Tool | August 2016

State-by-State Guide to Taxes

Compare state tax rates and rules -- on income, ordinary purchases, gas, "sin" products, property, and more -- across the U.S.

District Of Columbia

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The Bottom Line
Map of District Of Columbia

Not Tax-Friendly

Living in the Nation's Capital can be expensive. Though property and sales taxes are unexceptional, the District of Columbia takes a big bite of incomes. Income over $40,000 is taxed at a steep 6.5% tax rate (the top rate of 8.95% is reserved for taxable income over $1,000,000).

Sales Tax

5.75% (food, prescription and nonprescription drugs, and residential utility services are exempt).

Income Tax Range

Low: 4% (on taxable income up to $10,000)

High: 8.95% (on taxable income above $350,000)

See Kiplinger.com’s Retiree Tax MapMap to learn how the District of Columbia taxes Social Security income and other forms of retirement income.

Motor Fuel Taxes

Gasoline: $0.24 per gallon.
Diesel: $0.24 per gallon.

Property Taxes

Median property tax on District of Columbia's median home value of $486,900 is $2,614.

See Kiplinger.com’s Retiree Tax Mapfor details on tax breaks for seniors in the District of Columbia.

Vehicle Taxes

Drivers pay an excise tax — when a new vehicle is first registered in the District — that ranges from 6% to 8%, depending on the vehicle’s weight.

Sin Taxes

Cigarettes and little cigars: $2.50 a pack
Snuff: $0.75 per ounce
Chewing tobacco: 12% of retail price
Loose smoking tobacco: 12% retail (not pipe tobacco)
Cigars: 12% retail for cigars less than $2


Beer: $0.64 per gallon
Wine: $1.72 per gallon
Liquor: $5.69 per gallon
e-cigarettes: 70% of wholesale.

Travel Taxes

Hotel: D.C. charges a 14.5% lodging tax for hotels and transient accommodations in lieu of sales tax.

Rental cars: The District levies a 5.75% tax on rental cars, and sales tax is also collected. Commercial parking is taxed 18%.

Taxes On Wireless Service

11.6%

Inheritance and Estate Taxes

There is no inheritance tax. Estates valued over $1 million are subject to estate tax. Starting in 2016, the exemption could have risen to $2 million, but additional revenue targets were not met. Once these targets are met, the exemption will increase. The exemption may gradually rise to match the federal exemption level, (possibly in 2018), but again the change will only occur if revenue targets are met. The top estate tax rate is 16%.

Oddball Tax

Businesses in the District that sell food or alcohol are required to charge a 5-cent fee for each paper or plastic disposable bag they give to a customer. The store gets to keep a penny, and the balance goes to a government fund dedicated to cleaning up the Anacostia River.

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