DC Economic Nexus Internet Sales Tax

Economic Nexus Laws by State: Washington D.C.

by Lizzy Greenburg

State laws on economic nexus vary and it’s hard to keep up if you’re doing business in multiple states. We’ve done the research for you and here’s all the information you need to know about economic nexus in Washington D.C..

What is economic nexus in Washington D.C.?

With the recent South Dakota v. Wayfair Supreme Court ruling in favor of South Dakota, states are now free to pursue sales tax from eCommerce businesses who have a “significant presence” in their state.

Significant presence or “nexus” was previously defined as having a physical presence (ex: brick and mortar store, employee, or inventory in a fulfillment center like FBA). But with this recent ruling, now this definition has been expanded to include economic activity in a state as well. This concept of triggering sales tax responsibility because of your economic activity in a state is now referred to as economic nexus.

Most important, this now means that if you pass a state’s economic threshold for total revenue in that state and/or number of transactions in that state, you’re now legally required to register, collect and remit sales tax for that state.

What’s the threshold for economic nexus law in Washington D.C.?

  • State: Washington D.C.
  • Threshold: Sales of $100,000 in Washington D.C., OR more than 200 transactions in the state in the previous calendar year.
  • Summary: According to state law, remote sellers in Washington D.C. who exceed the $100K gross sales or the 200 transactions number are required to register, collect sales tax on sales that ship to Washington D.C., and remit the sales tax to the state.
  • Full text: You can read guidance on the text of Washington D.C. economic nexus law here.

When did this Washington D.C. law go into effect or is it planned?

January 1, 2019

I meet the economic threshold requirement in Washington D.C.. Now what?

Here’s a quick checklist of what to do next:

  1. Register for a sales tax permit in Washington D.C. (info below)
  2. Choose a technology like TaxJar to help you manage multi-state compliance. Sign up for a free 30-day trial to see how we can help you save time!
  3. Connect TaxJar once to all of the places you sell
  4. Ensure all your eCommerce channels are setup correctly to collect sales tax
  5. Enroll in AutoFile and tell us how often you need to file
  6. Relax, you now handled your sales tax exposure.  We’ll handle the rest for you.

Can you help me register for a sales tax permit?

Certainly! TaxJar offers these two options:

  1. Read our do it yourself instructions for every state
  2. Visit TaxJar.com/register to have one of our expert partners do it for you (~$100 each state not including state’s fees)

Who can handle my Washington D.C. sales tax filings for me?

Your TaxJar Reports have the information you need to file your Washington D.C. returns and we show you how to do this here.

We don’t currently offer AutoFile for Washington D.C., but if you’d be interested in this feature, please email support@taxjar.com to let us know and we’ll be sure to reach out if we have an update about this in the future.

I’ve met this threshold in Washington D.C., now where can I ask questions?

We recommend speaking with a vetted sales tax expert to answer specific questions for your business.

And finally…I’m close to meeting this threshold for Washington D.C.. Will TaxJar notify me when I reach it?

Coming soon. We are working on a solution to provide notices for TaxJar customers when you meet a specific state’s economic nexus threshold, but it’s not ready just yet.

How you can prepare: make sure we’re able to get in touch with you

Do you have more questions on how economic nexus works after this ruling? Join the discussion and drop us a comment.

Start your 30 day free trial of TaxJar. No credit card required.

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