired who are District residents;

Schedules detailing QHTC employee credits

Number of QHTC jobs created in the past year;

Gross revenue; and

Gross revenue earned from QHTC activities in the District.

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002); as amended by Final Rulemaking published at 66 DCR 00054 (January 4, 2019). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 1101

9 DCMR § 1102 TAX CREDIT TO QHTCS: EMPLOYMENT RELOCATION COSTS

1102.1 A QHTC shall be allowed a credit against the tax imposed by D.C. Official Code § 47-1817.6 for each dollar reimbursed to or paid on behalf of each qualified employee for relocation costs. The credit shall not exceed:

(a) $5,000.00 for each employee who relocates his or her employment to the District from a location outside the District but does not relocate his or her principal residence into the District. The annual credit shall not exceed $ 250,000.00; or

(b) $7,500.00 for each employee who relocates his or her employment to the District from a location outside the District and also relocates his or her principal residence into the District. The annual credit shall not exceed $ 1,000,000.00.

(c) For purposes of this subsection, the principal residence shall be determined as of the last day of the first six months of employment in the District by a QHTC.

(d) This $ 5000 (or $7500) credit can be allocated over 2 years if the relocation costs are incurred in 2 separate tax years.

1102.2 The tax credit for employment relocation costs shall not be allowed:

(a) Until the QHTC relocates at least 2 qualified employees from employment outside the District to inside the District;

(b) Until the QHTC employs the qualified employee for at least 6 months in the District in an activity described in D.C. Official Code § 47-1817.1(5)(A)(iii);

(c) If the qualified employee works less than 35 hours per week;

(d) If the qualified employee is a Key Employee; or

(e) If the QHTC claims a deduction for the relocation costs.

1102.3 If the amount of the credit allowable under this section exceeds the tax otherwise due from a QHTC, the unused amount of the credit shall not be carried forward after the tenth year following the first year the taxpayer files a return claiming employment relocation costs under section 1102.1.

1102.4 Costs qualify as relocation costs if the following conditions are met:

(a) The commencement date of the qualified employee's move or financial assistance must be after December 31, 2000;

(b) The cost is the only relocation cost requested for the qualified employee; and

(c) Deductible expenses do not exceed the limits set forth in this section.

(d) The following are examples of the application of §§ 1102.1 to 1102.4:

(1) Company C, a QHTC, employs 10 people in activities described in D.C. Official Code § 47-1817.1(5)(A)(iii). On January 2, 2001, Company C hires employees X and Y, who are both qualified full time employees, to work at Company C's place of business in the District in an activity described in D.C. Official Code § 47-1817.1(5)(A)(iii). Both employee X and employee Y previously were employed outside the District. Employees X and Y are not Key Employees within the meaning of § 1199. Both employees, X and Y purchase residences outside the District. Company C reimburses employees X and Y for their moving expense of $10,000 and the cost of financing the purchase of their new residences of $15,000. Company C does not plan to take a deduction for the relocation costs paid employees X and Y. After employees X and Y are employed by Company C for 6 months, Company C is entitled to a tax credit of $ 10,000.

(2) Assume the same facts as in example 1, except employee X purchased his residence in the District within six months of employment in the District. Company C is entitled to a tax credit of $7,500 for employee X and $5,000.00 for employee Y.

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1103 TAX CREDITS TO QHTCS: WAGES PAID TO QUALIFIED EMPLOYEES

1103.1 For tax years beginning after December 31, 2000 and ending on or before December 31, 2019, a QHTC shall be allowed a credit against the tax imposed by D.C. Official Code § 47-1817.6 equal to ten percent (10%) of the wages paid during the first twenty-four (24) calendar months to a qualified employee who is employed in the District by the QHTC in any of the activities defined in D.C. Official Code § 47-1817.1(5)(A)(iii) and hired after December 31, 2000.

1103.2 For tax years beginning after December 31, 2019, a QHTC shall be allowed a credit against the tax imposed by D.C. Official Code § 47-1817.6 equal to five percent (5%) of the wages paid during the first twenty-four (24) calendar months to a qualified employee who is employed in the District by the QHTC in any of the activities defined in D.C. Official Code § 47-1817.1(5)(A)(iii) and hired after December 31, 2017.

1103.3 The applicable credit amount taken under § 1103.1 and § 1103.2, and as limited by § 1103.4 and § 1103.5 below, shall be based on the taxable year in which the credits are taken, not on the hire date of the relevant employee.

1103.4 For tax years beginning after December 31, 2000 and ending on or before December 31, 2019, the credit shall not exceed, for each qualified employee, five thousand dollars ($5,000) in a taxable year.

1103.5 For tax years beginning after December 31, 2019, the credit shall not exceed, for each qualified employee, three thousand dollars ($3,000) in a taxable year.

1103.6 The credit shall not be allowed if:

(a) The employee is a key employee;

(b) The QHTC accords the qualified employee lesser benefits or rights than it accords other employees in similar jobs; or

(c) The qualified employee is employed as the result of:

(1) The displacement of another employee;

(2) A strike or lockout;

(3) A layoff in which other employees are awaiting recall; or

(4) A reduction of the regular wages, benefits, or rights of others in similar jobs.

1103.7 A credit allowable under this section may be carried forward for ten (10) years if:

The amount of the credit allowable under this section exceeds the tax otherwise due from a Qualified High Technology Company; and

The amount of the credit allowable under this section was obtained for wages of a qualified employee hired before October 1, 2019.

1103.8 A credit allowable under this section obtained for wages of a qualified employee hired on or after October 1, 2019 shall not be carried forward.

1103.9 The following are examples of the application of §§ 1103.1 to 1103.5:

(a) On January 1, 2019, Company D, a QHTC, hires ten (10) employees at an annual salary of $40,000 each. Since the workers perform the activities described in D.C. Official Code § 47 -1817.1(5)(A)(iii); they are classified as qualified employees. None of the qualified employees are affected by the restrictions of § 1103.6. The annual payroll each year for the 10 qualified employees is $400,000. For tax year 2019, Company D is entitled to a tax credit equal to 10% of the annual salaries of $400,000 received by the 10 qualified employees, or $40,000. For tax year 2020, Company D is entitled to a tax credit equal to 5% of the annual salaries of $400,000 received by the 10 qualified employees, or $20,000, as § 1103.2 would apply.

(b) Assume the same facts as in Example 1, except the annual payroll for each year is $600,000. For tax year 2019, Company D is entitled to a tax credit of only $5,000.00 for each qualified worker, or $50,000, since the limitation of § 1103.4 would apply. For tax year 2020, Company D is entitled to a tax credit of only $3,000.00 for each qualified worker, or $30,000, since the limitation of § 1103.5 would apply.

(c) Assume the same facts as in Example 1, except five (5) of the qualified employees are entry level and are paid $30,000 each and 5 of the qualified employees are highly skilled and are paid $70,000 each. For tax year 2020, the limitation of § 1103.2 applies to the 5-entry level qualified employees and the limitation of § 1103.5 applies to the highly skilled qualified employees. Therefore, Company D is entitled to a tax credit of $22,500, calculated as follows: (1) the total annual wages paid to the entry level qualified employees is $150,000 of which five percent (5%), or $7,500, is available for the credit, (2) the total annual wages paid to the highly skilled qualified employees is $350,000 and since the credit for each of the five highly skilled qualified employee exceeds $3,000, only $15,000 is available for the credit, (3) $7,500 plus $15,000 totals $22,500.

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002); as amended by Final Rulemaking published at 67 DCR 4766 (May 1, 2020). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 1103

9 DCMR § 1104 TAX CREDITS TO QHTCS: RETRAINING COSTS FOR QUALIFIED DISADVANTAGED EMPLOYEES

1104.1 For taxable years beginning after December 31, 2000, a QHTC shall be allowed a credit against taxes imposed by D.C. Official Code § 47-1817.6 for expenditures paid or incurred by a QHTC during the taxable year for retraining of a qualified disadvantaged employee.

1104.2 The following expenditures for retraining qualified disadvantaged employees paid by a QHTC are eligible for the tax credit:

(a) Tuition, costs, or fees for credit or noncredit courses leading to academic degrees or certification of professional, technical, or administrative skills taken at District-based accredited colleges or universities;

(b) The cost for formal enrollment in training programs offered by nonprofit training providers (including community or faith-based organizations certified for the provision of training, or job-readiness preparation at skill levels suitable for immediate performance of entry-level jobs) that are pre- qualified for participation under this section by the Department of Employment Services and are in demand among technology companies in general, and among information and telecommunications companies in particular;

(c) Eligible training programs, other than those at District-based accredited colleges or universities, that are pre-qualified for participation under this section by the Department of Employment Services; and

(d) Worker retraining programs undertaken through an apprenticeship agreement approved by the District of Columbia Apprenticeship Council.

1104.3 The credit claimed under this section shall be limited to twenty thousand dollars ($20,000) for each qualified disadvantaged employee during the first 18 months of employment.

1104.4 If the amount of the credit allowable under this section exceeds the tax otherwise due from a QHTC, the unused amount of the credit shall not be carried forward after the tenth year following the first year the taxpayer files a return claiming QHTC status. In the alternative, the QHTC can elect to take a refundable credit in an amount up to fifty percent (50%) of the unused credit with no carryover of the unused credit to subsequent years. A QHTC, that is not a corporation, may file a claim for refund.

1104.5 The retraining costs shall be prorated for the number of months of the training program.

1104.6 The following are examples of the application of §§ 1104.1 through 1104.5:

(a) Company E, a QHTC, hires 10 qualified employees to work in activities described in D.C. Official Code § 47 -1817.1(5)(A)(iii). Five of Company E's employees are qualified disadvantaged employees within the meaning of § 1199. None of the qualified disadvantaged employees are affected by the restrictions of § 1199. On January 1, 2001, Company E enters into a 24- month program that was pre-qualified by the Department of Employment Services to retrain five qualified disadvantaged employees. The cost for the 24-month program is $20,000 for each qualified disadvantaged employee.

In tax year 2001, Company E is entitled to a tax credit of $50,000 and a tax credit of $25,000 in tax year 2002, computed as follows: Company E's retraining costs were $833 per employee per month ($833 per month x 5 employees x 12 months = $50,000 and $833 per month x 5 employees x 6 months = $25,000).

The credit limitation of § 1104.3 is $1,111 per employee per month in retraining costs, for a period not to exceed eighteen months, paid by a QHTC to retrain each qualified disadvantaged employee.

(b) Assume the same facts as in example 1, except the retraining cost for the 24- month program is $60,000 per qualified disadvantage employee. Company E is entitled to a tax credit in tax year 2001 of $66,667 and a tax credit of $33,333 in tax year 2002, even though Company E's retraining costs are $2,500 per employee per month. § 1104.3 limits the credit to $1,111 per employee per month in retraining costs, for a period not to exceed eighteen months ($1,111 x 5 x 12 = $66,667 and $1,111 x 5 x 6m = $33,333).

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1105 TAX CREDITS TO QHTCS: WAGES PAID TO QUALIFIED DISADVANTAGED EMPLOYEES

1105.1 A QHTC shall be allowed a credit against the tax imposed by D.C. Official Code § 47-1817.6 equal to fifty percent (50%) of the wages paid to a qualified disadvantaged employee, as defined in § 1199, during the first 24 calendar months of employment.

1105.2 The credit claimed under this section shall be limited to fifteen thousand dollars ($15,000) in a taxable year for each qualified disadvantaged employee.

1105.3 The credit shall not be allowed if:

(a) The employee is a key employee;

(b) The QHTC accords the qualified employee lesser benefits or rights than it accords other employees in similar jobs; or

(c) The qualified employee is employed as the result of:

(1) The displacement of another employee;

(2) A strike or lockout;

(3) A layoff in which other employees are awaiting recall; or

(4) A reduction of the regular wages, benefits, or rights of other employees in similar jobs.

1105.4 If the amount of the credit allowable under this section exceeds the tax otherwise due from a QHTC, the unused amount of the credit shall not be carried forward after the tenth year following the first year the taxpayer files a return claiming QHTC status.

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1106 TAX ON QUALIFIED HIGH TECHNOLOGY COMPANIES

1106.1 For tax years ending on or before December 31, 2019, in lieu of the tax on taxable income imposed by D.C. Official Code § 47-1807.2, subject to the credits applicable thereto, a tax on taxable income at a rate of six percent (6%) shall be imposed upon QHTCs that are corporations except as modified by D.C. Official Code § 47-1817.06(a)(2)(A).

1106.2 For tax years beginning after December 31, 2019, a QHTC shall be allowed a credit against taxes imposed by § 47-1807.02 as follows:

(a) The credit shall be allowed in an amount equal to the lesser of:

$250,000 per taxable year; or

The difference between the amount of tax that would otherwise be due based on the applicable rate of tax imposed by § 47-1807.02 and the reduced rate of six percent (6%).

(b) The credit shall be allowed for five (5) taxable years from the later of:

The tax year ending December 31, 2019 for annual year filers, or for fiscal year filers, the first tax year ending after December 31, 2019; or

The last tax year the Qualified High Technology Company is eligible to receive an exemption under D.C. Official Code § 47-1817.06(a)(2).

(c) After the expiration of the period outlined in paragraph (B), the QHTC will pay franchise tax at the general rate as required by D.C. Official Code § 47-1807.02.

1106.3 Notwithstanding § 1106.1 or §1106.2, a QHTC certified pursuant to § 47- 1805.05 shall not be subject to tax imposed under Chapter 18 of Title 47 of the D.C. Official Code for five (5) taxable years from the first tax year that the QHTC has District taxable income. The total amount that each QHTC may receive in benefits under this paragraph shall not exceed fifteen million dollars ($15,000,000). This $15 million cap is cumulative and applies to all benefits received by a QHTC under D.C. Official Code § 47-1817.06(2) beginning from the original enactment of the program in 2001.

1106.4 Examples.

Newly Formed QHTC Example. Assume a QHTC that enters into business in the District for the first time in 2020, and has District taxable income for the first time in tax year 2021. The QHTC will be entitled to pay District franchise tax at a zero percent rate for 5 taxable years from tax year 2021, or until the cumulative franchise tax benefits received by the QHTC exceed $15 million. Beginning in tax year 2026, the QHTC will be allowed the credit provided for under § 1106.2(B) for a period of 5 years.

Existing QHTC Example. Assume a QHTC that entered into business in the District for the first time in 2017, had District taxable income for the first time in 2017, and has received $2 million in QHTC franchise tax benefits. Under § 1106.3, the QHTC continues to be eligible for the 0% tax rate only through tax year 2021, so long as the cumulative benefits from the exemption do not exceed $15 million. Thereafter, the QHTC would be eligible only for the credit allowable under § 1106.2.

Credit Calculation Example. Assume a QHTC entitled to the credit under § 1106.2 in a year in which its District taxable income was $15 million and the franchise tax rate under § 47-1807.02 is 8.25%. In order to calculate the credit to which it is entitled, the QHTC must first determine the tax it would be required to pay on its District taxable income if it were not a QHTC by applying the standard franchise tax rate found in § 47-1807.02 to its District taxable income ($15 million X 8.25% = $1,237,500). The QHTC must then apply the QHTC reduced rate of six percent (6%) to the QHTC’s District taxable income ($15 million X 6% =$900,000). The taxpayer must then compare the two tax due amounts to determine the difference ($1,237,500 -$900,000 = $337,500). Since the calculated difference of $337,500 exceeds $250,000, the taxpayer is entitled to a franchise tax credit of $250,000.

1106.5 The transfer of ownership of a QHTC shall not affect the provisions of this section. If a transfer of ownership of a QHTC occurs, the benefits and limitations of this section shall continue to apply as if no transfer occurred. A QHTC which has exhausted the franchise tax benefits allowable under this chapter will not be entitled to additional benefits after a transfer of ownership.

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002); as amended by Final Rulemaking published at 67 DCR 4769 (May 1, 2020). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 1106

9 DCMR § 1107 ELECTION TO EXPENSE CERTAIN DEPRECIABLE BUSINESS ASSETS

1107.1 In the case of a QHTC there shall be allowed a deduction from gross income in computing net income equal to:

(a) An amount that is the lesser of forty thousand dollars ($40,000) or the actual cost of property for tangible personal property described in Internal Revenue Code of 1986, as amended (IRC) § 179(d)(1) and including leasehold improvements;

(b) If the QHTC is a tenant, the cost of any real property and leasehold improvements regardless of whether or not such improvements become an integral part of the realty; such improvements shall include improvements described in 9 DCMR §§ 702.3, 702.4, and 702.5; or

(c) The amount claimed on the QHTC's corresponding federal income tax return should be considered as part of the amount allowed under IRC § 162.1(a).

1107.2 The following are examples of the application of §1107.1:

(a) On January 1, 2001, Company F, a QHTC, purchases computers at a cost of $100,000. The computers are used by Company F to conduct qualified high technology activities. In filing their Federal income tax return, Company F claims the maximum deduction of $20,000 of the cost of the computers. In filing their District franchise tax return, Company F is allowed up to an additional $20,000 of the cost of the computers, for a maximum deduction for D.C. tax purposes of $40,000.

(b) Same facts as in Example 1, except Company F does not claim the maximum deduction for Federal tax purposes but claims $10,000.00. In filing their District franchise tax return, Company F is allowed to deduct up to an additional $30,000 of the cost of the computers, for a maximum deduction for D.C. tax purposes of $40,000.

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1108 UNINCORPORATED BUSINESS FRANCHISE TAX EXEMPTION

1108.1 A QHTC that is not a corporation is exempt from the unincorporated business franchise tax. A QHTC that is not a corporation may claim a partial refund of its retraining costs as provided by D.C. Official Code § 47-1817 by timely filing a Claim for Refund-QHTC Retraining Cost, Form FP-332. A QHTC that is not a corporation may claim the sales and personal property tax benefits provided by the Act as well as the real property benefits of Title III of the Act.

1108.2 The following are examples of the application of § 1108.1:

(a) Company F, a Certified QHTC, is a limited liability company that has elected for Federal tax purposes to be taxed as a partnership. D.C. Official Code § 47-1808.1(5) provides that Company F is exempt from the unincorporated business franchise tax. The partnership QHTC will file a District information income tax return, Form D-65, and the partnership income will flow through to the partners. The partners who are residents of the District will report their prorated partnership income on their District individual income tax returns, Form D-40. The partners who are not residents of the District will report their prorated partnership income on their individual income tax returns in the state in which they are a resident.

(b) Company F, a Certified QHTC, is a limited liability company that has elected for Federal tax purposes to be taxed as a corporation. The statute provides that Company F is entitled to reduce its corporate franchise tax liability by the credits provided by Title II and IV of the Act, - the credit for reduction in the corporation tax rate, the relocation credit, the wage credit and the retraining credit. Also, Company F can claim the sales and personal property tax benefits provided by the Act as well as the real property benefits of Title Ⅲ of the Act.

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1109 EXEMPTION FROM TAX OF CAPITAL GAINS ON QUALIFIED ASSETS

1109.1 Qualified capital gain from the sale or exchange of QHTC assets held for more than five (5) years are excluded from the computation of District gross income.

1109.2 The amount of qualified capital gain shall not include gain which:

(a) Is attributable to real property or an intangible asset which is not an integral part of a QHTC; and

(b) Occurs before January 1, 2001 or after December 31, 2007.

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1110 ROLLOVER OF CAPITAL GAIN FROM QUALIFIED STOCK TO OTHER QUALIFIED STOCK

1110.1 In the event of a sale of qualified stock held by a taxpayer other than a corporation for more than 6 months and with respect to which the taxpayer elects the application of this section, gain from the sale shall be recognized to the extent the amount realized on the sale exceeds the cost of qualified stock purchased by the taxpayer during the sixty (60) day period beginning on the date of the sale, reduced by the amount of the gain, not to exceed such cost, previously deferred under this section.

1110.2 A taxpayer shall be treated as having purchased qualified stock if, but for the purposes of §§ 1110.3 and 1110.4, the adjusted basis of the property in the hands of the taxpayer would be its cost.

1110.3 If gain from a sale is not recognized under § 1110.1, the unrecognized gain shall reduce the basis of qualified stock, in the order acquired, which is purchased by the taxpayer during the sixty (60) day period described in § 1110.1.

1110.4 For purposes of determining whether the non-recognition of gain under § 1110.1 applies to qualified stock which is sold:

(a) The taxpayer's holding period for the stock and the stock referred to in this section shall be determined without regards to IRC § 1223; and

(b) Only the first 6 months of the taxpayer's holding period for the stock referred to in this section shall be taken into account for purposes of applying IRC § 1202(c)(2).

1110.5 This section shall not apply to any gain that is treated as ordinary income under the IRC.

1110.6 The following is an example of the application of §§ 1110.1 through 1110.5:

G, an individual taxpayer, purchased qualified stock in QHTC X on January 1, 2001 for $7,000. On July 1, 2001, G sells all her stock in Company X for $10,000. On August 1, 2001, G purchases qualified stock in QHTC Y for $5,000. The stock of Company X and Company Y is qualified small business stock as defined by IRC §1202. G elects to apply this section, and the effect is computed in the following manner:

01/01/01 Purchase qualified stock in Company X

Adjusted Basis

$7,000.00

07/01/01 Sold Company X stock

Amount Realized

$10,000.00

Amount of Gain (line 1 minus line 2)

$3,000.00

Amount realized on sale (line 2)

$10,000.00

Less qualified stock in Company Y purchased within 60 days of sale

($5,000.00)

Less Amount of Gain (line 3)

($3,000.00)

Amount of Gain recognized

$2,000.00

Amount of Gain not recognized (line 3 minus line 7)

$1,000.00

Basis in Company Y's stock (line 5 minus line 8)

$4,000.00

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1111 SALES AND USE TAX EXEMPTION FOR QHTCS

1111.1 Sales tax exemptions for sales by Qualified High Technology Companies under D.C. Official Code § 47-2001(n)(2)(G) are repealed effective October 1, 2019.

1111.2 Sales tax exemptions for sales to Qualified High Technology Companies under D.C. Official Code § 47-2005(31) are repealed effective October 1, 2019.

1111.3 All QHTC Exempt Purchases Certificates, regardless of the expiration date on the QHTC Exempt Purchases Certificate, are terminated as of October 1, 2019.

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002); as amended by Final Rulemaking published at 67 DCR 4772 (May 1, 2020). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 1111

9 DCMR § 1112 PERSONAL PROPERTY TAX INCENTIVES FOR QUITCS

1112.1 Qualified property purchased by a QHTC after December 31, 2000 shall be exempt from personal property tax for 10 years beginning in the year of purchase.

1112.2 If qualified property purchased by a QHTC after December 31, 2000, is being used or available for use in the eleventh year and thereafter, the qualified property shall be reported at 25 percent (25%) of the original cost or exchange value, unless the qualified property is qualified technological equipment, as defined in D.C. Official Code § 47-1523(b), in which case it shall be reported at 10 percent (10%) of the original cost or exchange value.

1112.3 The following is an example of the application of §§ 1112.1 and 1112.2:

After December 31, 2000, Company F, a certified QHTC, purchased computer equipment that is qualified property. The computer equipment purchased by Company F is exempt from personal property tax for 10 years beginning with the date of purchase.

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1113 (Reserved)

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1114 (Reserved)

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1115 REAL PROPERTY TAX ABATEMENT FOR CERTAIN COMMERICAL PROPERTIES

1115.1 For a real property owner, the real property tax attributable to the increase in the assessed value for (a) and/or (b), below, shall be abated for 5 years if the owner:

(a) Constructs a new eligible building for a QHTC and the initial or temporary certificate of occupancy was received after December 31, 2000; or

(b) Improves or renovates an existing eligible building or a portion of an existing building which is necessary to adapt or to convert for use by a QHTC.

(c) In order to qualify for the abatement under this section, a QHTC must apply to the Real Property Administration of OTR on or before the first day of the real property tax year (that begins October 1) of the tax year for which the QHTC seeks the abatement.

1115.2 For the tenant who is liable for the real property tax, the real property tax attributable to the increase in the assessed value shall be abated for 5 years. The abatement applies where the tenant makes improvements or renovations to an existing eligible building or a portion of an existing eligible building which are necessary to adapt or to convert for use by:

(a) The tenant who is a QHTC; or

(b) A subtenant who is a QHTC.

1115.3 The amount of an abatement under this section will appear on the real property tax bill as a credit. If a tenant is liable for real property taxes under a lease, it will be solely the responsibility of the owner/landlord to transfer the benefits under this section to the tenant. There shall be no recourse by the tenant against the District for the failure of the owner/landlord to make the transfer of benefits.

1115.4 If a lease for real property for an eligible building that is used by a QHTC is terminated during the 5-year abatement period, the abatement will remain in effect for twelve months or less if the owner or tenant makes a good faith effort to lease the real property to a QHTC.

1115.5 The abatement period for the real property shall not exceed 5 years from the first day of the month following the rent commencement date. For purposes of this section, the rent commencement date shall be the earlier of the date an initial certificate of occupancy is issued for, or a person takes possession or renews possession of, the improvement or renovation (made under this section) of any part of the real property.

1115.6 On or after the rent commencement date, the abatement shall be the increase in real property tax attributable to the improvements or renovations made under this section as such improvements or renovations are valued by the Deputy Chief Financial Officer as of the rent commencement date.

1115.7 The annual income expense statement filed by the owner shall be deemed the real property tax return for purposes of this section. Each year, the person filing the income expense statement shall attach thereto a copy of the Form QHTC-CERT from each tenant. The person filing such statement shall indicate the rent commencement date, as defined in section 1115.5. The person filing such statement shall state thereon the square, suffix, and lot of the real property.

1115.8 The abatement will be revoked immediately if the owner or tenant leases the real property to a tenant who is not a QHTC, which causes the building to become no longer an eligible building.

1115.9 The owner shall immediately provide written notice to the Deputy Chief Financial Officer, when the real property becomes ineligible. The owner shall state the square, suffix, and lot on the written notice as well as the date of ineligibility.

1115.10 The Board of Real Property Assessments and Appeals, or the Superior Court of the District of Columbia, shall, when rendering a decision, make allocation to the renovations or improvements made under this section.

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1116 (Reserved)

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1117 (Reserved)

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1118 (Reserved)

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1119 (Reserved)

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1120 (Reserved)

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1121 (Reserved)

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• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1122 (Reserved)

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• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1123 (Reserved)

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1124 (Reserved)

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1125 (Reserved)

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1126 (Reserved)

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• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1127 (Reserved)

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• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1128 (Reserved)

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• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1129 (Reserved)

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1130 (Reserved)

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1131 (Reserved)

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1132 (Reserved)

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• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1133 (Reserved)

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• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1134 (Reserved)

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• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1135 (Reserved)

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• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1136 (Reserved)

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• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1137 (Reserved)

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• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1138 (Reserved)

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• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1139 (Reserved)

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• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1140 (Reserved)

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• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1141 (Reserved)

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• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1142 (Reserved)

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• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1143 (Reserved)

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• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1144 (Reserved)

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• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1145 (Reserved)

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• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1146 (Reserved)

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• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1147 (Reserved)

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• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1148 (Reserved)

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1149 (Reserved)

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• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1150 (Reserved)

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1151 (Reserved)

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• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1152 (Reserved)

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• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1153 (Reserved)

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• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1154 (Reserved)

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• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1155 (Reserved)

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• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1156 (Reserved)

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1157 (Reserved)

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• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1158 (Reserved)

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1159 (Reserved)

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1160 (Reserved)

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1161 (Reserved)

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1162 (Reserved)

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1163 (Reserved)

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1164 (Reserved)

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1165 (Reserved)

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1166 (Reserved)

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1167 (Reserved)

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1168 (Reserved)

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1169 (Reserved)

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1170 (Reserved)

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1171 (Reserved)

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• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1172 (Reserved)

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• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1173 (Reserved)

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1174 (Reserved)

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1175 (Reserved)

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1176 (Reserved)

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1177 (Reserved)

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• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1178 (Reserved)

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1179 (Reserved)

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1180 (Reserved)

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1181 (Reserved)

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1182 (Reserved)

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1183 (Reserved)

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1184 (Reserved)

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1185 (Reserved)

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1186 (Reserved)

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1187 (Reserved)

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1188 (Reserved)

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1189 (Reserved)

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1190 (Reserved)

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1191 (Reserved)

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1192 (Reserved)

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1193 (Reserved)

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1194 (Reserved)

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1195 (Reserved)

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1196 (Reserved)

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1197 (Reserved)

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1198 (Reserved)

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002).

9 DCMR § 1199 DEFINITIONS

1199.1 As used in this chapter, the following terms and phrases shall have the meaning ascribed:

Aggregate Sq. Footage means, for the purpose of § 1115, the net rentable area.

Applicant - for real property tax abatement purposes, is the landlord or the tenant, whichever qualifies as making the improvements for a QHTC and is liable for the tax.

Benefit period - for real property tax abatement purposes, is the period commencing on the first day of the month immediately following the rent commencement date and terminating no later than 60 months thereafter.

Billing assessed value - for real property tax abatement purposes, means the lesser of the taxable transitional assessed value or the taxable actual assessed value of the eligible building and the land on which the eligible building is located for the fiscal year in which the benefit period commences.

Eligible building - for real property tax abatement purposes, means a non-residential or mixed- use building in which:

(a) At least 50% of its tenants are QHTC; or

(b) At least 50% of its aggregate square footage is leased to a QHTC using the premises as an office or retail space.

Eligible premises - for real property tax abatement purposes, means premises located in an eligible building which are occupied and used as an office (including ancillary uses) or retail space by a QHTC under a lease.

Gross revenue - has the same meaning as "Gross Income" as defined in IRC § 61.

High Technology Activities means:

(a) Internet-related services and sales, including website design, maintenance, hosting, or operation; Internet-related training, consulting, advertising, or promotion services; the development, rental, lease, or sale of Internet-related applications, connectivity, or digital content; or products and services that may be considered e-commerce;

(b) Information and communication technologies, equipment and systems that involve advanced computer software and hardware, data processing, visualization technologies, or human interface technologies, whether deployed on the Internet or other electronic or digital media. Such technologies, whether deployed on the Internet or other electronic or digital media, shall include operating and application software; Internet-related services, including design, strategic planning, deployment, and management services and artificial intelligence; computer modeling and simulation; high-level software languages; neural networks; processor architecture; animation and full-motion video; graphics hardware and software; speech and optical character recognition; high volume information storage and retrieval; data compression; and multiplexing, digital signal processing, and spectrum technologies;

(c) Advanced materials and processing technologies that involve the development, modification, or improvement of one or more materials or methods to produce devices and structures with improved performance characteristics or special functional attributes, or to activate, speed up, or otherwise alter chemical, biochemical, or medical processes. Such materials and technologies shall include metal alloys; metal matrix and ceramic composites; advanced polymers; thin films; membranes; superconductors; electronic and photonic reduction; pharmaceuticals; and waste processing technologies;

(d) Engineering, production, biotechnology and defense technologies that involve

knowledge-based control systems and architectures; advanced fabrication and design processes, equipment, and tools; or propulsion, navigation, guidance, nautical, aeronautical and astronautical ground and airborne systems, instruments, and equipment. Such technologies shall include: computer-aided design and engineering; computer- integrated manufacturing; robotics and automated equipment integrated circuit fabrication and test equipment; sensors; biosensors; signal and image processing; medical and scientific instruments; precision machining and forming; biological and genetic research equipment; environmental analysis, remediation, control, and prevention equipment; defense command and control equipment; avionics and controls; guided missile and space vehicle propulsion units; military aircraft; space vehicles; and surveillance, tracking, and defense warning systems; or

(e) Electronic and photonic devices and components for use in producing electronic, optoelectronic, mechanical equipment and products of electronic distribution with interactive media content. Such technologies shall include microprocessors; logic chips; memory chips; lasers; printed circuit board technology; electroluminescent, liquid crystal, plasma, and vacuum fluorescent displays; optical fibers; magnetic and optical information storage; optical instruments, lenses, filters; simplex and duplex data bases; and solar cells.

High Technology Development Zones - the geographic areas described in the priority development areas listed in D.C. Official Code § 2-1219.20. These priority development areas and any other areas designated as "High Technology Development Zones" are outlined in the latest available map drafted by and available in the Mayor's office. The following are priority development areas as provided by D.C. Official Code § 2-1219.20.

(a) The Downtown East Area which shall consist of land within the boundary descriptions beginning at the intersection of Pennsylvania Avenue, NW, and New Jersey Avenue, NW, north to Massachusetts Avenue, NW, west on Massachusetts Avenue, NW, to 15th Street, NW; south on 15th Street, NW, to Pennsylvania Avenue, NW, and east on Pennsylvania Avenue, NW, to New Jersey Avenue NW;

(b) The Capital City Business and Industrial Area which shall consist of land within the boundary descriptions beginning at the intersection of New York Avenue, NE, and 9th Street, NE, to Montana Avenue, NE, north on Montana Avenue, NE, to W Street, NE, west on W Street, NE, to 13th Street, NE, northwest on 13th Street, NE, to Brentwood Road, NE, southwest on Brentwood Road, NE, to 9th Street, NE; and south on 9th Street, NE, to New York Avenue, NE;

(c) The Capital City Market Area which shall consist of land within the boundary descriptions beginning at the intersection of Florida Avenue, NE, and North Capitol Street; southeast on Florida Avenue, NE, to 12th Street, NE, south on 12th Street, NE, to H Street, N.E., west on H street, NE, to 9th Street, NE, and north on 9th Street, NE, to Florida Avenue, N.E.;

(d) Any area designated as Development Zone Areas pursuant to Chapter 14 of Title 5, including, but not limited to, Alabama Avenue, D.C. Village, and Anacostia;

(e) Any housing opportunity area, development opportunity area, or new or upgraded commercial center designated on the District of Columbia Generalized Land Use Policies Map that is part of the Comprehensive Plan;

(f) The Transit Impact Area which shall consist of any area located within 1500 feet of a Metrorail station in any of the areas set forth in paragraphs (1) through (12) of this subsection, or within 1500 feet of a Metrorail station at a designated Metrorail Station Development Opportunity Area, as defined in the District Elements of the Comprehensive Plan of the District of Columbia; and

(g) The Minnesota Avenue area which shall consist of land within the boundary descriptions beginning from East Capitol Street, NE, to Nannie Helen Burroughs Avenue, NE, the Dix Street area which shall consist of land within the boundary descriptions beginning from 58th Street, NE, to Eastern Avenue, NE, the Nannie Helen Burroughs area which shall consist of land within the boundary descriptions beginning from Eastern Avenue, NE, to 49th Street, NE, the Pennsylvania Avenue area which shall consist of land within the boundary descriptions beginning from Branch Avenue, SE, to Carpenter Street, SE, the Benning Road area which shall consist of land within the boundary descriptions beginning from East Capitol Street, SE, to 44th Street, N.E., from Hanna Place, SE, to Hillside Road, SE, and from 39th Street, SE, to 36th Street, SE, and the Division Avenue area from Eads Street, NE, to Hayes Street, NE.

Key employee - a qualified employee who:

(a) Is a member of the board of directors of the QHTC;

(b) Directly or indirectly owns a majority of its stock; or

(c) Is related to a member of the board of directors or a majority stockholder as a spouse or a relative listed in the definition of "dependent" in IRC § 152, without regards to source of income.

Landlord - for real property tax abatement purposes, means a person who controls all non-residential portions of an eligible building, including the record owner, the lessee under a ground lease, any mortgagee in possession, or any receiver, and grants the right to occupy and use eligible premises as a tenant; provided, that the landlord shall not include a lessee who, at any time during the lease term, has occupied and used any part of the non-residential portion of the eligible building, other than premises occupied and used by the lessee to provide rental management services to the building.

Mixed-use building - for real property tax abatement purposes, means a building used for both residential and non-residential purposes.

Qualified asset - qualified stock, qualified partnership interest, or qualified business property. A qualified asset shall include property that was a qualified asset in the hands of a prior holder.

Qualified business property - pertains to tangible personal property, real property, and improvements as follows:

(a) Tangible personal property, as defined in IRC § 179(d)(2) purchased by the taxpayer after December 31, 2000, where the original use of the property commences with the taxpayer, and at least 80% or more of the use of the property was in a QHTC; or

(b) Real property which is substantially improved by the taxpayer during any 24-month period beginning after December 31, 2000, if:

(1) Additions to basis with respect to the property in the hands of the taxpayer exceed the greater of:

(A) an amount equal to the adjusted basis of the property at the beginning of the 24-month period in the hands of the taxpayer, or

(B) five thousand dollars ($5,000).

(2) At least fifty one percent (51%) of the cost of the additions to basis represents improvements, which facilitate the conduct of a QHTC on the premises; and

(3) The improvements are completed before January 1, 2003.

The following are examples of the application of the definition of Qualified Business Property:

(1) Company B, a QHTC on January 1, 2001, purchased $10,000 of computer equipment to be used by Company B for developing software. Company B located its base of operation in an abandoned five-story warehouse purchased on January 1, 2001, for $25,000.00. Over a twenty-four month period, Company B completely renovated the building and repaved the parking area at a cost of $100,000.00. Company B used two floors for an electronic equipment facility. The balance of the building and parking area are used by Company B to conduct qualifying high technology activities. The computer equipment, building and parking lot are qualified business property. The abandoned warehouse is substantially improved since the cost of the improvements of $100,000 exceeds the greater of:

(a) The adjusted basis of the abandoned property which was $25,000; or

(b) $5,000, and more than 51% of the additional improvements facilitate the conduct of a QHTC. Therefore, the requirements of § 1199 are met.

(2) Assume the same facts as in Example 1, except that Company B leases four floors and 80% of the parking area to a separate QHTC. The building is still substantially improved and is qualified business property since at least 51% of the additional improvements facilitate the conduct of a QHTC. Company B is not required to use the real property to meet the requirements of § 1199, since the Code only requires that the real property be used by a QHTC.

(3) Assume the same facts as in Example 1, except that Company B leases four floors and 80% of the parking area to a company that is not a QHTC. Since 51% of the substantially improved building does not facilitate the conduct of a QHTC, the improvements do not meet the requirements of § 1199.

Qualified capital gain - gain recognized on the sale or exchange of a capital asset as defined in D.C. Official Code § 47-1801.04(10)(A). The term "qualified capital gain" shall not include gain, which is:

(a) Treated as ordinary income under IRC §§ 1245 or 1250 if IRC § 1250 applied to all depreciation rather than additional depreciation;

(b) Attributable to real property or an intangible asset which is not an integral part of a QHTC's business operations in the District; or

(c) Attributable, directly or indirectly, in whole or in part, to a transaction with a related person.

Qualified disadvantaged employee - a District resident who:

(a) Is a recipient of Temporary Assistance for Needy Families (TANF);

(b) Was a recipient of TANF in the period immediately preceding employment;

(c) Was released from incarceration within twenty four (24) months before the date of employment by a QHTC; or

(d) Is an employee hired, or relocated to the District, after December 31, 2000, and for which a QHTC also is eligible to claim the Welfare to Work Tax Credit or the Work Opportunity Tax Credit under the IRC § 51.

(e) The term "qualified disadvantaged employee" shall not mean or include:

(1) An employee who was employed as the result of:

(i) The displacement of another employee;

(ii) A strike or lockout;

(iii) A layoff in which other employees are awaiting recall; or

(iv) A reduction of the regular wages, benefits, or rights of other employees in similar jobs,

Qualified employee - a person who is employed in the District by a QHTC in any of the activities described in D.C. Official Code § 47-1817.1(4).

Qualified High Technology Company - an individual or entity organized for profit that:

(a) Maintains an office, headquarters, or base of operations in the District of Columbia;

(b) Has 2 or more employees;

(c) Derives at least 51% of its gross revenue from one or more of the activities listed in D.C. Official Code § 47-1817.1(5)(A)(iii);

(d) Does not receive 51% or more of its gross revenue from operating a retail store or electronic equipment facility, as defined in D.C. Official Code § 47-1817.1(5)(B)(ii), in the District; and

(e) Is appropriately registered as a business with a District agency that requires registration, such as DCRA and Office of Tax and Revenue, and is current in all District filing requirements and payment obligations.

The following are examples of the application of the definition of a QHTC:

(1) Company A, a calendar year taxpayer, was incorporated in the District in year one. Company A is organized for profit and maintains its base of operation in the District. Company A has 10 employees. Company A's gross revenue is $100,000 of which $60,000 is derived from qualifying high technology activities, as specified in D.C. Official Code § 47-1817.1(5)(A)(iii). Company A does not operate a retail store or electronic equipment facility. Therefore, Company A qualifies as a QHTC within the meaning of § 1199. Company A must attach to its applicable tax returns an original affidavit certifying that it is a QHTC.

(2) Assume the same facts as in example 1, except that Company A is a local retailer of computers and software whose base of operation is exclusively in the District. Company A's gross revenue is $1 million. Company A also is engaged in a permitted activity, which generates $100,000 of gross revenue. Since 51% of Company A's gross revenue is not from a permitted activity, Company A does not meet the § 1199 gross revenue test and is not a QHTC.

Qualified partnership interest - a capital or profits interest in a partnership, formed under the laws of the District of Columbia or any state of the United States of America, which is originally issued after December 31, 2000, if:

(a) The interest is acquired by the taxpayer from the partnership solely in exchange for cash;

(b) On the date of acquisition, the partnership is a QHTC (or, in the case of a new partnership, the partnership is organized for purposes which qualify it as a QHTC); and

(c) During 80% or more of the taxpayer's holding period of the interest, the partnership qualifies as a QHTC.

Qualified Property - any tangible personal property, as defined in D.C. Official Code § 47-1521(4).

Qualified stock - stock in a corporation, formed under the laws of the District of Columbia or any state of the United States of America, which is originally issued after December 31, 2000, if:

(a) The stock is originally issued to the taxpayer, directly or through an underwriter, solely in exchange for cash;

(b) On the date of issuance, the corporation is a QHTC (or, in the case of a new corporation, the corporation is being organized for purposes which qualify it as a QHTC); and

(c) During 80% or more of the taxpayer's holding period for the stock, the corporation qualifies as a QHTC.

Relocation costs - amounts paid to, or on behalf of, a qualified employee for reimbursement of:

(a) Moving expenses as defined in IRC § 217(b)(1); or

(b) Financial assistance in the purchasing of a residence, or in procuring a one-year lease for a residence.

Rent Commencement Date - First day of the first tax year following the tax year in which the Certificate of Occupancy is issued.

Taxable Transitional Assessed Value - the value in the base year preceding the first year that the benefits under D.C. Official Code § 47-811.03 commence, excluding any supplemental assessments assessed in that year. It should be noted that the assessed value may change in a half-year levy that precedes the first year of the abatement under D.C. Official Code § 47-811.3 in the event that the timing of the increase in the value of the building or renovations is picked up in the Taxable Transitional Year.

Taxable year - the calendar year, or the fiscal year ending during such calendar year, upon the basis of which the taxable income is computed pursuant to D.C. Official Code § 47-1800. "Taxable year" means, in the case of a return made for a fractional part of a year pursuant to D.C. Official Code § 47-1800 or under the regulations prescribed by the Mayor, the period for which such return is made.

Tenant - for real property tax abatement purposes, is a QHTC that executes a lease under which it occupies and uses eligible premises. The term tenant shall include a subtenant if the subtenant is a QHTC.

1199.2 For purposes of D.C. Official Code § 47-1817.01(5)(A), the following terms and phrases shall have the meaning ascribed:

“Deriving at least 51% of its gross revenues earned in the District” shall require the taxpayer to receive its gross revenues as payment for directly performing or producing one or more of the QHTC services or products enumerated in D.C. Official Code § 47-1817.01(5)(A)(iii), not from mere use of technology in its business.

“Having 2 or more qualified employees in the District” shall require that the qualified employees spend the majority of their time working in an office owned or leased by the taxpayer in the District of Columbia and directly engaging in one or more of the activities enumerated in D.C. Official Code § 47-1817.01(5)(A)(iii).

“Leasing an office in the District of Columbia” shall require a written contract conveying real property for a specified term and for a specified rent where the lessee has continuous use of the premises during business and non-business hours. “Leasing an office in the District of Columbia” shall not include maintaining a virtual office, contracting for use of a co-working office space or a licensing arrangement. A lease must be maintained for the entirety of the period for which QHTC status is sought.

“Office” shall mean a building, room, or series of rooms in which the affairs of the taxpayer are carried on, but will not include warehouses, garages, studios, trailers, temporary structures, outdoor space, equipment storage facilities, equipment rooms, home offices, or other similar locations.

“Owning an office in the District of Columbia” shall require the taxpayer to own real property in fee simple for the entirety of the tax year for which QHTC status is sought.

History

• SOURCE: Final Rulemaking published at 49 DCR 2142 (March 8, 2002); as amended by Final Rulemaking published at 67 DCR 4733 (May 1, 2020). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 1199

9-20 REAL PROPERTY TAX APPEALS COMMISSION

9 DCMR § 2000 GENERAL PROVISIONS

2000.1 The provisions of this chapter establish rules of organization and procedure for the Real Property Tax Appeals Commission for the District of Columbia (“Commission”), in accordance with the provisions of D.C. Official Code § 47-825.01a(b)(2) (2012 Supp.).

History

• SOURCE: Final Rulemaking published at 45 DCR 24 (January 2, 1998); as amended by Final Rulemaking published at 60 DCR 9888 (July 5, 2013).

9 DCMR § 2001 MEETINGS AND QUORUM

2001.1 The Commission shall meet at least four (4) times annually for administrative matters.

2001.2 The Commission shall also meet:

(a) As necessary to conduct its business.

(b) As necessary after any special assessment that shall be generally applicable to a class of real property.

(c) In accordance with law to hear appeals regarding supplemental assessments made pursuant to D.C. Official Code § 47-829 (2012 Supp.).

2001.3 The Commission may be convened at any other time by the call of the Chairperson; provided, the Chairperson shall provide at least three (3) days’ notice to the Commissioners unless emergency circumstances necessitate a shorter notice.

2001.4 Meetings of the Commission shall be held at times agreed upon by its members or as directed by the Chairperson.

2001.5 The Commission shall publish notices of its meetings in the District of Columbia Register and on the Commission’s website as early as possible before the meeting is scheduled to be held.

2001.6 A majority of the Commission shall constitute a quorum for the transaction of all Commission business.

2001.7 The Chairperson shall preside over each Commission meeting; provided, the Vice Chairperson shall, in the absence of or recusal of the Chairperson, preside over the Commission meeting.

2001.8 All meetings of the Commission shall be open to the public.

2001.9 Minutes shall be kept of each Commission meeting. The minutes shall record each action taken by the Commission, the names of those present and voting, and any other matter that the Chairperson may determine to be appropriate.

2001.10 Within a reasonable time after each Commission meeting, the minutes shall be posted on the website of the Commission and shall be made available to the public at the office of the Commission during normal business hours.

History

• SOURCE: Final Rulemaking published at 45 DCR 24, 26 (January 2, 1998); as amended by Final Rulemaking published at 60 DCR 9888 (July 5, 2013).

9 DCMR § 2002 MEMBERS AND STAFF

2002.1 All new Commissioners shall receive training in the various aspects of property valuation for all classes of property and orientation on the Commission’s rules and regulations.

2002.2 The Commission staff shall:

(a) Maintain the calendar for the Commission and each Panel of the Commission;

(b) Maintain a separate hearing file for each appeal coming before the Commission. Each file shall include:

(1) All correspondence pertinent to the appeal;

(2) Documents filed in the appeal, including exhibits;

(3) Notices of the Commission or Panel, including hearing notices; and

(4) Written determinations and decisions of the Commission or Panel; and

(c) Perform such other duties as the Chairperson may require.

History

• SOURCE: Final Rulemaking published at 45 DCR 24, 27 (January 2, 1998); as amended by Final Rulemaking published at 49 DCR 2897 (March 29, 2002); as amended by Final Rulemaking published at 60 DCR 9888 (July 5, 2013).

9 DCMR § 2003 PANEL ASSIGNMENTS, MEETINGS, AND DECISIONS

2003.1 Each appeal to the Commission shall be reviewed by a Panel of the Commission.

2003.2 Subject to the restrictions in this section and in § 2004, the Chairperson shall make all panel assignments.

2003.3 The Chairperson shall endeavor to create Panels with balanced expertise for the review and determination of appeals.

2003.4 Except as provided in § 2003.5 and § 2003.6, each Panel shall consist of three (3) Commissioners.

2003.5 A Panel may consist of two (2) Commissioners if the appellant and the Office of Tax and Revenue (OTR) agree to have the appeal heard before such a Panel.

2003.6 In the case of a single-family residential property or a noncommercial property assessed during the administrative review at three million dollars ($3,000,000) or less (or under the notice of assessment if the administrative review is unavailable), the Chairperson shall appoint one (1) Commissioner, provided, that the Chairperson may at his or her discretion appoint a three (3) Commissioner Panel to hear such cases.

2003.7 No three (3) Commissioners shall serve exclusively together on the same panel for more than one (1) tax year.

2003.8 Each panel shall select a Panel Chairperson from among the members of that panel.

2003.9 Each Panel Chairperson shall preside over the Panel to which he or she is assigned.

2003.10 Decisions of a Panel shall be made by a majority of the members of the Panel; provided, a stipulation signed by OTR and the owner that resolves a matter may be approved by the signature of one (1) Commissioner. If a two (2)-member Panel is unable to reach a unanimous decision, the Chairperson shall reschedule the appeal before a three (3)-member Panel.

2003.11 Notwithstanding the requirements of this section, a stipulation signed by the OTR representative and the owner that resolves a matter may be approved by the signature of one (1) Commissioner appointed by the Chairperson to handle such matters.

History

• SOURCE: Final Rulemaking published at 45 DCR 24, 27 (January 2, 1998); as amended by Final Rulemaking published at 49 DCR 2897 (March 29, 2002); as amended by Final Rulemaking published at 60 DCR 9888 (July 5, 2013).

9 DCMR § 2004 PROHIBITIONS ON COMMISSIONERS

2004.1 A Commissioner shall not review an appeal involving real property with which he or she has had any direct or indirect financial dealings in the two (2)-year period prior to the date of the filing date of the appeal, including the assessment, appraisal, purchase, sale, or rental of the property in question. In addition, a Commissioner shall not review an appeal for which the Commissioner has a direct or indirect interest.

2004.2 A Commissioner shall recuse himself or herself from participating in any hearing, discussion, vote, or appeal referred to in § 2004.1.

2004.3 The Chairperson may appoint a Commissioner to substitute for a member of a Panel who has recused himself or herself pursuant to § 2004.2.

2004.4 If an assertion is made that a member should recuse himself or herself as provided in § 2004.2 and the member refuses to do so, a majority of the other Panel members shall decide whether to remove the member from the hearing, discussion, vote, or appeal. If the Panel consists of two (2) members, or if the other Panel members of a three (3) member Panel are unable to reach a unanimous decision on the recusal, the Chairperson shall decide whether to remove the member from the hearing, discussion, vote, or appeal.

2004.5 A Commissioner shall not represent a client or business interest before the Commission for a period of two (2) years after that Commissioner’s termination or resignation from the Commission.

History

• SOURCE: Final Rulemaking published at 45 DCR 24, 28 (January 2, 1998); as amended by Final Rulemaking published at 49 DCR 2897 (March 29, 2002); as amended by Final Rulemaking published at 60 DCR 9888 (July 5, 2013).

9 DCMR § 2005 FILING OF A PETITION

2005.1 An owner within the definition of “owner” contained in D.C. Official Code § 47-802(5) (2012 Supp.), and hereinafter referred to as “petitioner,” may appeal a proposed assessment, supplemental assessment, or classification for the upcoming tax year, or a decision on homestead, senior benefit eligibility, or any other determination on a matter under the jurisdiction of the Commission by filing a petition with the Commission in accordance with applicable law and this chapter.

2005.2 Except in the case of supplemental assessments (§ 2017.11 of this chapter) or as otherwise provided by law, all appeals of Notices of Final Determination issued by OTR or the Department of Consumer and Regulatory Affairs (DCRA) must be filed no later than forty-five (45) days after the date of the Notice.

2005.3 In any case in which an appeal involves a multiple-lot property, a separate petition shall be filed for each lot.

2005.4 The Commission may combine hearings on multiple petitions.

2005.5 A petition shall be filed by hand delivery or mailing by first class mail of an original petition with four (4) photocopies of the original to the Commission at 441 Fourth Street, N.W., Room 360N, Washington, DC 20001. A postmark, affixed by the United States Postal Service, shall be deemed the date on which the petition was filed.

2005.6 Each petition shall be on a form prescribed by the Commission and shall contain all of the information requested. At a minimum, the petition form shall require the following information:

(a) The property owner’s name, address, and telephone number;

(b) If the petitioner is not the owner, the petitioner's name, address, and telephone number;

(c) The basis on which the petitioner qualifies to file the petition (for example: owner, person legally or contractually obligated to pay the taxes, or duly authorized representative); if petitioner is an agent, or an attorney, filing a petition on behalf of an owner, the petitioner must file a notarized agent authorization form, made available by the Commission, with the petition.

(d) An accurate identification of the property in question by its legal description (square and lot number);

(e) A statement of the basis for the appeal and supporting documentation; and

(f) The petitioner’s estimated market value of the property in question, as estimated market value is defined in D.C. Official Code § 47-802(4) (2012 Supp.), together with a statement of the basis for that estimate.

2005.7 The petitioner shall file with the petition all information and evidence in support of his or her petition which exists at the time the petition is filed, including OTR’s final decision and response given to the petitioner.

2005.8 If the property in question has been improved within two (2) years before the assessment date by new construction, remodeling, or rehabilitation, the petitioner shall submit a complete and detailed schedule of the actual costs of the improvement(s) with the petition.

2005.9 If the property is rented, the petitioner shall submit with the petition a schedule of income and expenses for each of the two (2) most recent calendar or fiscal years certified by the property manager or owner as being true and correct to the best of his or her knowledge and belief.

2005.10 The petition shall be certified by the petitioner as being true and correct to the best of the petitioner’s knowledge and belief.

History

• SOURCE: Final Rulemaking published at 45 DCR 24, 29 (January 2, 1998); as amended by Final Rulemaking published at 60 DCR 9888 (July 5, 2013).

9 DCMR § 2006 SUPPLEMENTAL ASSESSMENTS

2006.1 Any owner aggrieved by a final determination made on an administrative review may appeal the supplemental assessment to the Real Property Tax Appeals Commission for the District of Columbia within forty-five (45) days from the date of a notice of a final determination on an administrative review. The Real Property Tax Appeals Commission for the District of Columbia shall hear an appeal of the supplemental assessment only if a request for an administrative review was timely filed with the Mayor. All notices of final determination shall be accompanied by assessor's worksheets indicating the rationale for the determination, if the assessment is raised or lowered.

2006.2 No administrative review shall be required before an owner may appeal to the Real Property Tax Appeals Commission for the District of Columbia a supplemental assessment conducted between January 1 and June 30 if:

(a) The Mayor fails to notify the owner of the supplemental assessment on or before September 1; or

(b) The Mayor fails to notify the owner of a final determination on an administrative review of the supplemental assessment on or before December 30 following the date of the notice of supplemental assessment.

2006.3 Under the circumstance described in Subsection 2006.2, the owner may appeal the supplemental assessment to the Real Property Tax Appeals Commission for the District of Columbia on or before February 1 without first petitioning for an administrative review of the supplemental assessment.

2006.4 No administrative review shall be required before an owner may appeal to the Real Property Tax Appeals Commission for the District of Columbia a supplemental assessment conducted between July 1 and December 31 if:

(a) The Mayor fails to provide notice of the supplemental assessment on or before March 1; or

(b) The Mayor fails to notify the owner of a final determination on an administrative review of the supplemental assessment on or before June 30.

2006.5 Under the circumstances described in Subsection 2006.4, the owner may appeal the supplemental assessment to the Real Property Tax Appeals Commission for the District of Columbia on or before August 1 without first petitioning for an administrative review of the supplemental assessment.

2006.6 A written notice of each decision, along with the decision itself, shall be sent to each party by first class mail or electronic mail within five (5) business days after the decision is issued.

2006.7 The notice of the decision shall include the following text:

“The petitioner has the right to appeal an adverse decision of the Commission to the Tax Division of the Superior Court of the District of Columbia. Payment of all real property taxes, together with interest and penalties (if applicable), before the filing of a petition in the Tax Division of the Superior Court, is a jurisdictional prerequisite to the appeal.”

2006.8 Every decision of the Commission shall be maintained by the Commission for three (3) years and shall be made available for public examination and photocopying at the expense of the requester, subject to the confidentiality provisions of D.C. Official Code § 47-821(d)(2)(A) and (B) (2012 Supp.).

2006.9 Each decision of the Commission shall also be placed on the website of the Commission, subject to redactions based on the confidentiality provisions of D.C. Official Code § 47-821(d)(2)(A) and (B) (2012 Supp.).

History

• SOURCE: Final Rulemaking published at 45 DCR 24, 29 (January 2, 1998); as amended by Final Rulemaking published at 60 DCR 9888 (July 5, 2013).

9 DCMR § 2007 ASSIGNMENT OF PETITION; SCHEDULING OF HEARING

2007.1 An incomplete or improperly filed petition shall be returned to the petitioner with an explanation of the reason for its return.

2007.2 Each complete and properly filed petition shall be assigned to a Panel.

2007.3 After assignment of a petition to a Panel, the Commission Chairperson shall schedule a hearing date.

History

• SOURCE: Final Rulemaking published at 45 DCR 24, 30 (January 2, 1998); as amended by Final Rulemaking published at 60 DCR 9888 (July 5, 2013).

9 DCMR § 2008 SUPPLEMENTAL PETITION

2008.1 An original petition may be augmented by a supplemental filing with OTR and the Commission if the supplemental filing is filed no later than twenty (20) days after the filing of the appeal, and if it is based on new information which was not available prior to the filing deadline for the original petition.

History

• SOURCE: Final Rulemaking published at 45 DCR 24, 31 (January 2, 1998); as amended by Final Rulemaking published at 60 DCR 9888 (July 5, 2013).

9 DCMR § 2009 NOTIFICATION TO OTR; OTR’S RESPONSE

2009.1 At least thirty (30) days before a scheduled (or rescheduled) hearing, the Commission shall provide OTR by hand or electronic delivery a copy of the petition (and/or supplemental petition) together with all attached documents relating to the appeal and the hearing notice.

2009.2 Except as provided in § 2009.4, OTR shall file a response to the petition with the Commission at least seven (7) days before the scheduled hearing or at least ten (10) days before the scheduled hearing in a case involving single-family residential property.

2009.3 In a case involving a single-family residential property, OTR shall send the response electronically or by postal mail to the petitioner at least ten (10) days before the hearing. In other cases, OTR shall make the response available to the petitioner for inspection and copying at least seven (7) days before the hearing.

2009.4 OTR need not respond to the petition if its worksheet was mailed to the petitioner with the Notice of Final Determination (“Notice”) and if the Notice affirmed the proposed assessment. In such cases, the worksheet shall be deemed the response of OTR and the response shall not be required to be filed by OTR with the Commission before the hearing.

2009.5 If the proposed assessment is amended by OTR, the amended assessment must be filed with the Commission by the time set forth in § 2009.2 and must be sent or made available to the petitioner in the same manner and in the same time frame as set forth in § 2009.3.

2009.6 Appeals of Notices of Final Determination by the Department of Consumer and Regulatory Affairs (DCRA) issued pursuant to D.C. Official Code §§ 42-3131.15 (2012 Supp.) or a Notice of Final Determination by DCRA issued under D.C. Official Code § 47-813(d-1)(4)(A) (2012 Supp.) shall be made in accordance with applicable law with DCRA as the responsible agency, and any supplemental filing shall be provided to the Commission and to DCRA. A response from DCRA shall be available for inspection at least seven (7) days before the scheduled hearing, and DCRA shall have the authority to make any redeterminations of vacancy and blight and any reclassifications that may be necessary to correct a substantial error that would cause an injustice to the owner for the immediately succeeding, current, or preceding three (3) tax years. Any amended response by DCRA must comply with the time schedule specified in this paragraph.

2009.7 The Commission shall render a decision on DCRA appeals within one hundred twenty (120) days of the filing of a petition challenging a final determination.

History

• SOURCE: Final Rulemaking published at 45 DCR 24, 31 (January 2, 1998); as amended by Final Rulemaking published at 60 DCR 9888 (July 5, 2013).

9 DCMR § 2010 REBUTTAL

2010.1 A petitioner may submit a rebuttal to any new evidence submitted by OTR in its response to the appeal (and any supplement thereto) that was not previously raised during the administrative review, and the Panel may request additional information it considers necessary, so long as the rebuttal is submitted in writing to OTR and to the Commission at least three (3) business days before the scheduled hearing. OTR may submit a response to the petitioner’s rebuttal at the hearing.

2010.2 Notwithstanding the requirements in § 2010.1, the Commission may, upon a showing of good cause by the Petitioner as to why the requirements of § 2010.1 could not be met, allow rebuttal evidence to be submitted and may allow the record to remain open for a specified period of time to allow a response from OTR.

History

• SOURCE: Final Rulemaking published at 45 DCR 24, 32 (January 2, 1998); as amended by Final Rulemaking published at 60 DCR 9888 (July 5, 2013).

9 DCMR § 2011 HEARING NOTICES

2011.1 An owner may supplement the original filing if new information has become available that was not available prior to the filing deadline by delivering a copy of the supplemental filing to the Commission and OTR no later than twenty (20) days after the filing of the appeal; provided, that a hearing shall not occur within twenty (20) days from the date of the delivery of the supplemental filing.

2011.2 If the limitations on the time for the Commission to conduct hearings do not permit the thirty (30)-day advance notification provided in § 2009.1, then the petitioner and OTR may be notified electronically, by telephone or by personal service. Under these circumstances a memorandum shall be placed in the file for the petition in question stating the method of notification and to whom and by whom the notification was given.

2011.3 Each notice of a hearing shall state the date, time, and place of the hearing and shall be sent by first class mail, electronic mail or hand delivery to the petitioner’s address as shown on the petition and to OTR at 1101 4th Street, S.W., 5th Floor, Washington, DC 20024.

History

• SOURCE: Final Rulemaking published at 45 DCR 24, 32 (January 2, 1998); as amended by Final Rulemaking published at 60 DCR 9888 (July 5, 2013).

9 DCMR § 2012 FAILURE TO APPEAR FOR A HEARING AND CONTINUANCES

2012.1 If the Panel Chairperson ascertains that the petitioner or a representative of OTR is not present for an appeal hearing and that notice was properly served on the petitioner or OTR, as the case may be, then the Commission may proceed with the determination of the appeal, summon the representative of OTR or the petitioner, or reschedule the hearing.

2012.2 If the Panel Chairperson ascertains that the petitioner or the Representative of OTR is not present for an appeal hearing and that notice was not or may not have been properly served on the petitioner or OTR, as the case may be, then the Panel Chairperson shall reschedule the appeal and properly serve notice of the rescheduled hearing on the petitioner and on the OTR.

2012.3 A hearing may be continued to any timely date by the Chairperson or Panel Chairperson at the request of the petitioner or the Deputy Chief Financial Officer upon a showing of good cause.

History

• SOURCE: Final Rulemaking published at 45 DCR 24, 33 (January 2, 1998); as amended by Final Rulemaking published at 60 DCR 9888 (July 5, 2013).

9 DCMR § 2013 BURDEN OF PROOF

2013.1 In an appeal, the proposed assessed value or classification of the subject property shall be presumed to be correct, and the petitioner has the burden of demonstrating that the assessment does not represent the estimated market value of the property or that the challenged classification of the property is erroneous.

History

• SOURCE: Final Rulemaking published at 45 DCR 24, 33 (January 2, 1998); as amended by Final Rulemaking published at 60 DCR 9888 (July 5, 2013).

9 DCMR § 2014 HEARING PROCEDURES

2014.1 All hearings shall be open to the public, except that the Panel Chairperson shall close any hearing or part of a hearing to the public when the evidence to be presented is accorded confidentiality under D.C. Official Code § 47-821(d)(2)(A) and (B) (2012 Supp.), or any other statutory provision.

2014.2 The petitioner may appear at the hearing in person, or represented by a duly authorized officer, employee, agent, or counsel.

2014.3 Statements or representations made by any duly authorized representative of the petitioner shall be binding upon the petitioner.

2014.4 The members of the Panel may question the petitioner, the Deputy Chief Financial Officer, and any witnesses called upon to testify at the hearing and may allow the petitioner and the Deputy Chief Financial Officer to question each other directly.

2014.5 The Panel Chairperson, in his or her discretion, may allow a party to examine witnesses.

2014.6 Evidence which is not ordinarily admissible in court under generally accepted rules of evidence may be received in evidence at the discretion of the Panel Chairperson.

2014.7 The Panel Chairperson may exclude any evidence which he or she deems to be untimely, irrelevant, immaterial, unduly repetitious, or cumulative, and admit any evidence he or she deems to be relevant and probative.

2014.8 Any response by OTR to an appeal which is not made available for inspection and copying by the petitioner at least seven (7) days before the hearing shall be excluded by the Commission at the hearing. Any evidence in cases involving single-family homes which is not sent electronically or mailed to the petitioner by the OTR at least ten (10) days before the hearing shall be excluded by the Commission at the hearing.

2014.9 At the conclusion of the hearing, the Panel Chairperson shall advise the parties that the Panel will weigh the evidence and render a decision within the time limits provided by statute. The Panel may leave the record open to receive additional materials from the parties.

History

• SOURCE: Final Rulemaking published at 45 DCR 24, 34 (January 2, 1998); as amended by Final Rulemaking published at 60 DCR 9888 (July 5, 2013).

9 DCMR § 2015 WITNESSES

2015.1 The Panel Chairperson may compel the attendance of witnesses at a hearing, administer oaths or affirmations, and examine appellants and other witnesses under oath.

2015.2 Notice shall be provided to the petitioner and to OTR of any summons by the Panel Chairperson of a witness related to an appeal.

2015.3 Fees for witnesses summoned by the Commission shall be paid out of funds available to the Commission at the rate allowed in civil actions before the Superior Court of the District of Columbia.

2015.4 The petitioner or OTR’s representative may call witnesses to provide testimony at a hearing, subject to such limitations as may be imposed by the Panel.

2015.5 Fees for witnesses called by the petitioner or OTR’s representative shall be paid by the party calling the witness.

History

• SOURCE: Final Rulemaking published at 45 DCR 24, 35 (January 2, 1998); as amended by Final Rulemaking published at 60 DCR 9888 (July 5, 2013).

9 DCMR § 2016 PROHIBITION ON EX PARTE COMMUNICATION

2016.1 Neither the petitioner nor OTR, nor a representative of either party, shall communicate with any Commissioner concerning a specific appeal except by written communication served on the other party, but Commissioners may communicate with either party regarding routine administrative matters which do not involve material facts in dispute relevant to a specific appeal.

History

• SOURCE: Final Rulemaking published at 45 DCR 24, 36 (January 2, 1998); as amended by Final Rulemaking published at 60 DCR 9888 (July 5, 2013).

9 DCMR § 2017 FIELD STUDIES

2017.1 A Panel may adjourn a hearing until a field study can be completed and resume that hearing at a later date for presentation of the study.

2017.2 The Panel shall give the petitioner and the Deputy Chief Financial Officer reasonable advance notice of any field study resulting from the circumstances described in § 2017.1 so that the petitioner and the OTR representative may observe.

2017.3 A copy of a field study or report prepared at the direction of the Commission shall be mailed or hand delivered to the petitioner and OTR (if the field study was not conducted by OTR) on the same day that it is mailed or hand delivered to the Commission.

History

• SOURCE: Final Rulemaking published at 45 DCR 24, 36 (January 2, 1998); as amended by Final Rulemaking published at 60 DCR 9888 (July 5, 2013).

9 DCMR § 2018 APPEAL DECISIONS AND NOTICES OF DECISIONS

2018.1 Each appeal decision shall be based upon consideration of the entire record described in § 2020 of this chapter or such lesser portion of the record as may be agreed upon by the petitioner and the Deputy Chief Financial Officer, and approved by the Panel.

2018.2 Each valuation decision shall include the Panel’s determination of the estimated market value of the real property for the applicable tax year.

2018.3 The Panel shall raise or lower the proposed assessment of any real property for which a petition has been properly filed that it finds to be more than five percent (5%) above or below the estimated market value of that property, except in the case of plain error. In the case of plain error, the assessment shall be clerically corrected.

2018.4 A Panel shall not order an increase of the assessed value of any parcel of real property above its estimated market value or a decrease of the assessed value of any parcel of real property below its estimated market value solely on the basis of average ratio studies comparing sales and assessments, unless the studies are the primary basis for the assessment or reassessment of the concerned real property in question.

2018.5 A Panel decision shall include an allocation of total assessed value between the improvements, if any, and the land.

2018.6 In arriving at its determination, the Panel shall consider the evidence in light of generally accepted principles of valuation and shall take into consideration principles of equalization of assessments of the same or substantially similar properties.

2018.7 The Panel shall accept any stipulation entered into by the petitioner and OTR which has been forwarded to the Commission and which disposes of an appeal, if the Panel is satisfied that the stipulation was agreed to knowingly and voluntarily by both parties.

2018.8 Every decision by the Panel shall contain a detailed written statement of the basis for the decision.

2018.9 Every decision by a Panel shall be signed by each member who participated in the decision and shall indicate whether each participating member agreed with or dissented from the decision.

2018.10 In the case of an appeal of an annual proposed assessment, a Panel shall render its decision and notify the petitioner and OTR within thirty (30) days in the case of a residential real property appeal and eighty (80) days in the case of a commercial real property appeal.

2018.11 A written notice of each decision, along with the decision itself, shall be sent to each party by first class mail or electronic mail within five (5) business days after the decision is issued.

2018.12 The notice of the decision shall include the following text:

“The petitioner has the right to appeal an adverse decision of the Commission to the Tax Division of the Superior Court of the District of Columbia. Payment of all real property taxes, together with interest and penalties (if applicable), before the filing of a petition in the Tax Division of the Superior Court, is a jurisdictional prerequisite to the appeal.”

2018.13 Every decision of the Commission shall be maintained by the Commission for three (3) years and shall be made available for public examination and photocopying at the expense of the requester, subject to the confidentiality provisions of D.C. Official Code § 47-821(d)(2)(A) and (B) (2012 Supp.).

2018.14 Each decision of the Commission shall also be placed on the website of the Commission, subject to redactions based on the confidentiality provisions of D.C. Official Code § 47-821(d)(2)(A) and (B) (2012 Supp.).

History

• SOURCE: Final Rulemaking published at 45 DCR 24, 36 (January 2, 1998); as amended by Final Rulemaking published at 60 DCR 9888 (July 5, 2013).

9 DCMR § 2019 APPEAL REHEARINGS

2019.1 Within fifteen (15) days after the date on which the Commission transmits the Panel’s decision, the petitioner or OTR, by written notice served on the Chairperson and the opposing party, may request a rehearing.

2019.2 The Commission may, in its discretion, either agree to rehear the appeal or reject the request to rehear the appeal. If a rehearing is granted, the Commission shall mail or email its decision to grant a rehearing and the date of the proposed rehearing to the Office of Tax and Revenue and to the Petitioner(s). The non-requesting part shall have ten (10) days from the date of the rehearing notice to serve its response to the rehearing notice on the Commission and the requesting party.

2019.3 A rehearing shall be granted as a matter of right, upon request, if a decision is based on evidence outside the record.

2019.4 A rehearing shall be granted as a matter of right if the decision of an appeal changes the proposed assessed value of a real property, excluding single-family residential real property, by at least twenty percent (20%) or ten million dollars ($10,000,000), whichever is less.

2019.5 In the case of a rehearing, a three (3)-Commissioner Panel shall be convened, consisting of the Chairperson, the Vice-Chairperson, and a Commissioner who was a member of the Panel that heard the underlying appeal.

2019.6 A rehearing shall not be a hearing de novo but instead shall be considered a continuation of the original hearing before the Commission.

2019.7 No Panel decision shall be changed upon rehearing except upon a finding of plain error. The burden of proof shall be upon the moving party to demonstrate plain error.

History

• SOURCE: Final Rulemaking published at 45 DCR 24, 37 (January 2, 1998); as amended by Final Rulemaking published at 60 DCR 9888 (July 5, 2013).

9 DCMR § 2020 APPEAL HEARING AUDIO RECORDINGS AND TRANSCRIPTS

2020.1 An audio recording shall be kept of all appeal hearings and rehearings.

2020.2 The official record of an appeal shall consist of the audio recording, the testimony, and all documents, schedules, letters, appraisals, maps, charts, lists of comparable properties, exhibits, papers, and other materials filed in the proceeding.

2020.3 At the request of the petitioner or of the OTR, the Commission shall deliver to the requesting party a copy of the audio recording or a written transcript of such audio recording.

2020.4 The cost of preparing a copy of the audio recording or a written transcript of an audio recording or any other part of the official record shall be borne by the requesting party.

2020.5 If a written transcript of a recording is prepared at the request of a party, a copy of the transcript shall be sent to the Commission by the requesting party.

2020.6 Except in accordance with procedures established by the Chairperson, the hearing file shall not be removed from the offices of the Commission for any reason.

History

• SOURCE: Final Rulemaking published at 45 DCR 24, 37 (January 2, 1998); as amended by Final Rulemaking published at 60 DCR 9888 (July 5, 2013).

9 DCMR § 2021 APPEALS OF COMMISSION DECISIONS

2021. 1 Except as provided in D.C. Official Code § 47-830 (2012 Supp.), the petitioner may appeal a decision of the Commission to the Tax Division of the Superior Court of the District of Columbia in the same manner and to the same extent as provided in D.C. Official Code §§ 47-3303 and 47-3304 (2005 Repl.), by September 30 of the tax year except as otherwise provided by law.

History

• SOURCE: Final Rulemaking published at 45 DCR 24, 37 (January 2, 1998); as amended by Final Rulemaking published at 60 DCR 9888 (July 5, 2013).

9 DCMR § 2022 ANNUAL REPORT

2022.1 By October 1 of the next succeeding tax year, the Commission shall present to the Council and the Mayor a report on its operations for the tax year.

2022.2 The report shall include the following:

(a) The total number of appeals decided by the Commission;

(b) A breakdown of appeals decided by class of property as those classes are defined in D.C. Official Code § 47-813 (2012 Supp.), stating the following for each class:

(1) The total number of assessments sustained;

(2) The total number of assessments increased;

(3) The total number of assessments decreased;

(4) The percentage of the increased, decreased, and sustained assessments;

(5) The gain and loss in assessed value;

(6) The revenue gain to the District as a result of the increases by the tax year;

(7) The total revenue loss as a result of the decreases by the tax year; and

(8) The total net revenue impact as a result of the Commission's decisions;

(c) An analysis of the Commission’s operations for the year, including identification of any problems and recommendations for dealing with those problems; and

(d) A listing of the number of hours worked, and the total amount of compensation paid, for each member.

History

• SOURCE: Final Rulemaking published at 60 DCR 9888 (July 5, 2013).

9 DCMR § 2023 COMPUTATION OF TIME

2023.1 When the last day prescribed by these rules for performing any act falls on a Saturday, Sunday, or legal holiday, the performance of the act shall be considered timely if it is performed on the next succeeding day which is not a Saturday, Sunday, or legal holiday.

2023.2 The term “legal holiday” means a legal holiday in the District of Columbia.

History

• SOURCE: Final Rulemaking published at 60 DCR 9888 (July 5, 2013).

9 DCMR § 2099 DEFINITIONS

2099.1 When used in this chapter, the following words and phrases shall have the meaning ascribed to them below:

Commission - the Real Property Tax Appeals Commission for the District of Columbia.

Commissioner - a member of the Commission.

Chairperson – the Commissioner appointed by the Mayor, with the advice and consent of the Council, as the chairperson of the Commission.

Council - the Council of the District of Columbia.

Deputy Chief Financial Officer - the Deputy Chief Financial Officer of the District of Columbia for the Office of Tax and Revenue or the Deputy Chief Financial Officer's duly appointed or authorized agent, designee, or representative.

Field Study – A personal on-site inspection of the physical characteristics of a property, made in conjunction with the decision of a particular case.

Mayor - the Mayor of the District of Columbia or his or her designated agent.

OTR - the District of Columbia’s Office of Tax and Revenue.

Panel - refers to a panel consisting of two (2) or three (3) Commissioners, as provided in this chapter, who are authorized to hear, review, and decide real property assessment appeals as provided under D.C. Official Code § 47-825.01a(c)(1)(A) (2012 Supp.).

Panel Chairperson - the Commissioner chosen by a Panel to preside over a hearing.

Petitioner - the property owner or the individual or entity legally or contractually obligated to pay the real property taxes on the subject property of a petition for the period in question, or the duly authorized agent, designee, or representative of such person or entity.

Square and Lot - the legal description of the property identified by plat on the records of the District of Columbia Surveyor.

Tax year – the period beginning October 1 each year and ending September 30 each succeeding year.

History

• SOURCE: Final Rulemaking published at 45 DCR 24, 25 (January 2, 1998); as amended by Final Rulemaking published at 60 DCR 9888 (July 5, 2013).

9-21 VACANT PROPERTY EXEMPTION APPLICATIONS

9 DCMR § 2100 VACANT PROPERTY EXEMPTION APPLICATIONS

2100.1 A property owner of an unoccupied property seeking to avoid registration as a vacant property by virtue of an exemption listed in Section 6(b)(3)-(9) of An Act To provide for the abatement of nuisances in the District of Columbia by the Commissioners of said District, and for other purposes (D.C. Official Code § 42–3131.06) shall apply for the exemption to the Director of the Department of Consumer and Regulatory Affairs on a form provided by the Director.

History

• SOURCE: Final Rulemaking published at 65 DCR 0384 (January 19, 2018). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 2100

9-30 DISPOSITION OF UNCLAIMED PROPERTY

9 DCMR § 3000 GENERAL PROVISIONS

3000.1 The rules set forth in this chapter are promulgated to implement the provisions of Title I of the "Uniform Disposition of Unclaimed Property Act of 1980", D.C. Law 3-160 (D.C. Code § 42-201 et seq.), as amended (also referred to in this chapter as the "Act").

3000.2 The provisions of this chapter shall be applicable to matters raised with the Deputy Chief Financial Officer of the Office of Tax and Revenue under the Act, except for matters raised under Title II (Lost Property).

3000.3 If there is any conflict between the provisions of this chapter and the provisions of the Act, the provisions of the Act shall govern.

3000.4 In any case where the provisions of this chapter appear to conflict, the specific provision shall govern over the general.

3000.5 If there is a conflict between the holding period specifically applicable to a particular holder or item and a general holding period required to create a presumption of abandonment under the Act, the holding period of the shorter duration shall apply.

3000.6 The Act is custodial in nature, and property subject to the Act and this chapter shall not escheat, but shall be held by the District as conservator.

3000.7 For purposes of this chapter, "Deputy Chief Financial Officer" means the Deputy Chief Financial Officer of the Office of Tax and Revenue ("Office") or the Deputy Chief Financial Officer's duly authorized agent, designee, or representative.

3000.8 The Act, which took effect March 5, 1981, shall be applied as if it had become effective as of January 1, 1980.

History

• AUTHORITY: Unless otherwise noted, the authority for this chapter is Title I of the Uniform Disposition of Unclaimed Property Act of 1980, D.C. Law 3-160, D.C. Code §42-201 et seq (1981 Ed.).
• SOURCE: Final Rulemaking published at 28 DCR 3622 (August 14, 1981); as amended by Final Rulemaking published at 28 DCR 4183 (September 25, 1981).
• EDITOR'S NOTE: The Office of the Chief Financial Officer of the District of Columbia published a Notice of Public Interest at 44 DCR 2345 (April 18, 1997) changing the name of the ''Department of Finance and Revenue" to the "Office of Tax and Revenue."

9 DCMR § 3001 FORMS

3001.1 Each report, claim, or application required by the Act or this chapter shall be made on forms approved by the Deputy Chief Financial Officer of the Office of Tax and Revenue or in a manner prescribed or approved by the Deputy Chief Financial Officer.

3001.2 Approved forms may be obtained from Room 480, 441 4th Street, N.W., Washington, D.C. 20001.

History

• SOURCE: Final Rulemaking published at 28 DCR 3622, 3623 (August 14, 1981).

9 DCMR § 3002 ABANDONMENT OF PROPERTY

3002.1 For the purposes of the Act and this chapter, the term "tangible personal property" shall include everything that is the subject of ownership consisting of movable corporeal articles, except real estate, with a market value of fifty dollars ($50) or more.

3002.2 For the purposes of the Act and this chapter, the term "intangible personal property" shall include the following:

(a) Monies, checks, drafts, deposits, interest, dividends, and income;

(b) Credit balances, customer overpayments, gift certificates, security deposits, refunds, credit memos, unpaid wages, and uncashed airline tickets;

(c) Stocks, bonds, and other intangible interests in business associations;

(d) Monies deposited to redeem stocks, bonds, coupons, and other securities or to make distributions;

(e) Amounts due and payable under the terms of insurance policies;

(f) Unclaimed prizes or contest winnings;

(g) Assets distributable from a trust or custodial fund established under a plan to provide health and welfare, pension, vacation, severance, retirement benefits, death benefits, stock purchase, profit sharing, employee savings, supplemental unemployment insurance benefits, or similar savings; and

(h) All other choses or things in action (property which has no intrinsic or marketable value, but is merely evidence or representative of value) including, but not limited to, other items specifically set forth in the Act or this section.

3002.3 For the purposes of § 106 of the Act (D.C. Code § 42-206) relating to the (ten (10)year) period for presumption of abandonment of bank deposits and funds in financial institutions, those deposits and funds include, but are not limited to, the following:

(a) Checking accounts and savings accounts;

(b) Matured certificates of deposit or saving certificates;

(c) Christmas club accounts;

(d) Security deposits;

(e) Funds paid toward the purchase of shares;

(f) Money on deposit to secure funds;

(g) Unidentified deposits;

(h) Mutual investment certificates;

(i) Certified or registered checks, drafts, and cashier's checks;

(j) Bills of exchange; and

(k) Any other interest in a financial organization.

3002.4 For the purposes of § 112 of the Act (D.C. Code § 42-212), relating to property held by public officers and agencies, unclaimed property shall include, but is not necessarily limited to, escrow funds, condemnation awards, and missing heirs funds.

3002.5 For the purposes of § 107 of the Act (D.C. Code § 42-207), relating to funds held by life insurance corporations and all insurance corporations who pay benefits, unclaimed property shall include, but is not necessarily limited to, the following:

(a) Amounts due and payable under the terms of a policy;

(b) Matured whole life, term, or endowment insurance policies or annuity and supplementary contracts; and

(c) Claim payments.

3002.6 A claim shall be considered payable and therefore reportable by an insurance company when the "offer" of payment has been delivered to the claimant.

3002.7 The burden shall be on the insurance company to show that the "offer" of payment is not reportable due to a reasonable lapse of time which has terminated the offer, or the specific rejection or revocation of the offer.

3002.8 The application of an automatic premium loan provision or other nonforfeiture provision of an insurance policy does not prevent a policy from being matured or terminated if the insured has died or the insured or the beneficiaries of the policy otherwise have become entitled to the proceeds of the policy before the depletion of the cash surrender value of the policy by the application of those provisions.

3002.9 For the purposes of § 109 of the Act (D.C. Code § 42-209), relating to undistributed dividends and distributions of business associations, in addition to items set forth in that section, unclaimed property shall include, but is not necessarily limited to, the following:

(a) Escrow funds; and

(b) Any sum which is owed to a shareholder, certificate holder, member, bond holder, or other security holder or participating member of a cooperative (such as dividends, interest, principal payments, equity payments, profits, or distributions).

3002.10 Holders of abandoned securities, with a marketable value, are required to re-register the abandoned securities in the name of the District of Columbia prior to the delivery date. Delivery shall be pursuant to § 119 of the Act.

3002.11 If the securities have no marketable value, the certificate shall be turned over to the District as custodian of the property pursuant to the provisions of § 119(a) of the Act.

3002.12 The Mayor or the Mayor's designee acting in a fiduciary capacity as conservator of an abandoned security shall be considered the appropriate person to provide the necessary signature needed to negotiate a security.

3002.13 An indorsement of a security shall be made when the Mayor or the Mayor's designee signs on the security or on a separate document as assignment or transfer of the security or a power to assign or transfer it, or the Mayor's (or designee's) signature is written without more upon the back of the security.

History

• SOURCE: Final Rulemaking published at 28 DCR 3622, 3623 (August 14, 1981); as amended by Final Rulemaking 28 DCR 4183 (September 25, 1981); and by Final Rulemaking published at 29 DCR 2200 (May 28, 1982).

9 DCMR § 3003 NOTICE TO OWNERS OF ABANDONED PROPERTY

3003.1 Under the provisions of § 106 of the Act, a holder shall give notice to the owner of an inactive account, where required by the Act or this chapter, notwithstanding any evidence of indirect communication or interest in the account by activity in another account.

3003.2 If the mailing status of an owner of record has fallen into an automatic return mail category based on prior attempts to communicate with the owner, the holder shall make reasonable attempts to ascertain the current address of the owner of record.

3003.3 If a more current mailing address of an owner of record cannot be obtained, and the mailing of an additional notice would prove futile, the sending of an additional notice shall not be required.

History

• SOURCE: Final Rulemaking published at 28 DCR 3622, 3625 (August 14, 1981).

9 DCMR § 3004 REPORTING

3004.1 A holder shall annually file a verified report ("Report of Unclaimed Property Verification and Checklist") even if only to indicate that the holder has no reportable items; unless otherwise notified by the Deputy Chief Financial Officer.

3004.2 The last known address of that apparent owner, as reflected in the records of the holder, shall be determinative of where the report and delivery is to be made. If the owner of record (the apparent owner) transfers his or her interest to another person without notice to the holder, the address of the owner of record controls.

3004.3 With respect to reports of unclaimed property under § 106 of the Act, if determinable, the value of the property shall be reported as of the date of the delivery of the property. The report shall reflect the following:

(a) The amount of interest that has actually accrued as of the date of the report; and

(b) The amount of interest that is estimated will be accrued as of the date of delivery.

3004.4 In general, each report shall contain the information required by § 117 of the Act (D.C. Code § 42-217), and §§ 3004.14 and 3004.15 of this chapter. Reports that do not contain all required information shall be subject to rejection.

3004.5 Insurance companies shall provide the full name of the insured or annuitant and the beneficiary, and the last known address of each.

3004.6 Requests for additional information by the Deputy Chief Financial Officer to the holder shall be in writing and shall state the justification for the request for additional information.

3004.7 If service charges have been deducted, a holder shall include or attach as part of the report the following:

(a) The citation to the authority or copy of the form of contract authorizing the service charge(s);

(b) The value or amount of each item of property before any service charge(s) were deducted; and

(c) The amount of service charge(s) deducted from each item and the date(s) on which the service charge(s) were deducted.

3004.8 If the amount of service charge equals or exceeds the value of an item, this fact shall be reported in accordance with § 3002.9.

3004.9 For the purposes of the Act and this chapter, the term "service charge" includes any deduction by a holder from property presumed abandoned under the Act, including any deductions made by the holder prior to the presumption of abandonment which are made by reason of the inactivity, dormancy, or unclaimed status of the property.

3004.10 Any interest or dividend accrued on property subject to the Act shall be included as part of the value of the property.

3004.11 Banking and financial organizations, insurance companies, and other holders shall be liable for interest or dividends payable on interest-bearing deposits, dividend bearing share accounts, and other interest-bearing policies or accounts until the period of the year the policies or accounts are required to be reported under the Act.

3004.12 If payment of interest or dividends on property presumed abandoned under the Act was discontinued before or after the property was presumed abandoned by reason of the inactivity, dormancy, or unclaimed status of the property, the holder shall include or attach as part of the report filed under the Act, the following:

(a) A copy of the form of contract which authorized the discontinuance of payment of interest or dividends;

(b) The citation to the authority for the discontinuances of payment of interest or dividends.

3004.13 Any holder of unclaimed property may voluntarily report funds before the statutory due dates and be relieved of all responsibility and accountability upon delivery of the unclaimed property.

3004.14 Notwithstanding the provisions of § 3004.2, where the District has a reciprocal agreement with another state pursuant to § 134(c) of the Act, any holder organized or domiciled in the District and in possession of unclaimed property belonging to an apparent owner whose last known address is within the other state shall submit on the form prescribed under §3004.1 such information as the Mayor may require to comply with the terms of the agreement. The provisions of this subsection shall not apply to District holders who report or otherwise provide directly to the other state information relating to unclaimed property described in this subsection.

3004.15 The information required to be submitted by holders in accordance with § 134(c) of the Act and § 3004.14 of this chapter shall be the same information required by § 117 of the Act (D.C. Code § 47-217) and §§ 3004.3 through 3004.13 of this chapter.

3004.16 A list of the names of the states which have reciprocal agreements with the District pursuant to § 134(c) of the Act may be obtained from the Unclaimed Property Section, Office of Tax and Revenue.

History

• SOURCE: Final Rulemaking published at 28 DCR 3622, 3625 (August 14, 1981); as amended by Final Rulemaking published at 31 DCR 656 (February 17, 1984).

9 DCMR § 3005 CONFLICTS BETWEEN CLAIMS OF STATES

3005.1 If there is a dispute between two (2) or more jurisdictions which claim the same abandoned property under §126 of the Act (D.C. Code § 42-226), the provisions of this section shall be determinative.

3005.2 If the owner's address does not appear on the records of the holder, the state of the holder's incorporation may take custody of the property until some other jurisdiction comes forward with proof of a superior right to custody of the property.

3005.3 If the owner's address is known, the state or jurisdiction of the last known address of the owner shall have priority.

3005.4 If the owner's address is in a jurisdiction that does not have an escheat or uniform disposition statute, then the state of the holder's incorporation shall take priority.

3005.5 Each dispute shall be considered within thirty (30) days after it is presented.

History

• SOURCE: Final Rulemaking published at 28 DCR 3622, 3626 (August 14, 1981).

9 DCMR § 3006 RETENTION OF RECORDS

3006.1 Each holder required to file a report under § 117 of the Act shall, with respect to any property for which it has obtained the address of the owner, maintain a record of the name and address of the owner for ten (10) years after the date the property became reportable.

3006.2 Any business association in the District that sells traveler's checks, money orders, or other similar written instruments, other than third party checks, shall maintain a record of the instruments while they remain outstanding. The record shall indicate the state and date of issue for three (3) years after the date the property became reportable.

3006.3 A record may be destroyed after the record has been retained for a reasonable time as designated by the Mayor.

History

• SOURCE: Final Rulemaking published at 28 DCR 4183 (September 25, 1981).

9 DCMR § 3007 SAFE DEPOSIT REPOSITORY

3007.1 The District shall be liable for unpaid rental charges until the point at which the boxes are drilled open. If drilling is pursuant to the Act, the District shall be liable for storage charges from the point of drilling until the property is delivered to the District.

3007.2 The District shall be liable for the cost of drilling undertaken only in compliance with the provisions of § 120 of the Act. Reimbursement shall not be allowed for drilling due to nonpayment of rent or expiration of rental period.

3007.3 The repository shall request the presence of a representative of the Deputy Chief Financial Officer to be present at the drilling.

3007.4 In the presence of a repository representative or a representative of the Deputy Chief Financial Officer the contents of the safe deposit repository shall be inventoried, and an estimated value assigned to the contents.

3007.5 The contents of the opened box shall then be placed in a sealed package, and a statement signed by both representatives attesting to the contents and value shall be attached. The sealed package shall be placed in one of the repository's general safe deposit boxes.

History

• SOURCE: Final Rulemaking published at 28 DCR 4183 (September 25, 1981); as amended by Final Rulemaking published at 29 DCR 2200 (May 28, 1982).

9 DCMR § 3008 RECIPROCITY

3008.1 Proceedings to enforce the unclaimed property laws of a foreign state against a holder domiciled in the District regarding property subject to escheat or a claim of abandonment by the foreign state may be commenced by filing a request with the Corporation Counsel.

3008.2 A request shall be filed in the name of the administrator of the statute in the foreign state.

3008.3 Each request shall be verified and shall state that the foreign state agrees to pay any and all expenses incurred by the Corporation Counsel in bringing the action.

3008.4 Each request shall state the following:

(a) The name of the holder(s);

(b) A description of the property involved;

(c) The basis of the foreign state's claim; and

(d) Any other information which may prove helpful in locating or identifying the holder and the property in question.

3008.5 The decision whether to bring suit shall be within the discretion of the Corporation Counsel.

3008.6 The District may apply its own abandoned property policy or the policy of the foreign state.

History

• SOURCE: Final Rulemaking published at 28 DCR 4183, 4184 (September 25, 1981).

9 DCMR § 3009 COMMUNICATION

3009.1 Any communication with the holder from the owner or individual entitled to the funds shall toll the running of the period of presumption of abandonment.

3009.2 Communications include, but are not limited to, any readjustments, premium payments, assignments, lawsuits, correspondence in writing or by telephone, or any other type of negotiation surrounding a pending claim or dispute.

History

• SOURCE: Final Rulemaking published at 28 DCR 4183, 4185 (September 25, 1981).

9 DCMR § 3010 REIMBURSEMENTS

3010.1 If a claim is made to a holder who has delivered unclaimed property to the Mayor pursuant to § 119(a) of the Act the holder may either:

(a) Pay the claimant upon the filing of satisfactory proof of claim and seek reimbursement from the District;

(b) Refer the claimant to the District; or

(c) Under circumstances where the holder has delivered tangible property, the holder may reclaim the property for the rightful owner or refer the claimant to the District.

History

• SOURCE: Final Rulemaking published at 29 DCR 2200 (May 28, 1982).

9 DCMR § 3011 COLLATERAL

3011.1 The amount of collateral, which must be deposited within fifteen (15) days of a notice of violation of the Act shall be up to but no more than, one-thousand dollars ($1,000) per violation.

History

• SOURCE: Final Rulemaking published at 29 DCR 5015 (November 12, 1982).

9-31 FORECLOSURE SALE OF REAL PROPERTY

9 DCMR § 3100 NOTICE

3100.1 The holder of a note secured by a deed of trust, mortgage, or other security instrument (hereinafter, "holder"), or the agent of any such holder, shall at least thirty (30) days in advance of any sale of the real property encumbered by the deed of trust, mortgage, or security instrument under a power of sale provision contained therein, send to the owner of the real property, by certified mail, return receipt requested, a notice of the foreclosure sale on a form to be provided by the Mayor of the District of Columbia and to be available in the Office of the Recorder of Deeds.

3100.2 The form of the notice of a foreclosure sale of real property shall provide for furnishing at least the following information concerning the sale:

(a) The name and address of the owner of record of the property, and his or her telephone number, if known;

(b) The identification of the property;

(c) The lot and square number or the parcel number of the property;

(d) The liber number and folio number of the volume in the Office of the Recorder of Deeds in which the security instrument is recorded and the date of such recordation;

(e) The name and last known address of the maker of the note secured by the security instrument, and his or her telephone number, if known;

(f) The name and address of the holder of the note and his or her telephone number of person to call if owner wishes to stop foreclosure; and

(g) Provision for a certification by the note holder or his or her agent that the original of the notice has been sent to the property owner by certified mail, return receipt requested, and that the note holder understands that no foreclosure sale may take place until at least thirty (30) days after a copy of the notice has been received by the Recorder of Deeds, D.C.

3100.3 The holder of his or her agent shall, at least thirty (30) days in advance of any such sale, also send to the Recorder of Deeds two (2) copies of the notice of foreclosure sale given to the owner of the real property affected by the sale.

3100.4 The Recorder of Deeds shall, upon receipt of the copies of the notice of foreclosure sale, indicate receipt of the notice on one (1) of the copies and return that copy to the holder or his or her agent. The fee for receiving and filing the notice, and acknowledging its receipt, shall be an amount as may from time to time be fixed by the Mayor.

3100.5 Upon receipt of a copy of a notice of foreclosure sale, the Recorder of Deeds shall, if he or she deems it advisable, make a reasonable effort to ascertain from the owner of the property affected by the sale, or the agent of the owner, whether the owner has knowledge of the intended sale and the existence of the deed of trust, mortgage, or other security instrument containing the power of sale provision under the authority of which the property is to be sold.

3100.6 In the event the Recorder of Deeds determines that the owner of the real property affected by the proposed foreclosure sale has not been informed concerning it, does not know of the existence of the deed or trust, mortgage, or other security instrument under which the foreclosure sale is to take place, or has a defense against the holder which would preclude him or her from forclosing on the property, the Recorder of Deeds shall advise the owner or his or her agent to seek legal assistance to resist the proposed sale.

3100.7 Nothing contained in this chapter shall be deemed to authorize or require the Recorder of Deeds to counsel the owner of real property affected by a proposed foreclosure sale concerning the legal or other action to be taken by him or her, other than to advise the owner to seek legal assistance, if the circumstances of the case indicate such action should be taken by the owner.

3100.8 The Recorder of Deeds is authorized to redelegate any of the functions required by this chapter to be performed.

3100.9 No person shall knowingly include any false information in a notice of a foreclosure sale of real property, nor shall any person falsely certify that the original of any such notice was sent to the owner of the real property affected by the notice.

3100.10 Any person violating § 3100.9 upon conviction shall be punished by a fine of not more than three hundred dollars ($300), or imprisonment of not more that ten (10) days or both.

History

• AUTHORITY: Unless otherwise noted, the authority for this chapter is § 539 of the Act of March 3, 1901, as amended by the Act approved October 12, 1968 (P.L. 90-566), D.C. Code § 45-715 (1981 Ed.).
• SOURCE: Regulation No. 68-25 approved November 1, 1968.

9-35 GROSS RECEIPTS TAX

9 DCMR § 3500 GENERAL PROVISIONS

3500.1 The provisions of this chapter shall govern the filing of affidavits for and the payment of the payment of the gross receipts tax by the following:

(a) Each gas, electric lighting, and telephone company that sells public utility services or commodities within the District of Columbia; and

(b) Each telecommunication company.

3500.2 The tax on gas, electric lighting, and telephone companies shall be at the rate of six and seven-tenths percent (6.7%) of the gross receipts from the sale of public utility services and commodities within the District of Columbia.

3500.3 The tax on telecommunication companies, other than those companies subject to § 3500.2 of this chapter, shall be at the rate of six and seven-tenths percent (6.7%) of the gross receipts from the sale of toll telecommunication services that originate from or terminate on telecommunication equipment located in the District and for which a toll charge or periodic charge is billed to an apparatus, telephone, or account in the District, without regard to where the bill for service is physically received.

3500.4 For the purpose of this section, the term "toll communication service" shall not include data transmission or reception except when the gross receipts from data transmission or reception are not separated from gross receipts subject to the tax under the act.

3500.5 Except as provided in §§ 3501.3 and 3502.2 of this chapter, the gross receipts tax shall be due by the twentieth (20th) day of the month following the calendar month for which the payment is due.

3500.6 Except as provided in §§ 3501.2 and 3502.1 of this chapter, the affidavit shall be filed at the time payment of the tax is made.

History

• AUTHORITY: Unless otherwise noted, the authority for this chapter is §§ 6(5)(E) and 6(10)B of an Act making appropriations to provide for the expenses of the government of the District of Columbia for the fiscal year ending June 30, 1903, and for other purposes, as amended, D.C. Code §§ 47-1508, 47-2501 (1981 Ed.).
• SOURCE: Final Rulemaking published at 34 DCR 6143, 6149 (September 25, 1987).

9 DCMR § 3501 GROSS RECEIPTS TAX ON TELECOMMUNICATION COMPANIES: JULY 1, 1986 - JUNE 30, 1987

3501.1 A gross receipts tax shall be imposed on telecommunication companies beginning July 1, 1986.

3501.2 For the period beginning July 1, 1986, and ending June 30, 1987, the twelve (12) monthly affidavits shall be combined on one affidavit which is due on October 30, 1987.

3501.3 The tax for the period beginning July 1, 1986, and ending June 30, 1987, shall be paid in two (2) equal installments before November 1, 1987, and before January 1, 1988.

3501.4 The Mayor may, upon written application made before the date prescribed for payment of the tax, grant a reasonable extension of time for paying the tax under §§ 3501.3 and 3502.2 of this chapter whenever good cause exists for the extension.

3501.5 Each telecommunication company shall be allowed a credit against the gross receipts tax imposed for the amount of personal property tax paid on the tax year 1987 return due by July 31, 1986 (for the period beginning July 1, 1986 and ending July 30, 1987).

History

• SOURCE: Final Rulemaking published at 34 DCR 6143, 6150 (September 25, 1987).

9 DCMR § 3502 GROSS RECEIPTS TAX ON TELECOMMUNICATION COMPANIES: JULY 1, 1987 - AUGUST 31, 1987

3502.1 For the period beginning July 1, 1987, and ending August 31, 1987, the two (2) monthly affidavits shall be combined on one (1) affidavit due October 30, 1987.

3502.2 The tax for the period beginning July 1, 1987, and ending August 31, 1987, shall be paid in two (2) equal installments before November 1, 1987, and before January 1, 1988.

3502.3 Each telecommunication company shall be allowed a credit against the gross receipts tax imposed for the period for one-sixth (1/6) of the amount of personal property tax paid on the taxable year 1988 return due July 31, 1987.

History

• SOURCE: Final Rulemaking published at 34 DCR 6143, 6150 (September 25, 1987).

9 DCMR § 3503 GROSS RECEIPTS TAX ON TELECOMMUNICATION COMPANIES: SEPTEMBER 1, 1987 - SEPTEMBER 30, 1987

3503.1 For the period beginning September 1, 1987, and ending September 30, 1987, the affidavit is due and the tax shall be paid by October 20, 1987.

3503.2 Each telecommunication company shall be allowed a credit against the gross receipts tax imposed for the period for one-twelfth (1/12) of the amount of personal property tax paid on the tax year 1988 return due by July 31, 1987.

History

• SOURCE: Final Rulemaking published at 34 DCR 6143, 6150 (September 25, 1987).

9 DCMR § 3504 GROSS RECEIPTS TAX ON TELECOMMUNICATION COMPANIES: OCTOBER 1, 1987 AND SUCCEEDING MONTHS

3504.1 For each calendar month beginning after September 30, 1987, the affidavit is due and the tax payable by the twentieth (20th) day of the month following the calendar month for which the tax is due.

3504.2 Each telecommunication company shall be allowed a credit against the gross receipts tax imposed for the lesser of one of the following:

(a) Nine-twelfth (9/12) of the amount of personal property tax paid with the tax year 1988 return due by July 31, 1987; or

(b) Nine-twelfth (9/12) of the amount of personal property tax paid with the tax year 1988 return due by July 31, 1987, multiplied by the following fraction:

Column (1)

Column (2)

Column (3)

Column (4)

9/12 of 1988 District per-sonal Property tax paid

X

Receipts on which District gross re-ceipts tax was paid for twelve months preceding July 1, 1987

X

Value of personal property every where July 1 of Column (1) tax year

=

Credit against Column (1) tax not to exceed limits of this section

Gross receipts every-where for twelve months preceding July 1, 1987

Value of property sub-ject to District per-sonal property tax on July 1 of Column (1) tax year

The following are examples of the application of § 3504.2:

(1) The taxpayer has property valued at one hundred thousand dollars ($100,000) subject to District personal property tax, and personal property everywhere of one million dollars ($1,000,000) on July 1, 1987. The taxpayer's gross receipts everywhere for the twelve (12) month period ended June 30, 1987, are twelve million dollars ($12,000,000), and receipts subject to District gross receipts tax under § 3501 are one million dollars ($1,000,000). District personal property tax paid for the 1988 tax year was three thousand one hundred dollars ($3,100). The amount of the credit allowed on monthly gross return due November 20, 1987 shall be one thousand nine hundred thirty-eight dollars ($1,938), computed as follows:

(1)

(2)

(3)

(4)

$2,325

$1,000,000

X

$1,000,000

=

$1,938

$12,000,000

$100,000

(2) Same facts as example (1) except that receipts subject to District gross receipts tax was one million four hundred thousand dollars ($1,400,000). The allowable credit is two thousand three hundred twenty-five dollars ($2,325), computed as follows because that amount is the lesser of:

(a) The result of the computation below; and

(b) Gross receipts taxes paid for the twelve (12) months preceding July 1, 1987.

(1)

(2)

(3)

(4)

$2,325

X

$1,400,000

X

$1,000,000

=

$2,713

$12,000,000

$100,000

3504.3 As used in § 3504.2, the term "value of personal property" shall mean, for both the numerator and denominator of the fraction, that amount carried on the taxpayer's balance sheet at original cost for the personal property shown in the fraction.

3504.4 The numerator and denominator of Column (3) property values shall include all property subject to the personal property tax under the provisions of the Personal Property Tax Amendment Act of 1986, effective February 28, 1987 (D.C. Law 6-212; D.C. Code § 47-1521 et seq.) without regard for any exemption from the tax.

3504.5 The credit provided in this section shall reduce the tax due each month under this section until the credit, in the aggregate, has been exhausted.

History

• SOURCE: Final Rulemaking published at 34 DCR 6143, 6150 (September 25, 1987).

9-37 ESTATE TAX

9 DCMR § 3700 GENERAL PROVISIONS

3700.1 The provisions of this chapter are adopted under authority of § 21 of the Inheritance and Estate Tax Revision Act of 1986, as amended, effective February 24, 1987 (D.C. Law 6-168; 22 DCR 7008).

3700.2 In accordance with Mayor's Order 87-90, the Deputy Chief Financial Officer of the Office of Tax and Revenue ("Office") is constituted the representative of the Mayor for the supervision and enforcement of the Inheritance and Estate Tax Revision Act of 1986, as the same may be amended from time to time.

3700.3 References in this chapter to sections of the "Act" are to sections of the Inheritance and Estate Tax Revision Act of 1986, as amended, effective 24, 1987 (D.C. Law 6-168; 33 DCR 7008).

3700.4 This chapter shall apply only to estates of persons dying after March 31, 1987, and subject to the provisions of the Act.

3700.5 All estates of persons dying on or before March 31, 1987, shall be governed by the rules contained in Chapter 2 of this title.

History

• AUTHORITY: Unless otherwise noted, the authority for this chapter is § 21 of the Inheritance and Estate Tax Revision Act of 1986, as amended, effective February 24, 1987 (D.C. Law 6-168, D.C. Code § 47-3701), and Mayor's Order 87-90 dated April 20, 1987).
• SOURCE: Final Rulemaking published at 35 DCR 2353 (April 1, 1988).
• EDITOR'S NOTE: The Office of the Chief Financial Officer of the District of Columbia published a Notice of Public Interest at 44 DCR 2345 (April 18, 1997) changing the name of the "Department of Finance and Revenue" to the "Office of Tax and Revenue."

9 DCMR § 3701 FACTORS IN DETERMINING RESIDENCE

3701.1 Factors which may be relevant in determining whether or not a decedent was a resident or nonresident for purposes of the Act include, by way of illustration and not by way of limitation, the following:

(a) The intent of decedent to establish a domicile as evidenced by writings of decedent, such as a will;

(b) The location and nature of a permanent dwelling maintained by decedent;

(c) The purpose of the decedent's presence in the District;

(d) Commitments and acts indicating domicile, including the following:

(1) Voter registration;

(2) Vehicle registration;

(3) Place of filing income tax returns;

(4) Address customarily used;

(5) Claiming or filing homestead exemption;

(e) The situs of a decedent's assets, major business interests or sources of livelihood;

(f) Participation in fraternal, religious and social organizations; and

(g) The amount of time spent by the decedent in various locales.

3701.2 When a claim is made that the residence of the decedent was outside the District, the taxpayer shall have the burden of showing nonresidence.

History

• SOURCE: Final Rulemaking published at 35 DCR 2353, 2354 (April 1, 1988).

9 DCMR § 3702 COMPUTATION OF TAX

3702.1 The amount of the federal credit shall be construed to take full advantage of the maximum state death tax credit allowable under the laws of the United States.

3702.2 In determining the maximum amount of the allowable federal credit, it shall be presumed that the maximum allowable federal credit determined in accordance with §2011(b) of the Internal Revenue Code subject to the limitations of §§ 2011(e) and (f) was claimed and that all other requirements of § 2011 were satisfied. Failure to claim the maximum amount of the federal credit on the federal estate tax return shall not affect the amount of the District estate tax due.

3702.3 For resident decedents owning no real or tangible personal property located outside the District, the District estate tax shall equal the federal credit (determined in accordance with the Act and §§ 3702.1 and 3702.2 of this chapter.

Example: The decedent was domiciled in the District with all of the decedent's property located in the District. The value of the decedent's total gross estate is nine hundred twenty thousand dollars ($920,000) and the allowable deductions are one hundred seventy thousand dollars ($170,000). The allowable credit for state death taxes ("federal credit') is twenty thousand and four hundred dollars ($20,400). Consequently, the District estate tax due is twenty thousand and four hundred dollars ($20,400).

Value

Decedent's Property:

D.C. real property

$500.000

Tangible personal property

135,000

Intangible personal property

285,000

Total gross estate

$920,000

Total allowable deductions

170,000

Taxable estate

750,000

Gross federal estate tax

248,300

Allowable unified credit

192,800

Allowable credit for state death taxes

20,400

("federal credit")

District estate tax due

20,400

3702.4 For resident decedents owning property located outside the District, the District estate tax shall equal the federal credit (determined in accordance with the Act and §§ 3702.1 and 3702.2) reduced by the lessor of one of the following:

(a) The amount of death tax paid to any other state that qualifies for the credit; or

(b) An amount computed under the following formula:

Federal credit

X

Value of the gross estate subject to death tax in the other state (applying District law)

The value of the decedent's gross estate

Example: The decedent resided in the District but owned a summer beach house in Maryland. The value of her gross estate is one million four hundred fifteen thousand dollars ($1,415,000) and the allowable deductions are four hundred fifteen thousand dollars ($415,000). The allowable credit for state death taxes ("federal credit") is thirty-three thousand two hundred dollars ($ 33,200). The District estate tax will be thirty-three thousand two hundred dollars ($33,200) reduced by the lesser of the tax actually paid by the estate to Maryland or the amount allowed by statute. In this case, the thirty-three thousand two hundred dollars ($33,200) is reduced by the statutory amount of eleven thousand six hundred fourteen dollars ($11,614). The District estate tax is twenty-one thousand five hundred eighty-six dollars ($21,586).

Decedent's Property:

Value

D.C. real property

$600,000

Tangible personal property

135,000

Intangible personal property

185,000

Maryland real property

400,000

Maryland tangible personal property

95,000

Total gross estate

$1,415,000

Total allowable deductions

415,000

Taxable estate

1,000,000

Gross federal estate tax

345,800

Allowable unified credit

192,800

Allowable credit for state death taxes ("federal credit")

33,200

Potential District estate tax

33,200

District estate tax computed by reducing

$33,200 by the lesser of:

(1) Eleven thousand six hundred twenty dollars ($11,600) (the amount of death tax paid to Maryland); or

(2) Eleven thousand six hundred fourteen dollars ($11,614) determined as follows:

Federal credit

X

Value of the gross estate subject to death taxation in Maryland (applying District law)

The value of the decedent's gross estate

$33,200

X

$495,000

$1,415,000

District estate tax ($33,200 - $11,614)

$21,586

3702.5 The District estate tax shall be imposed on the estate of a nonresident decedent to the extent that the decedent's property has a taxable situs in the District. The tax is computed under the following formula:

Federal credit

X

Value of that part of decedent's gross estate subject to tax by the District

The value of the decedent's gross estate

Example: The decedent was domiciled in the State of Maryland and conducted business as a sole proprietor in the District of Columbia. The decedent gross estate totals three million four hundred thirty-five thousand dollars ($3,435,000) and allowable deductions total seven hundred thirty-five thousand dollars ($735,000). Under the statute, the District estate tax is one hundred nineteen thousand eight hundred and twelve dollars ($119,812).

Decedent's Property:

Value

Maryland real property

$545,000

Tangible personal property located in Maryland

135,000

Non-business intangible personal property

105,000

D.C. real property used in business

2,000,000

Commercial bank accounts located in Maryland related to business

500,000

Business tangible personal property located in the District

150,000

Total gross estate

$3,435,000

Total allowable deductions

735,000

Taxable estate

2,700,000

Gross federal estate tax

1,125,800

Allowable unified credit

192,800

Allowable credit for state death taxes ("federal credit")

155,600

District estate tax computed under the following formula:

Federal credit

×

Value of that part of decedent's gross estate subject to tax by the District

The value of the decedent's gross estate

$ 155,600

×

$ 2,650,000

$ 3,435,000

District estate tax

$ 120,041

History

• SOURCE: Final Rulemaking published at 35 DCR 2353, 2354 (April 1, 1988).

9 DCMR § 3703 DETERMINATION OF TAXABLE SITUS

3703.1 The taxable situs of real property shall be the place where the real property is situated.

3703.2 Real property having an actual situs outside the District shall not be taxable with respect to a resident decedent where the property is held in a personal trust.

3703.3 Real property having an actual situs in the District shall be taxable with respect to a nonresident decedent, including property held in a personal trust.

3703.4 All other indirect interests in real estate (e.g., partnership, corporate) shall for District estate tax purposes be regarded as intangible personal property.

3703.5 A contract to convey land shall constitute an equitable conversion so that the seller's interest is personal property and the buyer's interest is real property.

3703.6 The taxable situs of tangible personal property shall be the place where the property is customarily located at the time of the decedent's death.

3703.7 The taxable situs of tangible personal property which, by its nature, is readily movable shall be determined by the Deputy Chief Financial Officer from the facts of each case.

3703.8 If readily movable tangible personal property belonging to a decedent domiciled within the District is accidentally or casually outside of the District at the time of the decedent's death, the taxable situs of that property shall be the District.

3703.9 The taxable situs of intangible personal property other than business use intangible personal property shall be the domicile of the decedent at the time of the decedent's death.

3703.10 The taxable situs of business use intangible personal property as defined in § 3799.2 shall be in the District, regardless of the resident of the decedent.

History

• SOURCE: Final Rulemaking published at 35 DCR 2353, 2358 (April 1, 1988).

9 DCMR § 3704 APPORTIONMENT

3704.1 The values used in determining the tax shall be used for purposes of making the apportionment required by § 15 of the Act.

3704.2 Any exemption or reduction allowed by reason of the relationship of any person to the decedent or by reason of the purposes of the gift shall inure to the benefit of the person bearing that relationship or receiving the gift.

3704.3 The following credits shall inure to the proportionate benefit of all persons liable to apportionment:

(a) Any unified credit;

(b) Any credit for property previously taxed;

(c) Any credit for state death taxes; and

(d) Any credit for gift taxes or death taxes of a foreign country.

3704.4 To the extent that a gift or bequest does not qualify for a full marital or charitable deduction for purposes of the federal estate tax solely by reason of an inheritance or estate tax or other death tax imposed upon and deductible from the gifted or bequeathed property, the property shall not be included in the computation provided for the D.C. Code § 47-3714, and to that extent no apportionment shall be made against the property. This exception shall not apply in any instance where the result will be to deprive the estate of a deduction otherwise allowable under § 2053(d) of the Internal Revenue Code of 1986, relating to the deduction for state death taxes on transfers for public, charitable or religious uses.

3704.5 In all cases in which any property required to be included in the gross estate does not come into the possession of the fiduciary or other person required to pay the District estate tax or the federal estate tax, he or she shall be entitled, and it shall be his or her duty, to recover from whomsoever is in possession, or from the persons interested in the estate, the proportionate amount of the taxes owed under the provisions of the Act.

3704.6 If the fiduciary or other person required to pay the tax cannot collect from any person interested in the estate the amount of the tax apportioned to the person, the amount not recoverable shall be equitably apportioned among the persons interested in the estate who are subject to apportionment.

3704.7 If the fiduciary or other person required to pay the tax transfers any property included in the estate to another person, other than a bona fide purchaser for value, the transferee shall be jointly and severally liable with the transferor for the amount of tax apportioned to the transferor under this section, less the value at the time of the transfer of any consideration furnished by the transferee for the property.

3704.8 None of the provisions of the Act shall in any way impair the right or power of any person by will or by written instrument executed inter vivos to make direction for the payment of taxes and to designate the fund or funds or property out of which the payment shall be made; and in every such case the provisions of the will or of such written instrument executed inter vivos shall be given effect to the same extent as if the Act had not been enacted.

History

• SOURCE: Final Rulemaking published at 35 DCR 2353, 2358 (April 1, 1988).

9 DCMR § 3705 FILING RETURNS AND PAYMENT OF TAX

3705.1 A personal representative who has obtained an extension of time for filing the federal estate tax return shall promptly file with the Deputy Chief Financial Officer a copy of the document granting the extension.

3705.2 Upon good cause shown prior to the expiration of any approved extended period, the Deputy Chief Financial Officer may further extend the time for filing a District estate tax return.

3705.3 Where the personal representative claims credit or a deduction for state death taxes for taxes paid to another state and allowed as a credit against the federal estate tax, he or she shall file with the District estate tax return a computation of the tax and proof of payment. The Deputy Chief Financial Officer shall accept a receipt issued by the other state's tax authority as proof of payment, and in his or her discretion, may accept other proof.

3705.4 Upon good cause shown, the Deputy Chief Financial Officer may extend the time for paying the District estate tax.

3705.5 The period of time for making an assessment pursuant to §8 of the Act shall not be limited if a return due under the provisions of the Act is not filed by the personal representative.

3705.6 Within thirty (30) days of receiving an Internal Revenue Service audit report showing adjustments to the federal estate tax return, the personal representative shall file with the Deputy Chief Financial Officer an amended District estate tax return and a copy of the Internal Revenue Service audit report.

3705.7 If additional District estate tax is due as a result of the amendment or adjustments to the federal and District estate tax returns, the personal representative shall pay the additional tax and interest calculated in accordance with D.C. Code §47-453, for the period from ten (10) months after the decedent's death until the amended return is filed. The tax and interest shall be paid at the time of filing the amended District estate tax return.

3705.8 If the Deputy Chief Financial Officer determines a deficiency in tax, he or she shall send to the person liable for the payment of the deficiency at his or her most recent address by certified mail, notice of the determination.

3705.9 Upon good cause shown, the Deputy Chief Financial Officer may grant an extension of time for making protest provided for in D.C. Code § 47-3717.

3705.10 In the event the District estate tax is overpaid, a refund may be requested by filing a claim or an amended District estate tax return within three (3) years after the date the tax was paid. Upon a determination by the Deputy Chief Financial Officer that the tax has been overpaid, the Deputy Chief Financial Officer shall refund the amount of overpayment.

History

• SOURCE: Final Rulemaking published at 35 DCR 2353, 2359 (April 1, 1988).

9 DCMR § 3706 FAILURE TO FILE OR PAY TIMELY, OR FILING OF FALSE RETURN

3706.1 Each application for an extension of time shall be in writing and shall clearly state the reasons for the request.

3706.2 If an extension of time to file the estate tax return has not been obtained or, in the case of an extension, if the return or an additional extension is not filed within the extended time period, the penalty for late filing shall be assessed.

3706.3 If an extension of time to pay the estate tax has not been obtained or, in the case of an extension, if the payment is not made or an additional extension is not filed within the extended time period, the penalty for late payment shall be assessed.

3706.4 Any outstanding tax due remaining after the expiration of the due date for payment or of an extension of time to pay shall be deemed delinquent and shall be subject to penalty and interest under the provisions of D.C. Code § 47-453.

History

• SOURCE: Final Rulemaking published at 35 DCR 2353, 2360 (April 1, 1988).

9 DCMR § 3707 LIEN AND CERTIFICATES

3707.1 The lien imposed by the Act on the decedent's property shall not be valid as against any purchaser, mortgagee, pledgee or other holder of a security interest for a full and adequate consideration in money or money's worth. Property, consideration or proceeds received as a result of any sale, mortgage, pledge or granting of a security interest shall remain subject to the lien imposed by D.C. Code § 47-3711.

3707.2 The Deputy Chief Financial Officer shall issue no releases of lien.

3707.3 Except as provided in § 3707.5, if the Deputy Chief Financial Officer is satisfied that no liability for tax, penalty or interest exists, or that all tax, penalty and interest liabilities have been fully discharged or provided for, the Deputy Chief Financial Officer shall, upon request by the personal representative, issue a certificate in accordance with § 11 of the Act.

3707.4 Issuance of a certificate shall discharge the personal representative from personal liability for the tax, penalty and interest imposed under the Act.

3707.5 The Deputy Chief Financial Officer shall not provide a certificate when no District estate tax return is required to be filed.

History

• SOURCE: Final Rulemaking published at 35 DCR 2353, 2361 (April 1, 1988).

9 DCMR § 3799 DEFINITIONS

3799.1 Words and phrases defined in § 2 of the Act shall have the same meaning when used in this chapter. In addition, the following words and phrases shall have the meaning ascribed:

Business use intangible personal property - is intangible personal property used by the decedent in a trade or business in the District. It includes, by way of illustration and not by way of limitation, notes, accounts receivable, bank accounts, patents and other choses in action. Ownership of an interest in a corporation or partnership in the District does not in itself establish the use of intangible personal property in a trade or business in the District.

Deputy Chief Financial Officer - the Deputy Chief Financial Officer of the Office of Tax and Revenue, or his or her designee, agent or representative.

District estate tax - the tax imposed by the Act.

Intangible personal property - includes by way of illustration and not by way of limitation, stocks, bonds, notes (whether secured or unsecured), bank deposits, accounts receivable, trademarks, copyrights, patents, good will, partnership interests, life insurance policies and other choses in action.

Person - includes a natural person, corporation, association, partnership, joint venture, joint stock company, syndicate, estate or trust, or any other entity under which business or other activities may be conducted, and any government, political subdivision, governmental agency, or local governmental agency.

Person interested in the estate - any person including a personal representative, guardian, or trust entitled to receive, or who has received, from a decedent while alive or by reason of the death of a decedent, any property or interest therein, or any benefit whatsoever with respect to any such property or interest, included in the decedent's gross estate, whether under a will or intestacy or by reason of any transfer, trust, estate, interest, right, power or relinquishment of power.

Resident - is synonymous with the word "domiciliary" and the word "residence" is synonymous with the word "domicile."

Tangible personal property - includes, by way of illustration and not by way of limitation, cash, goods, wares, merchandise, vehicles, and all other things corporeal.

History

• SOURCE: Final Rulemaking published at 35 DCR 2353, 2361 (April 1, 1988).

9-38 CENTRAL COLLECTION UNIT

9 DCMR § 3800 IMPOSITION OF COSTS AND FEES:

3800.1. Definitions. The terms “central collection unit”, “delinquent debt”, and “person” shall have the same meaning in this chapter as those terms are defined in the Delinquent Debt Recovery Act of 2012, effective September 20, 2012, (D.C. Law 19-0168; 59 DCR 8025).

3800.2 The amount of actual costs incurred that a person shall pay the central collection unit (CCU), associated with the collection of a delinquent debt, shall be determined as follows: A collection fee of twenty-six (26%) percent shall be imposed after a debt is referred to the CCU.

3800.3 Any person who tenders payment by check for a financial obligation owed to the District of Columbia government, including a tax assessment, fee, citation, or charge, that is subsequently dishonored or not duly paid, shall, in addition to the amount of the financial obligation owed or the amount of the delinquent debt transferred and referred to the CCU for collection, pay a fee to the CCU of $65 dollars for the dishonored or not duly paid check.

History

• SOURCE: Final Rulemaking published at 60 DCR 2400 (March 1, 2013).

9-39 SHARED RESPONSIBILITY PAYMENT

9 DCMR § 3900 GENERAL PROVISIONS

3900.1 The provisions of this chapter are adopted under authority of D.C. Official Code § 47-5109(2).

3900.2 The provisions of this chapter shall be in effect with respect to taxable years commencing after December 31, 2018.

History

• SOURCE: Final Rulemaking published at 67 DCR 1234 (February 7, 2020). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 3900

9 DCMR § 3901 REQUIREMENT TO maintain minimum essential coverage

3901.1 A nonexempt individual, and any dependent of the individual who is a nonexempt individual, must have minimum essential coverage or pay the District shared responsibility payment for each month beginning after December 31, 2018.

3901.2 An individual has minimum essential coverage for each month in which the individual is enrolled in, for at least one day during the month, a program or plan identified as minimum essential coverage.

History

• SOURCE: Final Rulemaking published at 67 DCR 1234 (February 7, 2020). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 3901

9 DCMR § 3902 IMPOSITIoN OF DISTRICT shared responsibility payment

3902.1 Except as provided in § 3903, a District shared responsibility payment is imposed on an individual for any month for which:

(a) The individual is a nonexempt individual who does not have minimum essential coverage; or

(b) A dependent that may be claimed on the individual’s District income tax return for the taxable year, except as provided in § 3903.5, is a nonexempt individual who does not have minimum essential coverage.

3902.2 In addition to § 3902.1, the following rules apply:

(a) If a nonexempt individual may be claimed as a dependent by more than one taxpayer in the same taxable year and those taxpayers do not file a joint District income tax return, only one taxpayer may claim the nonexempt individual as a dependent and the District shared responsibility payment attributable to that dependent shall be imposed on the taxpayer who claims the dependent for that taxable year on his or her District income tax return.

(b) If no taxpayer claims the nonexempt individual as a dependent, the District shared responsibility payment attributable to that dependent shall be imposed on the taxpayer with priority under the rules of § 152 of the Internal Revenue Code to claim the individual as a dependent on his or her District Income tax return.

3902.3 In addition to § 3902.1 and § 3902.2, the following rules apply with regard to a dependent who is adopted during the taxable year:

(a) If a taxpayer adopts a nonexempt dependent, or accepts a dependent who is an eligible foster child as defined in § 152(f)(1)(C) of the Internal Revenue Code during the taxable year, and is otherwise liable for a District shared responsibility payment attributable to that nonexempt dependent under this section, the District shared responsibility payment imposed on that taxpayer shall only be for the months in the taxable year that follow the month in which the adoption or acceptance occurs.

(b) If a taxpayer who is otherwise liable for a District shared responsibility payment attributable to a nonexempt dependent under this section places or, by operation of law, must place, the dependent for adoption or foster care during the taxable year, the District shared responsibility payment is imposed on that taxpayer only for the full months in the taxable year that precede the month in which the adoption or foster care placement occurs.

(c) If a taxpayer has accepted a dependent who is an eligible foster child as defined in § 152(f)(1)(C) of the Internal Revenue Code, and the foster care placement for that child is terminated during the taxable year, the taxpayer that has accepted the foster child as a dependent shall not be liable for a District shared responsibility for months following the month in which the foster care placement terminated.

History

• SOURCE: Final Rulemaking published at 67 DCR 1234 (February 7, 2020). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 3902

9 DCMR § 3903 exempt individuals

3903.1 An individual is an exempt individual for a month that includes a day with respect to which the individual has received from the Authority, pursuant to Chapter 2 of Title 26-D DCMR, the following:

(a) An affordability exemption determination certificate; or

(b) A hardship exemption determination certificate.

3903.2 An individual is an exempt individual for a month that includes a day with respect to which an individual, or a taxpayer who properly claims the individual as a dependent, self-certifies that the individual:

(a) Was not a resident of the District of Columbia; or

(b) Is exempt pursuant to one or more of the exemptions listed in 26-A DCMR § 8901.1.

3903.3 An individual is exempt for an entire tax year with respect to which a taxpayer self-certifies that the individual is exempt pursuant to one or more of the exemptions listed in 26-A DCMR § 8901.5.

3903.4 A taxpayer who certifies that he or she or any of his or her dependents are exempt pursuant to Subsections 3903.2 or 3903.3 shall be subject to the procedures set forth in § 3905, including audit, to verify that any such exemptions were properly claimed.

3903.5 An individual is an exempt individual for any taxable year with respect to which the individual, or a taxpayer who properly claims the individual as a dependent, files a sworn affidavit on a form prescribed by the Chief Financial Officer attesting that the individual did not have minimum essential coverage on the basis of a sincerely held religious belief during the entire taxable year.

3903.6 An individual, and any dependents properly claimed by that individual, are exempt individuals for any taxable year if that individual’s gross income is below the applicable filing threshold to file a District income tax return, as defined in § 3999.1(b). Notwithstanding the foregoing, an individual who is properly claimed as a dependent by a taxpayer whose gross income meets or exceeds the applicable filing threshold to file a District income tax return is not an exempt individual even if the dependent’s gross income is otherwise below the applicable filing threshold to file a District income tax return, as defined in § 3999.1(b).

History

• SOURCE: Final Rulemaking published at 67 DCR 1234 (February 7, 2020). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 3903

9 DCMR § 3904 COMPUTATION OF DISTRICT SHARED RESPONSIBILITY PAYMENT

3904.1 The District shared responsibility payment imposed on a taxpayer in accordance with § 3902 is –

(a) The lesser of:

(1) The sum of the monthly penalty amounts; or

(2) The sum of the monthly District’s average bronze plan premiums

for the shared responsibility family;

(b) Less the amount of any federal shared responsibility payment imposed on the taxpayer pursuant to § 5000A of the Internal Revenue Code for the same taxable year.

3904.2 “Monthly penalty amount” means, for a month that a nonexempt individual is not covered under minimum essential coverage, 1/12 multiplied by the greater of:

(a) The flat dollar amount; or

(b) The excess income amount.

3904.3 “Flat dollar amount” means the lesser of:

(a) The sum of the applicable dollar amounts for all individuals included in the taxpayer's shared responsibility family; or

(b) Three hundred percent (300%) of the applicable dollar amount (determined without applying § 3904.4(b)) for the taxable year.

3904.4 “Applicable dollar amount” means:

(a) For a nonexempt individual who has attained the age of eighteen (18) before the first day of a month, an amount equal to six hundred ninety-five dollars ($695) for the tax year beginning after December 31, 2018, increased annually, beginning with the tax year commencing after December 31, 2019, by the cost-of-living adjustment (if the adjustment does not result in a multiple of fifty dollars ($50), rounded down to the next lowest multiple of $50); or

(b) For a nonexempt individual who has not attained the age of 18 before the first day of a month, an amount equal to one-half of the applicable dollar amount in paragraph (a) of this section for the taxable year in which the month occurs. For purposes of this paragraph (b), an individual attains the age of 18 on the anniversary of the date when the individual was born. For example, an individual born on March 1, 2001, attains the age of 18 on March 1, 2019.

3904.5 “Excess income amount” means 2.5 percent of the excess of the taxpayer's household income, as defined in § 3999.1(k), that exceeds the taxpayer's applicable filing threshold.

3904.6 “Monthly District’s average bronze plan premium” means, for a month for which a shared responsibility payment is imposed, 1/12 of the annual average premium for qualified health plans offered through the District’s individual market health benefit exchange established pursuant to Section 5 of the Health Benefit Exchange Authority Establishment Act of 2011, effective March 2, 2012 (D.C. Law 19-94; D.C. Official Code § 31-3171.04(a)(1)), that have a bronze level of coverage, and would provide coverage for the taxpayer, and if applicable, the taxpayer’s spouse, registered domestic partner, or dependents for plan years beginning in the calendar year within which the taxable year ends.

History

• SOURCE: Final Rulemaking published at 67 DCR 1234 (February 7, 2020). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 3904

9 DCMR § 3905 ADMINISTRATION AND PROCEDURE

3905.1 A taxpayer's liability for the District shared responsibility payment shall be reported on the forms and in the manner prescribed by the Chief Financial Officer.

3905.2 The time and place for filing all returns reporting the District shared responsibility payment for the preceding taxable year, including any extensions, shall be the same as prescribed by D.C. Official Code §§ 47-1805.03(a)(2) and (b).

3905.3 A taxpayer must file a return or other form prescribed by the Chief Financial Officer to claim any of the exemptions described in § 3903 except that a taxpayer need not file any return or form to claim the exemptions described in § 3903.6. If a taxpayer has a gross income below the applicable filing threshold and nevertheless files a return, the taxpayer is eligible for the exemption described in § 3903.6 on the return.

3905.4 If a taxpayer files a District income tax return with the filing status of married filing jointly, registered domestic partners filing jointly, married filing separate on the same return or registered domestic partners filing separate on the same return, pursuant to D.C. Official Code § 47-1805.01 for a taxable year, the taxpayer and the taxpayer’s spouse or registered domestic partner must jointly report a District shared responsibility payment on the prescribed form for that taxable year if either spouse or domestic partner is liable for a District shared responsibility payment.

3905.5 Taxpayers who report a joint District shared responsibility payment on the prescribed form for a taxable year are jointly liable for any District shared responsibility payment incurred by either taxpayer for a month included in the taxable year.

3905.6 Except as otherwise provided in § 3905.8, a taxpayer who fails to pay the District shared responsibility payment shall be subject to all collection, enforcement, and administrative provisions applicable to unpaid taxes or fees as provided under Chapter 18, Chapter 42, Chapter 43, and Chapter 44 of Title 47 of the District of Columbia Official Code, including but not limited to the deficiency protest procedures set for in D.C. Official Code § 47-4312.

3905.7 The period of limitations for assessing the District shared responsibility payment is the same as that prescribed by D.C. Official Code § 47-4301.

3905.8 Notwithstanding any other provision of law, a taxpayer shall not be subject to the following enforcement provisions for failure to pay the District shared responsibility payment:

(a) Liens or levies pursuant to Subtitles II and VI of Chapter 44 of Title 47 of the District of Columbia Official Code; or.

(b) Criminal prosecution pursuant to Chapter 41 of Title 47 of the District of Columbia Official Code.

History

• SOURCE: Final Rulemaking published at 67 DCR 1234 (February 7, 2020). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 3905

9 DCMR § 3999 DEFINITIONS

3999.1 For the purposes of this chapter, the following words, terms, and phrases shall have the following meanings, unless otherwise required by the context of this chapter:

Applicable entity -

(1) An employer or other sponsor of an employment-based health plan;

(2) The Department of Health Care Finance; or

(3) An insurance carrier licensed or otherwise authorized to offer minimum essential coverage.

Applicable filing threshold - the amount of gross income that would trigger an individual's requirement to file a District income tax return pursuant to D.C. Official Code § 47-1805.02.

Authority - the District of Columbia Health Benefit Exchange Authority established under D.C. Official Code § 31–3171.02.

Base year - the calendar year beginning January 1, 2018.

Chief Financial Officer - the same meaning as under D.C. Official Code § 1-204.24a(a)(1).

Cost-of-living adjustment - the ratio of CPI for the preceding calendar year and the CPI for the base year.

CPI - for any calendar year, the average of the Consumer Price Index for the Washington-Metropolitan Statistical Area for All-Urban Consumers published by the Department of Labor, or any successor index, as of the close of the 12-month period ending on July 31 of such calendar year.

Department of Health Care Finance - the District of Columbia Department of Health Care Finance established under section 3 of the Department of Health Care Finance Establishment Act of 2007, effective February 27, 2008 (D.C. Law 17-109; D.C. Official Code § 7-771.02).

Dependent - a dependent as defined under § 501(c)(3) of the Internal Revenue Code.

Federal adjusted gross income - the same meaning as under § 62 of the Internal Revenue Code.

Household income -

(1) The federal adjusted gross income reported by a taxpayer on his or her federal individual or separate income tax return; or

(2) The federal adjusted gross income reported by taxpayers on their federal joint return.

Internal Revenue Code - the same meaning as under D.C. Official Code § 47-1801.04(28).

Minimum essential coverage - the same meaning as under 26-A DCMR § 8999.1(j).

Month - a calendar month.

Resident - the same meaning as under D.C. Official Code § 47-1801.04(42).

Shared responsibility family - all nonexempt individuals for whom the taxpayer (and the taxpayer's spouse or registered domestic partner) is liable for the shared responsibility payment imposed under § 3902 of this chapter.

Taxable year - the same meaning as under D.C. Official Code § 47-1801.04(51).

History

• SOURCE: Final Rulemaking published at 67 DCR 1234 (February 7, 2020). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 3999

9-40 TAX AMNESTY PROGRAM

9 DCMR § 4000 GENERAL PROVISIONS

4000.1 A three (3) month tax amnesty program shall commence on July 1, 1987, and end on September 30, 1987.

4000.2 The amnesty program shall apply to eligible taxpayers owing certain taxes administered by the Office of Tax and Revenue (“Office”) which are imposed or authorized by Title 47 and Title 25 of the District of Columbia Code (1981) (“Tax Law”) as set forth in § 4001 of this chapter. Amnesty shall apply to those tax liabilities arising prior to November 1, 1986, as set forth in § 4002 of this chapter. The taxpayer shall specify each tax (“designated tax”) and each tax period (“designated tax period”) for which amnesty is requested.

4000.3 The tax amnesty program provides that civil and criminal penalties and fifty percent (50%) of the interest otherwise due shall be waived upon the taxpayer submitting a written application for amnesty and submitting with the amnesty application each of the following:

(a) Payment of the tax due;

(b) Payment of fifty percent (50%) of the interest due; and

(c) The filing of any required return(s) or report(s) for the designated tax.

4000.4 Except as provided in § 4000.5, the Mayor may, upon written application and only in the most extraordinary of circumstances, waive the interest that is required to be paid pursuant to § 4000.3(b).

4000.5 The Mayor shall waive one hundred percent (100%) of the interest otherwise due on any designated tax if the taxpayer pays the full tax due on or before July 31, 1987.

4000.6 A taxpayer shall not be eligible for amnesty if any of the following apply:

(a) The taxpayer is a party to criminal litigation, related to the designated tax;

(b) The taxpayer is a party to civil litigation, related to the designated tax;

(c) The taxpayer is a party to a collection agreement with the Office, in relation to the designated tax executed before November 1, 1986;

(d) The taxpayer fails to pay the full amount of the computed liability required under § 4004 of this chapter; or

(e) The taxpayer engages in willful fraud in filing an application for amnesty under the terms of the amnesty program.

4000.7 For purposes of this chapter the following terms and phrases shall have the meaning ascribed:

(a) “Tax due” means the amount of the final determination of tax due or assessed or, in the case of no final determination, the amount the taxpayer determines to be due;

(b) “Interest due” means the amount of interest computed from the due date of the tax to the date of payment; and

(c) “Computed liability” means the tax due, plus interest due.

History

• AUTHORITY: Unless otherwise noted, the authority for this chapter is § 501 of Title V of the Tax Amnesty Act of 1986, effective February 28, 1987 (D.C. Law 6-209, D.C. Code § 47-451), and Mayor’s Order 87-104 dated April 23, 1987.
• SOURCE: Final Rulemaking published at 34 DCR 4091 (June 26, 1987). EDITOR’S NOTE: The Office of the Chief Financial Officer of the District of Columbia published a Notice of Public Interest at 44 DCR 2345 (April 18, 1997) changing the name of the “Department of Finance and Revenue” to the “Office of Tax and Revenue.”

9 DCMR § 4001 TAXES COVERED

4001.1 Under the amnesty program, penalties and fifty percent (50%) of the interest otherwise due, except as provided in § 4000.5, relating to the following taxes may be waived:

(a) Income and franchise taxes, including withholding taxes, imposed pursuant to the District of Columbia Income and Franchise Tax Act of 1947, approved July 16, 1947 (61 Stat. 331; D.C. Code §§ 47-1801.1 et seq.).

(b) Inheritance and estate taxes imposed pursuant to Title V of An Act To provide additional revenue for the District of Columbia, and for other purposes, approved August 17, 1937 (50 Stat. 683; D.C. Code §§ 47-1901 et seq.);

(c) Sales taxes imposed pursuant to the District of Columbia Sales Tax Act, approved May 27, 1949 (63 Stat. 112; D.C. Code §§ 47-2001 et seq.);

(d) Compensating-use taxes imposed pursuant to the District of Columbia Use Tax Act, approved May 27, 1949 (63 Stat. 124; D.C. Code §§ 47-2201 et seq.);

(e) Motor vehicle fuel taxes imposed pursuant to An Act To Provide for a tax on motor vehicle fuels sold within the District of Columbia, and for other purposes, approved April 23, 1924 (43 Stat. 106; D.C. Code §§ 47-2301 et seq.);

(f) Cigarette taxes imposed pursuant to the District of Columbia Cigarette Tax Act of 1981, effective March 10, 1982 (D.C. Law 4-71; D.C. Code §§ 47-2401 et seq.);

(g) Gross receipts taxes imposed pursuant to § 6(5) of An Act Making appropriations to provide for the expenses of the government of the District of Columbia for the fiscal year ending June thirtieth, nineteen hundred and three, and for other purposes, approved July 1, 1902 (32 Stat. 619; D.C. Code § 47-2501);

(h) Hotel occupancy taxes imposed pursuant to the Hotel Occupancy and Surtax on Corporations and Unincorporated Businesses Tax Act of 1977, effective March 16, 1978 (D.C. Law 2-58; D.C. Code §§ 47-3201 et seq.);

(i) Personal property taxes imposed pursuant to An Act Making appropriations for the government of the District of Columbia and other activities chargeable in whole or in part against the revenues of the District for the fiscal year ending June 30, 1923, and for other purposes, approved June 29, 1922 (42 Stat. 669; D.C. Code § 47-501), § 6(2) of An Act Making appropriations to provide for the expenses of the government of the District of Columbia for the fiscal year ending June thirtieth, nineteen hundred and two, and for other purposes, approved July 1, 1902 (3 Stat. 618; D.C. Code § 47-1507);

(j) Alcoholic beverage taxes imposed pursuant to the District of Columbia Alcoholic Beverage Control Act, approved January 24, 1934 (48 Stat. 319; D.C. Code §§ 25-101 et seq.);

(k) Estate taxes imposed pursuant to the Inheritance and Estate Tax Revision Act of 1986, signed by the Mayor on October 27, 1986 (D.C. Law 6-168; 33 DCR 7008); and

(l) Personal property taxes imposed pursuant to the Personal Property Tax Amendment Act of 1986, as approved by the Council of the District of Columbia on December 16, 1986 (D.C. Law 6-212; 34 DCR 850).

4001.2 Civil penalties which may be waived under amnesty shall include any amount imposed for the failure to comply with provisions of the tax law which the Office has authority to waive. This includes, but is not limited to, the following:

(a) Withholding Tax - penalty and additions to tax defined in D.C. Code § 47-1812.8;

(b) Income and Franchise Taxes - penalty and additions to tax defined in D.C. Code §§ 47-1813.1 through 47-1813.7;

(c) Sales Tax - penalty and additions to tax defined in D.C. Code §§ 47-2027 and 47-2028;

(d) Inheritance and Estate Taxes - penalty and additions to tax defined in D.C. Code §§ 47-1924 through 47-1927;

(e) Compensating-Use Taxes - penalty and additions to tax defined in D.C. Code §47-2213;

(f) Motor Fuel Tax - penalty and additions to tax defined in D.C. Code §§ 47-2310, 47-2716 and 47-2317;

(g) Cigarette Taxes - penalty and additions to tax defined in D.C. Code § 47-2411.1;

(h) Gross Receipts Taxes - penalty and additions to tax defined in D.C. Code §§ 47-1813.1 through 47-1813.7;

(i) Hotel Occupancy Taxes - penalty and additions to tax defined in D.C. Code § 47-1509;

(j) Personal Property Taxes - penalty and additions to tax defined in D.C. Code §§ 47-1503 and 47-1509;

(k) Alcoholic Beverage Taxes - penalty and addition to tax defined in D.C. Code § 25-140; and

(l) Any other penalties or additions to tax that were applicable to any designated tax under the Act.

History

• SOURCE: Final Rulemaking published at 34 DCR 4091, 4092 (June 26, 1987).

9 DCMR § 4002 TAX PERIODS COVERED

4002.1 The amnesty program shall apply to tax liabilities for taxable periods which returns or reports were required to be filed prior to November 1, 1986.

History

• SOURCE: Final Rulemaking published at 34 DCR 4091, 4094 (June 26, 1987).

9 DCMR § 4003 TAXPAYER ELIGIBILITY

4003.1 Amnesty shall not be granted to any taxpayer who is a party to any civil or criminal litigation commenced before November 1, 1986, in any court competent jurisdiction for nonpayment, delinquency, fraud in relation to any of the designated taxes.

4003.2 A taxpayer’s eligibility shall be separately determined in relation to each designated tax and designated tax period. Thus, a taxpayer may be ineligible for amnesty for one designated tax and designated tax period, but may be eligible for amnesty for another designated tax and designated tax period.

4003.3 A taxpayer’s eligibility shall be determined as of the date of application.

4003.4 A taxpayer shall be ineligible for amnesty for any designated tax which directly relates to any criminal litigation commenced against the taxpayer before November 1, 1986; Provided, that a taxpayer may be eligible for amnesty where the criminal litigation results in acquittal or the taxpayer is otherwise discharged without further prosecution before September 30, 1987.

4003.5 For purposes of this chapter, the term “criminal litigation” shall apply under the following conditions:

(a) Begins once an indictment, complaint or information has been filed against the taxpayer;

(b) Ends when the time to appeal has expired or the appellate process has been exhausted; and

(c) Results in acquittal or the taxpayer is otherwise discharged without further prosecution upon:

(1) Proof of acquittal which includes an order of a court of acquittal; or

(2) Proof that the taxpayer is discharged without further prosecution which includes an order of a court discharging the taxpayer from further prosecution.

4003.6 A taxpayer who is ineligible pursuant to § 4003.4 of this section shall not make an application for amnesty for the tax and tax periods involved.

4003.7 If a taxpayer who is ineligible under § 4003.4 submits an application, the application, return(s) and payment shall not be returned. The application, return(s) or payment shall be treated as if they were received apart from an amnesty application. Penalties for the designated tax shall not be waived and any civil, administrative, or criminal action or proceeding relating to the designated tax shall not be barred.

4003.8 A taxpayer is ineligible for amnesty for any designated tax which directly relates to a civil litigation commenced before November 1, 1986; Provided, that a taxpayer may be eligible for amnesty where the civil litigation is dismissed with prejudice against the taxpayer before September 30, 1987.

4003.9 For purposes of this chapter, the term “civil litigation” shall include the following requirements:

(a) The Court proceedings instituted by the taxpayer; and

(b) The Court proceedings instituted by the Office pursuant to or in enforcement of tax liabilities that are the subject of a collection agreement which the taxpayer executed with the Office prior to November 1, 1986.

4003.10 Civil litigation shall not include an administrative proceeding filed by the taxpayer with the Office.

4003.11 Civil litigation shall be deemed dismissed with prejudice upon proof of dismissal with prejudice which includes a stipulation to discontinue the litigation, or any other document adopted or approved by order of a court that dismisses the litigation with prejudice against the taxpayer.

4003.12 Any application, returns or payment received shall not be returned to a taxpayer who is denied amnesty based on § 4003.8 of this section.

History

• SOURCE: Final Rulemaking published at 34 DCR 4091, 4094 (June 26, 1987).

9 DCMR § 4004 REQUIREMENTS FOR AMNESTY

4004.1 On or before September 30, 1987, a taxpayer shall do the following:

(a) File an application specifying both the tax and tax period(s) for which amnesty is sought;

(b) File previously unfiled or amended returns or reports, whichever is applicable;

(c) Pay the tax due; and

(d) Pay fifty percent (50%) of the interest due, except as provided in § 4000.5.

4004.2 The application for amnesty shall be in a form approved by the Mayor for such purposes. An amnesty application shall include at least the following:

(a) The taxpayer s name and address;

(b) The tax and tax periods for which amnesty is requested;

(c) The taxpayer’s tax identification number;

(d) Proof of dismissal with prejudice, acquittal, or discharge from civil or criminal litigation, when applicable; and

(e) The taxpayer’s signature certifying the truthfulness of the amnesty application representations.

4004.3 An amnesty application shall be postmarked or received by the last day of the amnesty period.

4004.4 The taxpayer shall submit the following with the application for amnesty:

(a) Previously unfiled returns or reports;

(b) Amended returns or reports; or

(c) Other reports as required pursuant to § 201 of the Act.

4004.5 The taxpayer shall pay the tax due and fifty percent (50%) of the interest due, except as provided in § 4000.5, on or before September 30, 1987, or as determined in § 4006 of this chapter.

4004.6 Payment shall be made by cashier’s check, certified check, money order, or cash.

4004.7 If the Office determines that a deficiency amount related to an amnesty return is due, the Office shall calculate the correct amount of tax and interest and bill the taxpayer. The taxpayer shall have fifteen (15) days from the date of the bill to complete amnesty payments with respect to the deficiency amount.

History

• SOURCE: Final Rulemaking published at 34 DCR 4091, 4096 (June 26, 1987).

9 DCMR § 4005 EFFECT OF AMNESTY

4005.1 Once amnesty is granted, all penalties and fifty percent (50%) of the interest otherwise due (as defined in § 4000.7 of this chapter), except as provided in § 4000.5, shall be waived and any civil, administrative, or criminal proceeding shall be barred relating to the designated tax and designated tax period.

4005.2 The waiver of penalties and prohibition against prosecution shall apply only to those amounts of tax, and tax periods, and interest for which amnesty was granted. Penalties shall be imposed and proceedings shall not be barred relating to any amount of tax later determined to be due in excess of the amnesty payments.

4005.3 Any criminal prosecution directly relating to the designated tax and designated tax period shall be barred once amnesty is granted. This includes applicable criminal offenses defined in either the Tax Law or the Criminal Laws of the District of Columbia (Title 22, D.C. Code, 1981 Ed.).

4005.4 A grant of amnesty to an applicant shall also bar any criminal prosecution for the designated tax and designated tax period against a responsible person, including an officer or employee.

History

• SOURCE: Final Rulemaking published at 34 DCR 4091, 4097 (June 26, 1987).

9 DCMR § 4006 INSTALLMENT PAYMENTS

4006.1 An amnesty installment payment plan shall be available if payment of the full tax and interest due pursuant to § 4004.1 of this chapter would create a severe financial hardship.

4006.2 To apply for installment payments, the taxpayer shall do the following:

(a) Submit a statement certifying that full payment would create a severe financial hardship; and

(b) Pay at least fifty percent (50%) of the computed liability upon application.

4006.3 The following payment terms shall apply:

(a) Fifty percent (50%) of the computed liability shall be due upon application, and the balance is to be paid in two (2) equal installments. Any unpaid balance of the computed liability shall bear interest until paid;

(b) The Office shall issue a Statement of Account at the end of the payment period (or at the end of the amnesty period, whichever is later) for any amount still due; and

(c) Failure to pay any amount of the computed liability when due may result in denial of amnesty.

History

• SOURCE: Final Rulemaking published at 34 DCR 4091, 4097 (June 26, 1987).

9 DCMR § 4007 REFUNDS OR CREDITS

4007.1 No refund or credit shall be granted of any penalty or interest paid prior to the time a taxpayer makes a timely request for amnesty. Whether a payment has been applied to penalty or interest shall be determined under the Office’s current procedures.

4007.2 No refund or credit shall be granted of any designated tax plus interest paid under amnesty, unless the Office determines that the refund or credit should be granted in order to correct a mathematical or data processing error on the amnesty application, return or report.

History

• SOURCE: Final Rulemaking published at 34 DCR 4091, 4098 (June 26, 1987).

9 DCMR § 4008 DENIAL OR REVOCATION OF AMNESTY

4008.1 Amnesty shall be denied in the following circumstances:

(a) The taxpayer is found to be ineligible; or

(b) The taxpayer fails to pay the designated tax and interest due.

4008.2 Unless the period of limitations for assessment and collection for the designated tax and designated tax period has expired, all payments made in connection with an amnesty application shall be final and shall not be returned upon a denial or revocation of amnesty. Payments made in connection with a denied or revoked amnesty application shall be credited to the taxpayer’s account.

History

• SOURCE: Final Rulemaking published at 34 DCR 4091, 4098 (June 26, 1987).

9 DCMR § 4009 CONFIDENTIALITY

4009.1 Tax amnesty applications shall be treated as part of the return or report of the designated tax for which it relates and the information shall not be disclosed except as provided under the tax law.

History

• SOURCE: Final Rulemaking published at 34 DCR 4091, 4098 (June 26, 1987).

9-41 TOLL TELECOMMUNICATION SERVICE TAX

9 DCMR § 4100 GENERAL PROVISIONS

4100.1 The provisions of this chapter shall govern the payment of the toll telecommunication service tax on a telecommunication company as defined in § 2(5) of the Toll Telecommunication Service Tax Act of 1989 (which is referred to in this chapter as the “Act”).

4100.2 The tax on a telecommunication company is at the rate of six and seven-tenths percent (6.7%) of the monthly gross charges from the sale of telecommunication service that originates or terminates in the District and for which a charge is made to a service address located in the District regardless of where the amount is billed or paid.

4100.3 When filing a written request for a hearing in response to the notice of tax deficiency determined under § 9 of the Act, the taxpayer shall make a statement as to the issues in dispute and submit the laws, regulations and facts in support of the taxpayer's contention on the disputed issues.

History

• AUTHORITY: Unless otherwise noted, the authority for this chapter is § 23 of the Toll Telecommunication Service Tax Act of 1989, D.C. Law 8-26, D.C. Code § 47-3901 (1981 Ed.).
• SOURCE: Final Rulemaking published at 36 DCR 2478, 2483 (April 7, 1989).

9 DCMR § 4101 MULTISTATE TAX CREDIT

4101.1 To prevent actual multi-state taxation of the sale of toll telecommunication service under the Act, the taxpayer, upon proof that it paid a properly due excise, sales, use, or gross receipts tax in another jurisdiction on a sale that is subject to taxation under this section, shall be allowed a credit for the amount paid against the tax, but in no event shall the credit permitted exceed the tax imposed on the sale under the Act.

Example: The taxpayer is able to show that excise and sales tax is required to be paid and has been remitted to four (4) states on gross charges subject to the tax imposed under this section as shown in Columns (1) through (5). A computation of the maximum allowable credit in this example is shown in Column (6).

4101.1 (Continued)

(1) (2) (3) (4) (5) 6)

State Gross Type Tax Amount of Credit

Name Charges Tax Rate Tax Paid Claimed

(1) $100.000 Sales 8% $8,000 $ 6,700

(2) 100,000 Sales 8% 8,000 6,700

(3) 100,000 Sales 4% 4,000 4,000

(4) 100,000 Excise 4% 4,000 4,000

Total Credit Claimed for the Month $21,400

4101.2 A taxpayer may be allowed an alternate method for reporting the credit upon showing to the satisfaction of the Mayor that it does not have the capability through reasonable measures to determine the credit in the manner provided in this section.

4101.3 The showing shall be made by a petition to the Mayor which includes the following information:

(a) The factual basis for the inability to determine the credit through reasonable measures in accordance with this section; and

(b) An alternate method of reporting the credit that the taxpayer believes is reasonable and equitable.

4101.4 Until such time as a separate line for reporting the credit appears on the monthly return, the credit shall be subtracted from the “Total Tax Due” line on the return, and the net amount shall be entered on the line designated “Total Amount Due” together with any late charges due as computed on net tax.

4101.5 The taxpayer shall indicate that a credit has been subtracted by writing or typing the words “credit claimed” on the line designated “Total Tax Due.”

History

• SOURCE: Final Rulemaking published at 36 DCR 2478, 2483 (April 7, 1989).

9 DCMR § 4102 ALTERNATE METHODS OF REPORTING

4102.1 The taxpayer subject to this section may be allowed an alternate method of reporting its monthly gross charges subject to the tax under this section upon showing to the satisfaction of the Mayor, before April 1, 1989, or thirty (30) days from the first day it becomes subject to this tax, whichever is later, or thirty (30) days from the first day a telecommunication company begins offering a new toll telecommunication service in the District, that it does not have the capability to identify the gross charges from the sale of toll telecommunication service that originates or terminates in the District and for which a charge is made to a service address located in the District regardless of where that amount is billed or paid.

4102.2 The showing shall be made by a petition to the Mayor which shall include the following information:

(a) The factual basis for the inability of the taxpayer to identify the gross charges, with supporting documentation; and

(b) An alternate method of reporting the gross charges that the taxpayer believes is reasonable and equitable.

4102.3 The Mayor is authorized to employ a reasonable and equitable alternate method for reporting the gross charges of the taxpayer based on information submitted pursuant to this section or based on any other information made available to the Mayor.

History

• SOURCE: Final Rulemaking published at 36 DCR 2478, 2484 (April 7, 1989).

9 DCMR § 4199 DEFINITIONS

4199.1 The terms and phrases defined in the Act shall have the same meanings when used in this chapter, unless otherwise required by the context of this chapter.

9-42 GENERAL ADMINISTRATION

9 DCMR § 4200 DECLARATORY ORDERS: PURPOSE, GENERAL RULE, AND DEFINITIONS

4200.1 Pursuant to D.C. Official Code § 2-508 (2011 Repl.), on petition of any interested person, the Chief Financial Officer may issue a declaratory order with respect to the applicability of any rule, regulation, Council act or resolution, or statute administered by the Office of Tax and Revenue, to terminate a controversy (other than a contested case) or remove an uncertainly.

4200.2 A petition for a declaratory order shall be filed in writing, clearly marked to indicate that it is being filed pursuant to this regulation. The petition shall:

Contain a detailed statement of the facts on which the petition is based;

Set forth fully the statutes, regulations, or judicial decisions relevant to the issue;

Pose the question of whether, and in what manner, the statutes, regulations, or judicial decisions apply to the petitioner under the facts outlined in the petition; and

Contain a statement describing the interest of the petitioner in making the request for the declaratory order.

The description shall:

Include a statement as to whether the declaratory order sought is intended to affect the tax consequences of any transaction or transactions entered into or contemplated by the petitioner, its vendors, customers, clients, or any other person upon whose request or upon whose behalf the declaratory order is sought, the taxability of which is known by the petitioner to be the subject of an inquiry, audit, refund, or assessment proceeding by the Office of Tax and Revenue; and

Contain an explanation of the circumstances surrounding the inquiry, audit, refund, or assessment proceedings, if any.

The Chief Financial Officer shall consider the petition and may, at the Chief Financial Officer’s discretion, issue the declaratory order requested. This determination to issue an order or not issue an order will be promptly communicated to the practitioner. The Chief Financial Officer may require argument on the petition. A declaratory order issued by the Chief Financial Officer shall be in writing and plainly state that it is a declaratory order issued pursuant to this chapter. A written answer from the Office of Tax and Revenue to an inquiry from a taxpayer may not be construed to be a declaratory order unless made in conformity with this regulation.

A declaratory order shall be binding between the Chief Financial Officer and the petitioner on the stated facts alleged, unless such order is altered or set aside by a court. The declaratory order shall be binding as to a transaction:

Entered into before the date of the declaratory order; or

In reliance upon the declaratory order, unless a change in the legal basis of the declaratory order is made by statute, regulation, or judicial decision after the issuance of the declaratory order and before any affected transaction.

The Chief Financial Officer will publish declaratory orders of general interest, subject to the protection of the identity of the petitioner and confidential information contained in the declaratory order. The requestor of the declaratory order may submit a redacted version of the order within thirty (30) days of the date of the declaratory order.

With prospective effect only, a declaratory order may be revoked, altered, or amended by the Chief Financial Officer at any time by written notice to the petitioner, and if the revocation, alteration, or amendment would concern an order that has been published, such revocation, alteration, or amendment shall also be published promptly.

History

• SOURCE: Notice of Final Rulemaking published at 59 DCR 2330 (March 23, 2012).

9-44 BULK SALES

9 DCMR § 4400 BULK SALES

4400.1 The term “assets” as used in D.C. Official Code § 47-4463 means without limitation, all assets, whether real or personal, tangible or intangible, including rights to property, of a business, that transfer to a purchaser, transferee or assignee in a single transaction or series of related transactions other than in the ordinary course of business.

Example 1: The sale of a hotel where the hotel owns the real estate being conveyed.

Assets shall include, without limitation, the real property, any licenses held by the hotel (such as a liquor license, franchise license, etc.), inventory, furnishings, equipment, materials or supplies, and flag or trademark.

Example 2: The sale of a restaurant where the restaurant leases the space it occupies.

Assets shall include, without limitation, any licenses held by the restaurant (such as a liquor license, franchise license, trademark, etc.), the leasehold or license interest (including renewals), inventory, furnishings, equipment, materials or supplies.

4400.2 For any tax determined to be due from the seller to the District of Columbia, failure to provide the notice as required pursuant to D.C. Official Code § 47-4461, or comply with the provisions of D.C. Official Code § 47-4462 and remit payment of taxes owed to the Office of Tax and Revenue (OTR), shall make the purchaser personally liable for payment to the District of Columbia of the taxes determined to be due from the seller to the extent of the fair market value of the assets transferred.

4400.3 Taxes that are subject to the notice required under D.C. Official Code § 47-4461 shall include all taxes or fees imposed by the District determined to be due from the seller, including, without limitation, sales, personal property, franchise, income, possessory interest, employment taxes and ballpark fees.

4400.4 Compliance with the provisions of D.C. Official Code §§ 47-4461 or 47-4462 shall not affect liability for taxes or assessments imposed on the real property of the seller, since such taxes or assessments are a lien against the real property under D.C. Official Code § 47-1331. OTR shall not be required to inform a purchaser of possible liabilities for any such real property taxes or assessments, or for taxes which are not administered by OTR. Real property taxes or assessments (if applicable) shall be stated on a Certificate of Taxes, issued pursuant to a proper request therefor, under D.C. Official Code § 47-405.

4400.5 The notice of bulk sale required pursuant to D.C. Official Code § 47-4461 shall be sent by registered or certified mail to Chief, Collection Division, Compliance Administration, OTR.

History

• SOURCE: Final Rulemaking published at 64 DCR 4995 (May 26, 2017). District of Columbia Municipal Regulations Taxation and Assessments 9 DCMR § 4400

9-99 DEFINITIONS

9 DCMR § 9900 GENERAL PROVISIONS

9900.1 The terms and phrases used in this title shall have the meanings set forth in this section unless the text or context of the particular chapter, section, subsection, or paragraph provides otherwise.

9 DCMR § 9901 DEFINITIONS: INCOME AND FRANCHISE TAXES

9901.1 The definitions in this section apply to the provisions of Chapter 1 of this title, “Income and Franchise Taxes.”

Allocated - (as used in reference to income and deductions from income) a determination based upon actual figures specifically applicable to income and deductions.

Apportioned - (as used in reference to net income) a ratable portion determined on a percentage basis.

Business income - income arising from transactions and activity in the regular course of the taxpayer’s trade, business, or profession; including income from tangible and intangible property if the acquisition, management, and disposition of the property constitute integral parts of the taxpayer’s regular trade, business, or professional operations. (Commissioners’ Order 65-742 and 30 DCR 1922)

Commercial domicile - the principal place from which the trade, business, or profession of the taxpayer is directed or managed. (Commissioners’ Order 65-742 and 30 DCR 1922)

Compensation - wages, salaries, commissions, and any other form of remuneration paid or accrued to employees for personal services. (Commissioners’ Order 65-742 and 30 DCR 1922)

Non-business income - all income other than business income. (Commissioners' Order 65-742 and 30 DCR 1922)

Sales - all gross receipts of a taxpayer not allocated in accordance with the allocation provisions of Chapter 1 of this title. (Commissioners' Order 65-742)

State - any state of the United States, the District of Columbia, the Commonwealth of Puerto Rico, any territory or possession of the United States, and any foreign country or political subdivision of a foreign country. (Commissioners' Order 65-742 and 30 DCR 1922)

Transportation Company - any person engaged in the transportation of persons or goods or property of others for hire. (30 DCR 1922)

9 DCMR § 9902 [RESERVED]

9 DCMR § 9903 DEFINITIONS: REAL PROPERTY TAXES

9903.1 The definitions in this section shall apply to the provisions of Chapters 3 of this Title.

9903.2 The phrase “dwelling unit” shall comprise one (1) or more habitable rooms comprising a complete, independent living facility for one (1) or more persons within a single household, and including within those rooms permanent provisions for living, sleeping, eating, cooking, and sanitation.

The term “cooking” shall comprise a cooking facility for the preparation and eating of meals. Such cooking facility shall include a permanently attached stove appliance that is a:

thermal oven; or

cooktop appliance with two (2) or more burners.

The power supply to the stove appliance shall be served by an electrical connection with minimum of 220-240 volts or a natural gas line. Notwithstanding the foregoing, the stove appliance shall not include a microwave or free-standing or “plug and go” countertop appliance.

9903.3 “Improvement” means a building or other relatively permanent structure located on or attached to land. The term improvement does not include fences, residential storage sheds or other similar structures, or brick or stone walls.

9903.4 Mixed Use Form - the phrase “mixed use form” refers to the form to be completed by an affected taxpayer setting forth the area in square feet, of each class of real property described herein and the total area in square feet, of all such classes and any other related or miscellaneous information sought by the Office.

9903.5 Mixed Use Property - the term mixed use property refers to the uses of real property in the District of Columbia which fall into more than one of the classes of real property defined in D.C. Code 47-813 and this section.

9903.6 “Reporting Period” means the affected taxpayer's most recently completed calendar year, whichever is applicable, at the time of submission of the form; provided that in the case of the mixed use determination, the DCFO may also request and consider information pertaining to the latest established uses.

9903.7 “Unimproved” means without improvements.

History

• SOURCE: Commissioner’s Order 65-742, issued June 3, 1965, 11 DCR 295 (June 7, 1965); Section 1 of the Third Amendment to the Revenue Act of 1975 Act, D.C. Law 1-61, 22 DCR 4383 (February 12, 1976); as amended by Final Rulemaking published at 27 DCR 1324 (March 28, 1980), incorporating text of Proposed Rulemaking published at 27 DCR 708 (February 15, 1980); by Final Rulemaking published at 28 DCR 2923 (June 26, 1981), incorporating text of Proposed Rulemaking published at 28 DCR 2161 (May 15, 1981); by Final Rulemaking published at 30 DCR 1922, 1925 (April 29, 1983); by Final Rulemaking published at 33 DCR 4119, 4121 (July 11, 1986); and by Final Rulemaking published at 37 DCR 5128, 5132 (August 3, 1990); as amended by Final rulemaking published at 73 DCR 010858 (July 31, 2026).