DC Sales Tax 2025
District of Columbia Sales Tax Guide for SaaS and E-Commerce Businesses
2025-09-09
District of Columbia Sales Tax Guide for SaaS and E-Commerce Businesses
The District of Columbia imposes a Sales Tax on most goods and services, including SaaS and digital products, at a flat rate. Remote sellers meeting economic or physical nexus thresholds must register, collect, and remit DC sales tax.
Last updated: September 2025
Quick Reference: D.C. Sales Tax (2025)
| Topic | Details |
|---|---|
| General rate | 6.0% |
| Upcoming rate increase | 6.5% (starting Oct 1, 2025); 7.0% (starting Oct 1, 2026) |
| Economic nexus threshold | $100,000 in sales OR 200 transactions annually |
| SaaS / Digital products | Taxable at standard rate |
| Local rates | 0% |
| Filing frequency | Monthly, quarterly, or annually (assigned by OTR) |
| Filing due date | 20th of the month after reporting period |
| Registration portal | MyTax DC |
| Tax agency | D.C. Office of Tax and Revenue |
| Marketplace facilitator rules | Marketplaces must collect, but those sales still count toward nexus |
SaaS & Software Taxability in D.C.
The District of Columbia treats SaaS, digital goods, and cloud software as taxable services.
- SaaS (B2B and B2C): taxed at the standard sales tax rate (currently 6%).
- Digital downloads and media: taxable (e-books, streaming, apps).
- Custom software or professional services: may be exempt if clearly separated.
- Bundled offerings: taxable portion must be itemized, or the entire bundle may be taxed.
Official OTR guidance confirms that digital applications and software (whether canned, prepackaged, or customized) are taxable as data processing services under D.C. Mun. Regs. § 9-474.4.
- See: Taxation of Digital Goods in the District of Columbia (OTR, 2019)
- See also: Digital Goods Sales Taxability Chart (OTR)
E-Commerce & Goods Taxability
- Tangible goods — taxable at the standard rate (6% → 6.5% in Oct 2025).
- Shipping/delivery — generally taxable if tied to a taxable sale.
- Marketplace facilitator rules — Amazon, Shopify, Etsy, and others must collect tax, but their sales count toward your nexus thresholds.
Who Must Collect D.C. Sales Tax?
You must register if you meet any of these:
- Economic nexus: More than $100,000 in sales OR 200 transactions into D.C. (current or prior year).
- Physical nexus: Employees, offices, inventory, or contractors in D.C.
- Marketplace facilitator rules: Marketplaces collect on your behalf, but you may still need to register if you also make direct sales.
See official guidance: Marketplace Sellers FAQ — D.C. Office of Tax and Revenue
What’s Taxable in D.C.?
| Category | Taxable? | Notes |
|---|---|---|
| Tangible goods | Yes | General retail goods at the standard rate |
| SaaS & software | Yes | Standard rate applies |
| Digital products | Yes | E-books, streaming, downloads |
| Services | Some | Taxable if defined as data processing/digital |
Filing & Due Dates
Filing frequency: Assigned by OTR:
- Monthly
- Quarterly
- Annual (for small sellers)
Due date: Returns and payments are due by the 20th of the month following the reporting period.
Example: April sales → file and pay by May 20.
All filings and payments go through MyTax DC.
Penalties & Interest
- Late filing/payment penalty: Up to 5% per month of tax due (capped).
- Interest: Accrues daily until payment is made (OTR sets annual rates).
- Marketplace penalties: Additional fines may apply for failing to comply with marketplace facilitator rules.
(Exact penalty structures can be confirmed via OTR’s compliance publications.)
How to Register for D.C. Sales Tax
- Determine nexus (economic or physical).
- Register online through MyTax DC.
- Collect tax at the current rate (6% → 6.5% starting Oct 2025).
- File returns on your assigned schedule.
- Remit payments by the 20th to avoid penalties.
FAQs: D.C. Sales Tax
Is SaaS taxable in D.C.?
Yes, SaaS is taxable at the standard rate.
What is D.C.’s economic nexus threshold?
Either $100,000 in sales OR 200 transactions annually.
Does D.C. have local sales tax?
No, only a single District-wide rate applies.
When are returns due?
By the 20th of the following month.
Do marketplace sales count toward nexus?
Yes. Marketplace sales count toward thresholds even if the platform collects the tax.
Official D.C. Resources
- MyTax DC Portal
- Marketplace Sellers FAQ (OTR) — Economic Nexus & Marketplace Rules
- Taxation of Digital Goods in the District of Columbia (OTR Release, 2019)
- Digital Goods Sales Taxability Chart (OTR)
- D.C. OTR — Taxable & Non-Taxable Services
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