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Bankrate's 2009 Tax Guide
State tax pages
Take a state tax expedition. Each of the states has its own way of gathering revenues from its residents.
 
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State tax roundup
District of Columbia (Washington D.C.)


In 2006, Washington, D.C., reduced its tax rates and widened its top bracket. Income is taxed at rates of 4 percent, 6 percent and 8.5 percent. More on District of Columbia taxes can be found in the tabbed pages below.

Income
Sales
Property
Estate
Other
Personal income tax
Washington, D.C., collects income taxes from District residents utilizing three tax brackets:

-- 4 percent on the first $10,000 of taxable income
-- 6 percent on taxable income between $10,001 and $40,000
-- 8.5 percent on taxable income of $40,001 and above.

Income from Social Security and up to $3,000 of military retired pay, pension income or annuity income from D.C. or the federal government is excluded.
District of Columbia residents must file their tax returns by April 15, or the next business day if that date falls on a weekend or holiday.
Renters and homeowners who have taxable income of $20,000 or less may be eligible for a tax credit by filing Schedule H, included in the D-40 material. If you are not required to file a District of Columbia tax return, send in Schedule H alone to claim the credit.
Sales tax
The general consumer sales tax in the District of Columbia is 5.75 percent.
However, Washington, D.C., actually levies a sales tax with five different rates. This rate structure is utilized, in part, to take advantage of the district's special status as a tourist center and to increase the contribution of nonresidents working in the city. The current sales tax rates are:
  • 5.75 percent for tangible personal property
  • 9 percent for alcohol sold for off-premises consumption
  • 10 percent for restaurant meals, take-out food, rental cars and telephone calling cards
  • 12 percent for commercial parking
  • 14.5 percent for hotel and motel rooms.
Items exempt from the District of Columbia sales tax include groceries, prescription and nonprescription medicines, and residential utility services.
Personal and real property taxes
Property assessments are conducted by the Assessment Division, Real Property Tax Administration, Office of Tax and Revenue.
There are three classes of real property in the District of Columbia. Class 1 is residential real property including multifamily. Class 2 is commercial and industrial real property including hotels and motels. Class 3 is vacant real property. Owner-occupied residential property, known as Class 1 property, is taxed at a lower rate than property in other classes.
The tax rate is the amount of tax on each $100 of the assessed value of the property. Rates differ for each class of property. The rates are established by the Council of the District of Columbia and may change from year to year. Check current rates at the Office of Tax and Revenue Web site.
  Property tax bills are mailed twice a year. The first half of your bill is mailed in February, and the tax payment is due by March 31. The second half of your bill is mailed in August, and the tax payment is due Sept. 15. Penalties and interest are charged for late payments.
The District of Columbia offers several property tax relief programs to assist property owners and first-time home buyers. Popular property tax relief efforts also include a homestead deduction, tax credits for historic properties, senior citizen tax relief and property tax exemptions and deferrals. Check the link above for more details and eligibility requirements to claim these tax credits.
  A study of taxes nationwide found that almost 30 percent of all property in Washington, D.C., is exempt from property tax collection because it is owned or occupied by federal government or diplomatic offices.
Inheritance and estate taxes
The District of Columbia does not collect inheritance taxes.
The district's estate tax is decoupled from the federal estate tax laws and therefore still imposes its own estate tax. A D.C. Estate Tax Return (Form D-76 or D-76 EZ) must be filed if the gross estate is $1 million or more.
Other District of Columbia tax facts
Tax credits are available for Washington, D.C., businesses that provide employees paid leave to serve as organ or bone marrow donors. This nonrefundable credit equals 25 percent of the regular salary paid during the taxable year for the leave of absence.
The D.C. Earned Income Tax Credit has been expanded to non-custodial parents who meet certain conditions.
You can report vacant property to the Department of Consumer and Regulatory Affairs by calling (202) 442-4332 or by using an online form.
For more information, contact the District of Columbia Office of the Chief Financial Officer at (202) 727-2476 or at the Web site.
To download tax forms on this site, you will need to install a free copy of Adobe Acrobat Reader. Click here for instructions.
-- Updated: Feb. 2, 2009
   





 
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