2023 District of Columbia Code › Title 47 - Taxation, Licensing, Permits, Assessments, and Fees. [Enacted title] › Chapter 1C - Tax Revision Implementation › § 47–181. Tax reform procedure and priority

§ 47–181. Tax reform procedure and priority.
(a) If local Fiscal Year 2016 recurring annual revenues included in the quarterly revenue estimate issued in September 2015 exceed the annual revenue estimate incorporated in the approved budget and financial plan for Fiscal Year 2016, the additional revenue shall be used to implement the provisions set forth in the Tax Revision Commission Implementation Amendment Act of 2014, effective February 26, 2015 (D.C. Law 20-155; 61 DCR 9990) (“TRC Act”), according to the priority set forth in subsection (c) of this section, for taxable years beginning or deaths occurring, as applicable, after December 31, 2015; provided, that the Chief Financial Officer shall recalculate the cost of the provisions of the TRC Act with the September 2015 estimate.
(b)(1) After the Fiscal Year 2016 budget and financial plan has been approved by the District, any recurring revenues in a February revenue estimate preceding any subsequent fiscal year, net of the dedication required by § 47-392.02(f), that exceed the local revenue incorporated in the approved budget and financial plan for that year shall be used to continue implementation of the TRC Act according to the priority set forth in subsection (c) of this section for taxable years beginning or deaths occurring, as applicable, after December 31 of the year of the applicable February estimate.
(2) If local Fiscal Year 2017 recurring annual revenues included in the quarterly revenue estimate issued in September 2016 exceed the annual revenue estimate incorporated in the approved budget and financial plan for Fiscal Year 2017, the additional revenue shall be used to continue implementation of the TRC Act according to the priority set forth in subsection (c) of this section for taxable years beginning or deaths occurring, as applicable, after December 31, 2016; provided, that the Chief Financial Officer shall recalculate the cost of the provisions of the TRC Act with the September 2016 estimate.
(c) The tax reform provisions of this section shall be implemented in the following priority:
(1) Reduce the rate on the new individual income tax middle bracket of $40,000 - $60,000 from 7.0% to 6.75%;
(2) Create new individual income tax brackets of $350,000 to $1 million at 8.75% and in excess of $ 1 million at 8.95%;
(3) Reduce the unincorporated and incorporated business franchise tax from 9.4% to 9.2%;
(4) Reduce the rate on the new individual income tax middle bracket of $40,000 - $60,000 from 6.75% to 6.5%;
(5) Reduce the unincorporated and incorporated business franchise tax from 9.2% to 9.0%:
(6) Raise the estate tax threshold from $1 million to $2 million;
(7) Raise the standard deduction from $5,200 for singles, $6,500 for Head of Household, and $8,350 for married to $5650 for singles, $7,800 for Head of Household, and $10,275 for married;
(8) Increase the personal exemption from $1,675 to $2,200;
(9) Raise the standard deduction from $5,650 for singles, $7,800 for Head of Household, and $10,275 for married to conform to the federal level;
(10) Increase the personal exemption from $2,200 to $2,700;
(11) Reduce the unincorporated and incorporated business franchise tax from 9.0% to 8.75%;
(12) Increase the personal exemption from $2,700 to $3,200;
(13) Raise the estate threshold from $2 million to the amount set forth at § 47-3701(14)(C);
(14) Reduce unincorporated and incorporated business franchise tax from 8.75% to 8.5%;
(15) Increase the personal exemption from $3,200 to $3,700;
(16) Reduce unincorporated and incorporated business franchise tax from 8.5% to 8.25%; and
(17) Increase the personal exemption from $3,700 to conform to the federal level, and repeal the low income credit.
(d) Unfunded provisions of the TRC Act shall not apply until their fiscal effect is provided for pursuant to this section.
(e) The cost of the tax policy reforms authorized by subsections (a) and (b) of this section shall be recalculated on an annual basis and reported in each February revenue estimate.
(Feb. 26, 2015, D.C. Law 20-155, § 7012(b), 61 DCR 9990; Oct. 22, 2015, D.C. Law 21-36, § 7033, 62 DCR 10905; Oct. 8, 2016, D.C. Law 21-160, § 7122, 63 DCR 10775; Oct. 30, 2018, D.C. Law 22-168, § 7232(a), 65 DCR 9388.)
Effect of Amendments
The 2015 amendment by D.C. Law 21-36 rewrote (a); substituted “has been approved by the District, any recurring revenues in a February revenue estimate” for “has been approved, any recurring revenues in a quarterly revenue estimate” in (b); substituted “$ 6,500” for “$ 6,650” in (c)(7); substituted “Raise the estate” for “Raise estate” in (c)( 13); and substituted “Unfunded provisions of the TRC Act” for “Except for those provisions of the TRC Act that are funded in the approved budget and financial plan for Fiscal Year 2015, the currently unfunded provisions of the TRC Act” in (d).
Applicability
Section 7233 of D.C. Law 22-168 provided that the amendment made to this section by section 7232(a) of D.C. Law 22-168 shall apply as of January 1, 2018.
Emergency Legislation
For temporary (90 days) amendment of this section, see § 7232(a) of Fiscal Year 2019 Budget Support Congressional Review Emergency Act of 2018 (D.C. Act 22-458, Oct. 3, 2018, 65 DCR 11212).
For temporary (90 days) amendment of this section, see § 7232(a) of Fiscal Year 2019 Budget Support Emergency Act of 2018 (D.C. Act 22-434, July 30, 2018, 65 DCR 8200).
For temporary (90 days) addition of this section, see § 7022(b) 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) addition of this section, see § 7012(b) 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, as enacted by D.C. Law 20-155, § 7012(b), see § 2(l)(1) of the Fiscal Year 2015 Budget Support Clarification Emergency Act of 2014 (D.C. Act 20-461, November 6, 2014, 61 DCR 11784, 20 STAT 4368).
For temporary (90 days) addition of this section, see § 7012(b) 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, as enacted by D.C. Law 20-155, § 7012(b), see § 2(l)( 1) of the Fiscal Year 2015 Budget Support Clarification Congressional Review Emergency Amendment Act of 2014 (D.C. Act 20-587, January 13, 2015, 62 DCR 1294, 21 STAT 758).
For temporary (90 days) amendment of this section, see § 7016(n) of the Fiscal Year 2016 Budget Support Emergency Act of 2015 (D.C. Act 21-127, July 27, 2015, 62 DCR 10201).
Temporary Legislation
For temporary (225 days) amendment of this section, see § 2(k) of the Fiscal Year 2015 Budget Support Clarification Temporary Amendment Act of 2014 (D.C. Law 20-179, March 7, 2015, 62 DCR 424).
Editor's Notes
The Tax Revision Commission Implementation Amendment Act of 2014, referenced in subsection (a)(2) of this section is subtitle B of title VIII of Law 20-155.