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


Kate Schubel
District of Columbia tax guide: overview
The District of Columbia has a mixed bag of tax benefits and drawbacks. On one hand, its progressive income tax structure gets steep rather quickly, but on the other, retirees will not have to pay tax on Social Security benefits. D.C. also boasts one of the lowest sales tax rates in the states.
However, high property tax bills are not uncommon, especially for heirs, as Washington, D.C. hosts one of the states with scary death taxes.
We'll dive into this diverse tax landscape to discover all that the Nation's Capital has to offer for current and prospective residents.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
[Data for this state tax guide was gathered from a number of sources including the Census Bureau, the state’s government website, the Sales Tax Handbook, and the Tax Foundation. Property taxes are cited as a rate percentage rather than the assessed value.]
District of Columbia income tax
The District of Columbia has a graduated individual income tax rate that ranges from 4% to 10.75%, according to the Tax Foundation.
District of Columbia taxes in retirement: Social Security retirement and Railroad Retirement benefits are tax-exempt in Washington D.C. However, military retirement pay is fully taxable.
District of Columbia sales tax
Washington, DC has a 6% city sales tax rate.
Source: Sales Tax Handbook
- Groceries: Exempt
- Prescription drugs: Exempt
- Clothing: Taxable
How much are property taxes in DC?
In the District of Columbia, the average effective property tax rate is 0.57%, which is lower than in most states. Even so, homeowners face high median property tax bills, due in part to high home prices.
District of Columbia Property Tax Breaks for Retirees
Homeowners of all ages might qualify for Washington D.C.'s homestead exemption, but eligible homeowners 65 and older may also be able to reduce their property tax by 50%. For 2025 property tax reductions, the total 2023 federal adjusted gross income of everyone living in the property, excluding tenants, must be less than $159,750. Applicants must also have at least 50% ownership of the property and reside at the property to qualify.
Washington DC gas tax
Gasoline: $0.24 per gallon.
Diesel: $0.24 per gallon.
Source: Sales Tax Handbook
District of Columbia taxes on alcohol and tobacco
District of Columbia tobacco taxes
Product | Tax Amount |
---|---|
Cigarettes | $2.50 per pack of 20 |
Other Tobacco Products | 67% of wholesale price |
Source: Sales Tax Handbook
District of Columbia alcohol taxes
Product | Tax Amount |
---|---|
Wine | $0.30 per gallon |
Beer | $0.09 per gallon |
Liquor | $1.50 per gallon |
Source: Sales Tax Handbook
District of Columbia estate and inheritance taxes
For 2025, Washington, D.C. estates valued over $4,873,200 are subject to a city estate tax. Rates in 2025 range from 11.2% to 16%.
Related Content
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Katelyn has more than 6 years of experience working in tax and finance. While she specialized in tax content while working at Kiplinger from 2023 to 2024, Katelyn has also written for digital publications on topics including insurance, retirement, and financial planning and had financial advice commissioned by national print publications. She believes knowledge is the key to success and enjoys providing content that educates and informs.
- Kate SchubelTax Writer
-
Avoid Capital Gains Tax? Trump's New Bill Offers Massive Incentive for Donors
Tax Policy As U.S. Senate Republicans mark up their version of the One Big Beautiful Bill Act, one provision could give some donors a major tax break.
-
2025 SALT Cap Could Hurt Top 'Hidden Home Cost'
Tax Deductions The latest GOP tax bill might make hidden homeowner costs worse for you. Here’s how.
-
2025 SALT Cap Could Hurt Top 'Hidden Home Cost'
Tax Deductions The latest GOP tax bill might make hidden homeowner costs worse for you. Here’s how.
-
Retire in the Bahamas With These Three Tax Benefits
Retirement Taxes Retirement in the Bahamas may be worth considering for high-net-worth individuals who hate paying taxes on income and capital gains.
-
2025 Virginia Tax Rebate Checks Coming Soon? What to Know Now
Tax Rebates Given a historic 2025 gubernatorial race, tax policy will remain a key issue for Virginians in the months ahead.
-
Summer Backyard Ideas With Added Tax Benefits for 2025
Tax Tips Find out how these summer 2025 home projects can help you save on taxes next year.
-
Coverdell ESAs vs. 529 Plans: Which Should You Choose?
Savings Accounts These savings accounts can offer tax benefits for school and retirement expenses. Here’s how.
-
Homeschoolers Could Soon Save on Expenses With 529 Plans
Savings Accounts A new House GOP bill could change how you save for your child's homeschool education. Find out how.
-
Five ‘Big Beautiful Bill’ Tax Changes to Watch in the Senate
Tax Policy The House passed its version of Trump’s "One Big, Beautiful Bill." Here’s what to look for as Senate Republicans take up the mega legislation.
-
New GOP Car Loan Tax Deduction: Which Vehicles and Buyers Qualify
Tax Breaks To fulfill Trump's campaign promise, House GOP lawmakers want to offer a tax deduction for car loan interest. How would it work?