DC businesses are classified for tax purposes by entity type, with corporations paying an 8.25% franchise tax, unincorporated businesses paying a separate UBT, and most filers owing personal property and BBL fees.
Under DC Code 47-1807 (corporate franchise tax) and DC Code 47-1808 (unincorporated business tax), DC taxes corporations at 8.25% of DC-apportioned net income with a $250 minimum, while unincorporated businesses with gross receipts above $12,000 pay UBT at 8.25% subject to a salary allowance for owners. LLCs default to UBT unless they elect corporate treatment. Personal property tax under DC Code 47-1521 applies to tangible business assets at 3.4% above a $225,000 exemption. Every business also needs a Basic Business License from DLCP at category-specific fees.
Late filing or underreporting triggers OTR penalties up to 25%, monthly interest, BBL non-renewal, certificate-of-good-standing holds, and personal liability for responsible officers.
Washington, DC
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See how Washington's business tax classification rules stack up against other locations.
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