Washington, DC sales tax filing update April 2019

What's changing in Washington, DC?

DC has enacted legislation for marketplace facilitators to collect and remit to the District sales tax for Washington, DC sales made on their marketplaces effective as of April 1, 2019.

  • Amazon, Etsy and Walmart began this collection on 4/1/19.
  • eBay began this collection on 5/1/19.
  • You can view the state's guidance document here.

How does this affect me?

If you sell through a marketplace that has agreed to begin collection in this state, you'll see sales tax collected in DC for sales on and after April 1, 2019 on your TaxJar Dashboard and on your DC Transactions page. (Filter by 'District of Columbia' and 'sales tax was collected.')

  • If you have never set up a filing frequency for DC in your account's State Settings, our system will default the state to a monthly frequency and due date on your Dashboard after we see tax collected there. (We default to a monthly frequency and due date if you haven't yet adjusted any frequencies on your end, but the state itself would ultimately determine your exact filing frequency.) 
  • If you are currently opted in to receive email reminders for your sales tax due dates, you'll also see DC listed as a state where you have an upcoming monthly return due in those emails.

I've never registered for a DC license. Do I need to register for a sales tax license in DC now?

  • If you are a retailer who has nexus in DC (more detail about this here), then you will need to register for a DC sales tax license.
  • If you have never registered for a sales tax license in DC and your only sales in DC are through a Marketplace that is automatically collecting and remitting DC sales tax on your behalf, you will still need to register, but you may wish to contact the Office of Tax Revenue for additional guidance regarding next steps for your business. (You can reach the Office of Tax Revenue by phone at 202-727-4829.)
  • If you do not meet any of the criteria that create nexus in DC, you won't need to register for a sales tax license in this state.

I have already registered for a license in DC but and all of my sales are Marketplace-only sales. Should I cancel my existing registration?

No. If you are a marketplace seller who is "engaged in business in the district" for any of the reasons that create nexus in DC you are required to register for a DC sales tax license and you should not cancel your registration.

Do I need to collect taxes on my DC sales on other platforms?

Yes--if you have nexus in this location and you make sales to customers in DC on platforms outside of the marketplace that is automatically collecting and remitting, you will also need to collect tax on your end on the DC orders that are processed on the other platforms.

Do I still need to file returns in DC?

Yes--once you register for a license, you will be required to file a return based on the frequency the state has assigned you.

I still need to file returns in DC. How do I do this without paying double tax on the sales that were collected and remitted by my marketplace?

When you file, you'll include your Marketplace sales in the Gross sales total. However, you will then need to exclude the Marketplace sales totals from the "Sales Taxable at 6%" line of the state's return form.
  • If all of your sales are Marketplace sales, once you deduct the marketplace sales, you will need to file a $0 return.

How does this affect my TaxJar report for DC?

Your TaxJar Report for Washington DC has been updated to reflect the sales that had tax collected and remitted by the carts listed above.