While it is not a state, Washington, D.C., actually the District of Columbia, is the capital of these United States, and it does make use of ‘Sales Tax’ in the same fashion the states we have studied make use of Sales Tax. On July 16, 1790, the Residence Act created the capital district in accordance with Constitutional provisions for a federal district under the exclusive jurisdiction of the Congress, the district was formed from lands donated by both the state of Maryland and state of Virginia. The district was then named in honor of our first president George Washington. The Greater Washington Metropolitan Area is the 7th-largest Metropolitan Area in the country, and is home to more than 6-million residents.
All three branches of our government are centered within the confines of D.C., the House of Representatives and Senate which make up the legislative branch, the Supreme Court which makes up the judicial branch, and the President residing in the ‘White House’ which makes up the executive branch. While the U.S. Congress has ‘supreme authority’ over the District, they have provided for the election of a mayor and 13-member governing council to be responsible for the day-to-day operations and that includes administration of Sales Taxes within the District.
The White House was built between 1792 and 1800, and President John Adams was the first resident occupant in 1800. Every U.S. President has since taken up residence during their terms of office. That same year (1800) the original portion of the U.S. Capitol building was completed, it has subsequently been expanded on several occasions including erection of the dome between 1855 and 1866. (Did you know that the ‘dome’ is actually ‘cast iron’ painted to appear as though it is made from the same stone as the building itself?)
The Supreme Court Building was not completed until 1935, prior to 1935 the Justices met in portions of the Capital building, and prior to 1810 the Supreme Court had no actual permanent meeting location. the Jefferson Memorial was not completed until 1943, it was part of President Franklin Roosevelt's’ New Deal projects as was the Supreme Court Building. The Lincoln Memorial was dedicated in 1922, and the 555 foot tall Washington Monument was finally completed in 1888 after several pauses in construction for funding, materials and the intervening Civil War. While portions of the National Mall existed prior to 1901, it was in that year that it became the vast open space and home of the reflecting pool, that would be central to the Capital and White House as well as other major memorials and monuments.
Each spring, thousands of 'additional' tourist visitors to the capital city come to see the Cherry Blossoms in bloom, clearly George Washington did not 'chop down' all the Cherry trees when he was a boy in the area.
Washington, D.C. Factoids:
- Washington, DC is technically neither a city nor a state. It is a federal district created specifically to be the seat of government. It was formed from land that was originally part of Maryland and Virginia.
- Even though more than 600,000 people live in Washington DC proper, they don’t get a vote in Congress. DC residents have representation, but the representative cannot vote and can only sit on committees.
- When there’s a presidential election, the Electoral College gives Washington, DC the same number of votes as the smallest state, even if it has a larger population.
- Woodrow Wilson is the only president buried in Washington DC.
- The Washington Monument was the tallest structure in the world until the Eiffel Tower opened in Paris.
- The Library of Congress is the largest library in the world. It was started from President Thomas Jefferson’s personal collection of 6,000 books and has grown to more than 160 million artifacts.
- Washington is named for the first U.S. president, George Washington and District of Columbia is named after Christopher Columbus. Ironically, George Washington never lived in DC. The White House was completed a year after he died.
- Baseball’s seventh inning stretch tradition got its start in Washington DC when President William Howard Taft got up to stretch his legs. Fans assumed he was leaving, so they also stood up as a sign of respect.
About Sales Taxes, as we approach our final week of this Series:
Thanks to Avalara, the 'tax people', this article is 49th in a 50 part series covering sales tax issues associated with each and every sales tax jurisdiction in the United States. We have been publishing a "Sales Tax Tuesday" article (almost) every week this year; and we will be publishing our final article in the series with a little about the states that don't make use of sales taxes.
But as for those jurisdictions that do make use of Sales tax it provides critical revenue for states, counties and cities, as well as the 'District of Columbia'. Other than property and income tax, sales tax is the largest source of tax revenue in the majority of the 46 jurisdictions that collect it. From a government perspective, making sure every sales tax dollar is collected, through audits, fines, penalties rates and rules, is an exercise for income. It’s easy to be lured into a false sense of compliance when it comes to sales tax, this series was written with the intention of helping insure that you are aware of the key sales tax facts for YOUR state.
Note: For sales tax definitions and essentials check out the opening article to this series.
Sales Tax Facts:
- Even though it’s technically not a state, Washington DC residents and businesses do pay federal and local taxes. DC’s sales tax rate is 5.75%. It is a single, district-wide sales tax that applies to tangible personal property and select services.
- Washington DC is a member of Streamlined Sales Tax (SST).
- Washington DC has 10% tax on liquor, restaurant meals and vehicles; an 18% tax for parking in commercial lots; and a 14.5% tax for hotels and short-term accommodations.
- Washington DC charges an 18% tax rate for parking in commercial lots. In April 2015, the mayor proposed increasing that to 22% for downtown parking garages. It’s believed that this tax will impact Virginia and Maryland commuters more than DC residents. The tax increase is expected to bring in an additional $10 million in revenue, which will be used to fund public transportation.
- Seven Maryland counties, five Virginia counties and five Virginia cities are considered part of the Washington, DC metropolitan area. This can make sales tax very confusing
Still on the books...
‘Yoga tax’ a stretch? When Washington DC lawmakers extended sales tax on services in January 2015 to include fitness centers, some business balked – most notably yoga studios – believing they should be exempted. But the District remained dogged in its stance and the so-called “yoga tax” still stands.
No waltzing around it. Men in Washington DC will have to dance around the law if they want a female partner to teach them the moves. According to DC doctrine, “Women cannot be employed to dance with men.” Dance lessons are tax exempt services. But you’ll have to be a fast learner. Another archaic law prohibits anyone from dancing for more than 12 hours in a 24 hour period.
Avalara new
Manual sales and use tax management is prone to errors. Sales tax collection, accounting, remittance and reporting also consumes valuable staff time in what can only be described as pass-through rather than revenue-generating activities. But there is an easier way, Avalara provides solutions for sales tax automation, including tax calculation, exemption certificate management, returns processing and 1099 filing and reporting. Automation via AvaTax allows businesses to be fully sales tax compliant without sacrificing productivity.