2023 District of Columbia Code › Title 47 - Taxation, Licensing, Permits, Assessments, and Fees. [Enacted title] › Chapter 18 - Income and Franchise Taxes › Subchapter VIII - Tax on Unincorporated Businesses › § 47–1808.03. Tax on unincorporated businesses — Levy and rates

§ 47–1808.03. Tax on unincorporated businesses — Levy and rates.
(a) Except as exempted under subchapter II of this chapter, for the privilege of carrying on or engaging in any trade or business within the District and of receiving income from sources within the District, there is levied:
(1) For 1 taxable year beginning after December 31, 1974, a tax at the rate of 12% upon the taxable income of every unincorporated business, whether domestic or foreign;
(2) For the taxable years beginning after December 31, 1975, a tax at the rate of 9% upon the taxable income of every unincorporated business, whether domestic or foreign, except that, effective October 1, 1984, the rate of tax shall be 10% upon the taxable income for any taxable period, except that for taxable years beginning after December 31, 1994, the rate of tax shall be 9.5%;
(3) For the taxable years beginning after December 31, 2002, a tax at the rate of 9.5% upon the taxable income of every unincorporated business, whether domestic or foreign;
(3A)(A) A surtax at the rate of 2.5% on the tax determined under paragraph (2) or (3) of this subsection, as applicable.
(B) Subparagraph (A) of this paragraph shall apply for any tax period beginning after September 30, 1992.
(3B)(A) A surtax at the rate of 2.5%, separate from and in addition to, the surtax imposed by paragraph (3A) of this subsection, on the tax determined under paragraph (2) or (3) of this subsection, as applicable, for any tax period beginning after September 30, 1994.
(B) Subparagraph (A) of the paragraph shall apply for any tax period beginning after September 30, 1994.
(4) For the taxable years beginning after December 31, 2003, a tax at the rate of 9.975% upon the taxable income of every unincorporated business, whether domestic or foreign;
(5) For the taxable year beginning after December 31, 2014, but before January 1, 2016, a tax at the rate of 9.4% upon the taxable income of every unincorporated business, whether domestic or foreign;
(6) For the taxable year beginning after December 31, 2015, but before January 1, 2017, a tax at the rate of 9.2% upon the taxable income of every unincorporated business, whether domestic or foreign;
(7) For the taxable year beginning after December 31, 2016, but before January 1, 2018, a tax at the rate of 9.0% upon the taxable income of every unincorporated business, whether domestic or foreign; and
(8) For taxable years beginning after December 31, 2017, a tax at the rate of 8.25% upon the taxable income of every unincorporated business, whether domestic or foreign.
(b) The minimum tax payable under this section shall be $250. If District gross receipts are greater than $1 million, the minimum tax payable shall be $1,000.
(July 16, 1947, 61 Stat. 346, ch. 258, art. I, title VIII, § 3; Aug. 2, 1968, 82 Stat. 612, Pub. L. 90-450, title II, § 202(b); Oct. 31, 1969, 83 Stat. 179, Pub. L. 91-106, title VI, § 604(a)(2); Dec. 15, 1971, 85 Stat. 654, Pub. L. 92-196, title IV, §§ 402, 404; Oct. 21, 1975, D.C. Law 1-23, title VI, § 604, 22 DCR 2112; July 27, 1976, D.C. Law 1-77, § 3, 23 DCR 1219; Mar. 16, 1978, D.C. Law 2-58, § 202, 24 DCR 5765; June 22, 1983, D.C. Law 5-14, § 903, 30 DCR 2632; Sept. 26, 1984, D.C. Law 5-113, § 302(b)(2), 31 DCR 3974; Oct. 1, 1987, D.C. Law 7-29, § 2(h)(3), 34 DCR 5097; July 25, 1989, D.C. Law 8-17, § 2(e), 36 DCR 4160; June 14, 1994, D.C. Law 10-128, § 103(d), 41 DCR 2096; Sept. 28, 1994, D.C. Law 10-188, § 301(b)(1), 41 DCR 5333; enacted, Apr. 9, 1997, D.C. Law 11-254, § 2, 44 DCR 1575; Oct. 20, 1999, D.C. Law 13-38, § 2702(j), 46 DCR 6373; Oct. 1, 2002, D.C. Law 14-190, § 802(d), 49 DCR 6968; June 5, 2003, D.C. Law 14-307,§ 1002(b), 49 DCR 11664; Sept. 14, 2011, D.C. Law 19-21, § 8072(b), 58 DCR 6226; Feb. 26, 2015, D.C. Law 20-155, § 7012(c)(9), 61 DCR 9990; Oct. 8, 2016, D.C. Law 21-160, § 7028(c)(5), 63 DCR 10775; Dec. 13, 2017, D.C. Law 22-33, § 7172(f), 64 DCR 7652.)
Prior Codifications
1981 Ed., § 47-1808.3.
1973 Ed., § 47-1574b.
Section References
This section is referenced in § 10-1203.07, § 32-241, § 47-340.26, § 47-1807.07, § 47-1808.04, § 47-1808.05, § 47-1808.08, § 47-1812.08, § 47-4215, and § 50-1501.02.
Effect of Amendments
D.C. Law 13-38 rewrote subsec. (a)(3) and repealed subsec. (a)(4).
Section 2702(j)(2)(B) of D.C. Law 13-38 provided: 'This paragraph shall be effective for tax years beginning after December 31, 2002.'
Section 2703(c) of D.C. Law 13-38 provided: “Section 2702(f), (h), (i), and (j) shall apply for tax years beginning after December 31, 1999.”
D.C. Law 14-190, in subsec. (a), rewrote pars. (3) and (4) which had read as follows:
“(3)(A) For the taxable years beginning after December 31, 2002, a tax at the rate of 9% upon the taxable income of every unincorporated business, whether domestic or foreign, except that for taxable years beginning after December 31, 2003, the rate of tax shall be 8.5%.
“(B) Subparagraph (A) of this paragraph shall not apply if the certification by the Chief Financial Officer required by 47-387.01 demonstrates that the accumulated general fund balance for the immediately preceding fiscal year is less than 5% of the general fund operating budget for the current fiscal year, the nominal GDP growth is less than or equal to 3.5% or the real GDP growth is less than or equal to 1.7%.”
‘(4) [Repealed].‘
D.C. Law 14-307, in subsec. (a), substituted “9.5%” for “9.0%” in par. (3), added pars. (3A) and (3B), and rewrote par. (4)(A) which had read as follows:
“(a)(4)(A) For the taxable years beginning after December 31, 2003, a tax at the rate of 8.5% upon the taxable income of every corporation, whether domestic or foreign.”
“(B) Subparagraph (A) of this paragraph shall not apply if:
“(i) The certification by the Chief Financial Officer required by § 47-387.01 demonstrates that the accumulated general fund balance for the immediately preceding fiscal year is less than 5% of the general fund operating budget for the current fiscal year, the nominal GDP growth is less than or equal to 3.5%, or the real GDP growth is less than or equal to 1.7%; or
“(ii) The Mayor demonstrates, and the Chief Financial Officer certifies, that a proposed budget will not be balanced as required by § 1-206.03(c) if the scheduled tax rate decrease under subparagraph (A) of this paragraph takes effect.”
D.C. Law 19-21, in subsec. (b), substituted “shall be $250. If District gross receipts are greater than $1 million, the minimum tax payable shall be $1,000.” for “shall be $100”.
The 2015 amendment by D.C. Law 20-155 added (a)(5) and (a)(6).
Cross References
Tax rate changes, authority of the Council of the District of Columbia, see § 47-504.
Washington Convention Center Authority, collection and allocation of taxes under this section, see § 10-1203.07.
Applicability
Section 7174 of Law 22-33 provided that the changes made to this section by Law 22-33 shall apply as of January 1, 2018.
Emergency Legislation
For temporary (90 days) amendment of this section, see § 7172(f) of Fiscal Year 2018 Budget Support Congressional Review Emergency Act of 2017 (D.C. Act 22-167, Oct. 24, 2017, 64 DCR 10802).
For temporary (90 days) amendment of this section, see § 7172(f) of Fiscal Year 2018 Budget Support Emergency Act of 2017 (D.C. Act 22-104, July 20, 2017, 64 DCR 7032).
For temporary (90 days) amendment of this section, see § 2(b) of Franchise Tax Clarification Emergency Amendment Act of 2016 (D.C. Act 21-402, May 19, 2016, 63 DCR 7923).
For temporary (90 day) amendment of section, see §§ 202 and 203 of Tax Parity Rates and Unincorporated Business Franchise Tax Rate Clarification Emergency Act of 2002 (D.C. Act 14-309, March 25, 2002, 49 DCR 3416).
For temporary (90 day) amendment of section, see § 1002(b) and 1003 of Fiscal Year 2003 Budget Support Amendment Emergency Act of 2002 (D.C. Act 14-544, December 4, 2002, 49 DCR 11700).
For temporary (90 day) amendment of section, see §§ 1002(b) and 1003 of the Fiscal Year 2003 Budget Support Amendment Congressional Review Emergency Act of 2003 (D.C. Act 15-27, February 24, 2003, 50 DCR 2151).
For temporary (90 day) amendment of section, see § 802(d) of Fiscal Year 2003 Budget Support Emergency Act of 2002 (D.C. Act 14-453, July 23, 2002, 49 DCR 8026).
For temporary (90 day) amendment of section, see §§ 1002(b) and 1003 of Fiscal Year 2003 Budget Support Amendment Second Congressional Review Emergency Act of 2003 (D.C. Act 15-103, June 20, 2003, 50 DCR 5499).
For temporary (90 day) amendment of section 8074 of D.C. Law 19-21, see § 2(b) of Revised Fiscal Year 2012 Budget Support Technical Clarification Emergency Amendment Act of 2011 (D.C. Act 19-157, October 4, 2011, 58 DCR 8688).
For temporary (90 days) amendment of this section, see § 7022(c)(9) of the Fiscal Year 2015 Budget Support Emergency Act of 2014 (D.C. Act 20-377, July 14, 2014, 61 DCR 7598, 20 STAT 3696).
For temporary (90 days) amendment of this section, see § 7012(c)(9) of the Fiscal Year 2015 Budget Support Congressional Review Emergency Act of 2014 (D.C. Act 20-449, October 10, 2014, 61 DCR 10915, 20 STAT 4188).
For temporary (90 days) amendment of this section, see § 7012(c)(9) of the Fiscal Year 2015 Budget Support Second Congressional Review Emergency Act of 2014 (D.C. Act 20-566, January 9, 2015, 62 DCR 884, 21 STAT 541).
For temporary (90 days) amendment of this section, see § 10(c) of the Fiscal Year 2016 Budget Support Clarification Emergency Amendment Act of 2016 (D.C. Act 21-292, Jan. 27, 2016, 63 DCR 1211).
Temporary Legislation
For temporary (225 day) amendment of section, see § 202(a) of Tax Parity Rates and Unincorporated Business Franchise Tax Rate Clarification Temporary Act of 2002 (D.C. Law 14-163, June 25, 2002, law notification 49 DCR 6499).
Editor's Notes
Expiration of §§ 301, 302 and 303 of D.C. Law 10-188: See Historical and Statutory Notes following § 47-1807.02a.
Mayor authorized to issue rules: Section 1102 of D.C. Law 5-14 provided that the Mayor shall issue rules necessary to carry out the provisions of the act.
Audit of accounts and operation of Authority: See Historical and Statutory Notes following § 47-1807.02a.
Expiration of §§ 301, 302 and 303 of D.C. Law 10-188: Section 2(l)(1) of D.C. Law 12-142 provided that § 306(a) of D.C. Law 10-188, providing for the expiration of that act, is repealed.
Section 1003 of D.C. Law 14-307 provided: “Sec. 1003. Applicability. Section 1002 shall apply as of January 1, 2003.”
Sections 8073 and 8074 of D.C. Law 19-21 provided:
“Sec. 8073. Rules.
“The Mayor, pursuant to Title I of the District of Columbia Administrative Procedure Act, approved October 21, 1968 (82 Stat. 1204; D.C. Official Code § 2-501 et seq.), may issues rules to implement the provisions of this subtitle.
“Sec. 8074. Applicability.
“This subtitle shall apply as of December 31, 2010.”
Delegation of Authority
Delegation of authority under Law 5-14, see Mayor’s Order 83-190, July 25, 1983.