EXEMPT ORGANIZATIONS IN THE
DISTRICT OF COLUMBIA
The Office of Tax and Revenue (OTR), which is part
of the Office of the Chief Financial Officer,
administers District of Columbia taxes. To assist
non-profit organizations better understand their
responsibilities as an entity conducting business in
the District, OTR has prepared the following
information:
QUALIFYING FOR TAX-EXEMPT STATUS
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Most non-profit organizations which are recognized
by the Internal Revenue Service as tax exempt under
the Internal Revenue Code will qualify for exemption
under the District of Columbia Income and Franchise
Tax Act. The responsibility for establishing taxexempt status rests with the non-profit organization.
In order to establish tax-exemption status, an
organization is required to file a Form FR 164
(Application for Exemption) with the Office of Tax
and Revenue, Exempt Organizations, P.O. Box 556,
Washington, D.C. 20044. For additional information
on the District of Columbia’s tax-exemption policy for
non-profit organizations, you may contact Mbanefo
Vincent at (202) 442-6583, or via email at
[email protected] or Genevieve Menan at (202)
442-6442 or via e-mail at [email protected] or
via fax at (202) 442-6883,
FRANCHISE TAXES
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Corporations Organized Under Act of Congress.
Title Holding Corporation for Exempt Organization.
Religious, Educational, Charitable, Scientific, Literary, Testing for Public Safety, to Foster National or
International Amateur Sports Competition, or Prevention of Cruelty to Children or Animals Organizations.
Civic Leagues, Social Welfare Organizations, and Local Associations of Employees.
Labor, Agricultural, and Horticulture Organizations.
Business Leagues, Chambers of Commerce, Real Estate Boards, Etc.
Reserved.
Fraternal Beneficiary Societies and Associations.
Voluntary Employees’ Beneficiary Associations.
Domestic Fraternal Societies and Associations.
13. Cemetery Companies.
14. State Chartered Credit Union, Mutual Reserve Funds.
19. Post or Organizations of Past or Present Members of the Armed Forces.
25. Title Holding Corporations or Trusts with Multiple Parents.
26. Insurance companies, companies which guarantee the fidelity of any individual or individuals, such as
bonding companies which furnish abstracts of title or which insures titles to real estate, all of which pay
taxes on their gross earnings, premiums, or gross receipts under existing laws of the District.
Tax exempt organizations that have unrelated business income under the Internal Revenue Code are
subject to the District’s franchise tax on such income. Generally, unrelated business income and expenses
are apportioned under the three-factor formula, simple average rules.
PERSONAL PROPERTY
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The District personal property tax provisions refer to
organizations exempt from personal property taxes as
"semipublic institutions." Semipublic institutions are
corporations, community chests, funds or foundations
organized and operated exclusively for religious,
scientific, charitable, or educational purposes, i.e.,
501(c)(3) type organizations, no part of the net
earnings of which inures to the benefit of any private
shareholder or individual.
Non-profit organizations other than “semipublic
institutions’ are subject to the District’s Personal
Property tax on property located in the District.
Semipublic institutions that have unrelated business
income are subject to personal property tax to the
extent that such property is used to produce the
unrelated business income.
SALES TAXES
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The District sales tax provisions refer to
organizations exempt from sales taxes as
"semipublic institutions." Semipublic
institutions are corporations, community chests,
funds or foundations organized and operated
exclusively for religious, scientific, charitable, or
educational purposes, i.e., 501(c)(3) type
organizations, no part of the net earnings of
which inures to the benefit of any private
shareholder or individual. The semipublic
institution must have an office in the District of
Columbia.
SALES MADE TO SEMIPUBLIC INSTITUTIONS
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Purchases made by semipublic institutions are
exempt from District sales taxes if:
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The institution has first obtained an exemption
certificate and presents it at the time of sale;
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The vendor keeps a record of the sale including date,
name of purchaser and certificate number;
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The institution is located within the District and;
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The items purchased are used in furtherance of the
institution's purposes, i.e. not for personal use or later
resale.
SALES MADE BY EXEMPT ORGANIZATIONS
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Sales within the District by exempt organizations
which have an office or sales activities in the
District of Columbia are subject to District sales
taxes.
REAL PROPERTY TAXES
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Real property tax exemption does not follow the same rules as exemption from franchise,
personal property and sales taxes. Generally, property owned by some non-profit,
educational, charitable, and religious organizations may be exempt from real property.
The following real property is exempt from the District's real property taxes:
Property belonging to the U.S.
Property belonging to the District.
Property belonging to foreign governments that is used for diplomatic purposes.
Property belonging to the Commonwealth of the Philippines that is used for government
purposes.
Property specifically exempted from taxation by any special act of Congress in force
December 24, 1942, as long as it is used for the purposes for which is was exempted.
Art gallery buildings owned and operated by nonprofit organizations open to the public
generally, and admission to which is charged no more than twice a week.
Library buildings owned and operated by nonprofit organizations and open to the public
generally.
Buildings owned and operated by nonprofit institutions for purposes of public charity
principally in the District.
REAL PROPERTY TAXES (CONTINUED)
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Hospital buildings and structures owned and operated by nonprofit organizations.
Buildings owned and operated by nonprofit schools, colleges and universities that embrace the generally
recognized relationship of teacher and student.
Buildings owned and operated by organizations exempted by a special act of Congress.
Nonprofit cemeteries and associated structures used solely for burial purposes.
Church buildings and associated structures.
Buildings belonging to religious organizations primarily and regularly used for religious worship, study,
training, and missionary activities.
Residences of clergy owned by the church or congregation in which the member of the clergy officiates (only
one such residence per church or congregation).
Episcopal residences owned by a church used exclusively as a residence of a bishop of such church.
Headquarters buildings of organizations exempt from real property tax.
Grounds owned and used for carrying on the purposes of organizations exempt from real property tax.
Additional contiguous grounds owned by organizations exempt from real property tax as of July 1, 1942, and
not held for profit or sale (rather for enlargement or expansion).
Buildings owned, occupied and operated by nonprofit theater, music or dance organizations.
Certain qualifying multifamily and single family rental and cooperative housing for low and moderate
income persons.
Certain property transferred to a qualifying lower income homeownership household.
Certain property transferred to a qualifying nonprofit housing organization.
Certain qualifying supermarket developments.
Certain property transferred to a resident management corporation.
The Correctional Treatment Facility, while used as such.
REAL PROPERTY TAXES (CONTINUED)
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Additional code provisions grant real property tax
exemption to specific organizations generally falling
into one of categories described above. Organizations
must file an application for real property tax
exemption, except for real property described in items
1, 2, 3, 4, 5 and 11. An annual reporting is also
required, except for real property described in items
1, 2 and 3.
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In order to establish tax exemption, an organization
is required to file a Form FP 300 (Application for
Exemption from D.C. Real Property Tax) with the
Office of Tax and Revenue, Director for Real Property
Taxes, 1101 4TH Street SE, 5th Floor, Washington,
D.C. 20044. For additional information you may
contact Lisa Newman at (202) 442-7024 or Fax (202)
442-6796.
UNEMPLOYMENT INSURANCE
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For any information, please call (202) 698-3569
WORKERS’ COMPENSATION
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For any information, please call (202) 698-3569
EMPLOYER WITHHOLDING TAXES
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DC Income Tax withholding is required on all
employees who are District residents.
BALL PARK FEE
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Tax exempt organizations that have unrelated
business income under the Internal Revenue
Code are subject to the District’s ball park fee if
those organizations meet the ball park fee
threshold.