State tax rates and rules for income, sales, gas, property, cigarette, and other taxes that impact middle-class families. Go to the Kiplinger Tax Map District Of Columbia Add to State Compare List | View List View State Compare List (0) selected | Compare up to 5 The Bottom Line Tax-Friendly The Nation's Capital has a progressive income tax structure that gets steep quickly. Taxable income over $40,000 is taxed at 6.5% or more, though the top rate of 8.95% is reserved for taxable income over $1 million. The sales tax of 6% is modest, and property taxes are well below average. Income Tax Range Low: 4% (on taxable income up to $10,000)High: 8.95% (on taxable income over $1 million)Beginning in 2022, the highest rate will be 10.75% on taxable income over $1 million. Sales Tax 6% city sales tax.Groceries: ExemptClothing: TaxableMotor Vehicles: Exempt from ordinary sales tax, but taxable under special 6% to 8% excise taxPrescription Drugs: Exempt Real Property Taxes In the District of Columbia, the median property tax rate is $575 per $100,000 of assessed home value. Motor Fuel Taxes Gasoline: 33.8¢ per gallon. Diesel: 33.8¢ per gallon. Sin Taxes Cigarettes: $5.01 per packOther tobacco products: 80% of wholesale priceVapor products: 80% of wholesale priceBeer: $0.09 per gallonWine: $0.30 per gallon ($0.40 if above 14% alcohol by volume; $0.45 for sparkling wine)Liquor: $1.50 per gallonOff-premises alcohol sales are taxed at 10.25% (10% for to-go sales or delivery with food). Annual Car Taxes and Fees No annual vehicle tax or fee is imposed. Estate and Inheritance Taxes For 2022, Washington, D.C., estates valued over $4,254,800 million are subject to a city estate tax. Rates in 2022 range from 11.2% to 16%.