District of Columbia – Reduced Tax Rate Notice

SALT Report 2999 – The DC Office of Tax and Revenue issued a notice that discusses the sales and use tax rate decrease that will go into effect on October 1, 2013.  On that date, the general rate of tax will be reduced from 6% to 5.75%.

The notice states that the tax on payments for rentals or leases of tangible personal property applies to each rental or lease period, regardless of the length of the lease, or the date the lease agreement was signed.  Because of this, payments for lease periods that occur prior to October 1, 2013 are subject to the 6% tax rate, and lease payments after October 1, 2013 will be subject to the 5.75% tax rate.

In addition, the tax rate applicable to the following transactions has not changed and are imposed as follows:

  • Prepaid telephone cards, rentals or leases of vehicles and utility trailers, food and beverages for immediate consumption, and liquor for off premise consumption – 10%
  • Parking – 18%
  • Other tobacco products – 12%
  • Transient accommodations – 14.5%
  • Medical marijuana – 6 %

For Further Information

District of Columbia Office of Tax and Revenue – OTR Tax Notice 2013-05