District of Columbia Tax Guide

State tax rates and rules for income, sales, property, fuel, cigarette, and other taxes that impact District of Columbia residents.

Bottom Line

Middle-Class Families: Tax-Friendly (Go to the Kiplinger Tax Map for Middle-Class Families)

Retirees: Most Tax-Friendly (Go to the Kiplinger Tax Map for Retirees)

From a tax standpoint, Washington, D.C., is generally a good place to live (if you can stand all the political talk, that is). The Nation's Capital has a progressive income tax structure that gets steep quickly, but the top rate of 10.75% is reserved for taxable income over $1 million.

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The sales tax of 6% is modest, and property taxes in the District of Columbia are well below average (the median property tax rate is tied for the 12th-lowest in the country).

D.C. does impose an estate tax, though.

District of Columbia Income Taxes

District of Columbia Income Tax Range

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

High: 10.75% (on taxable income over $1 million)

District of Columbia Taxation of Social Security Benefits

Social Security benefits are not taxed by the state.

District of Columbia Tax Breaks for Other Retirement Income

Tier 1 Railroad Retirement benefits are exempt.

District of Columbia Sales Tax

6% city sales tax.

  • Groceries: Exempt
  • Clothing: Taxable
  • Motor Vehicles: Exempt from ordinary sales tax, but taxable under special 6% to 8% excise tax
  • Prescription Drugs: Exempt

District of Columbia Real Property Taxes

In the District of Columbia, the median property tax rate is $552 per $100,000 of assessed home value.

District of Columbia Property Tax Breaks for Retirees

In the District of Columbia, the median property tax rate is $564 per $100,000 of assessed home value.

Homeowners 65 and older may be able to reduce their property tax by 50%. For 2023 property tax reductions, the total 2021 federal adjusted gross income of everyone living on the property, excluding tenants, must be less than $149,400.

Homeowners 65 and older whose adjusted gross income is less than $50,000 may qualify for property tax deferral.

In addition, if you're 65 or older, any property tax increase might also be capped at 2%.

Seniors age 70 and older also have a higher income threshold for claiming the homeowner and renter property tax credit on their D.C. income tax return (the 2022 credit is worth up to $1,250). For the 2022 tax year, residents 70 and older are eligible for the credit if their federal adjusted gross income is $78,600 or less. For younger residents, the threshold is $57,600 or less.

District of Columbia Motor Fuel Taxes

Gasoline: 34.2¢ per gallon.

Diesel: 34.2¢ per gallon.

District of Columbia Sin Taxes

Cigarettes: $5.02 per pack ($5.02 per pack effective October 1, 2022)

Other tobacco products: 80% of wholesale price

Vapor products: 80% of wholesale price

Beer: $0.09 per gallon

Wine: $0.30 per gallon ($0.40 if above 14% alcohol by volume; $0.45 for sparkling wine)

Liquor: $1.50 per gallon

Off-premises alcohol sales are taxed at 10.25% (10% for to-go sales or delivery with food).

District of Columbia Estate and Inheritance Taxes

For 2023, Washington, D.C., estates valued over $4,528,800 are subject to a city estate tax. Rates in 2023 range from 11.2% to 16%.

Rocky Mengle
Senior Tax Editor, Kiplinger.com

Rocky was a Senior Tax Editor for Kiplinger from October 2018 to January 2023. He has more than 20 years of experience covering federal and state tax developments. Before coming to Kiplinger, he worked for Wolters Kluwer Tax & Accounting and Kleinrock Publishing, where he provided breaking news and guidance for CPAs, tax attorneys, and other tax professionals. He has also been quoted as an expert by USA Today, Forbes, U.S. News & World Report, Reuters, Accounting Today, and other media outlets. Rocky has a law degree from the University of Connecticut and a B.A. in History from Salisbury University.