Sales tax on invoices in the District of Columbia

D.C. sales tax for contractors: materials taxed when sold to you, taxable maintenance and landscaping, untaxed major repairs, and a postponed rate change.

Statewide rate

6%

Source

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In the District of Columbia, materials that become part of real property are taxed when they’re sold to the contractor. Real property maintenance and landscaping are taxable services, but painting, wallpapering and other services performed as part of construction or as a major repair aren’t maintenance.

A tax on vendors, and the FR-500

D.C. Code § 47-2002 imposes the sales tax on vendors, for the privilege of selling certain tangible personal property and certain selected services at retail. To register a new business with the Office of Tax and Revenue (OTR), complete Form FR-500, New Business Registration, with the address of every location where you’ll collect sales tax in the District. If you need a business license from DLCP, register with DLCP first, then complete the FR-500, then go back to DLCP for the license.

Materials: taxed when they’re sold to you

Under D.C. Code § 47-2001, selling materials used to construct, repair or alter real property, which become real property when the work is done, is a retail sale, whether or not the property is to be sold. So the District’s tax applies when the materials are sold to you, the contractor. Materials bought to be taken out of the District for use solely outside it are excluded.

For a construction contract with the United States or District governments or their instrumentalities, or with a semipublic institution holding a valid exemption certificate, get a Contractor’s Exempt Purchase Certificate by filing Form OTR-553 on MyTax.DC.gov. It’s valid only for the period of that exempt project, and if you don’t present it to the vendor, the vendor collects the tax.

Maintenance is taxable; major repairs aren’t

OTR taxes a listed set of services, including real property maintenance, landscaping, data processing, information services, car washing, security guard services, and health-club services. Its list of examples isn’t all-inclusive.

Real property maintenance is any activity that keeps land or a building clean, orderly and functional, including minor adjustments, maintenance or repairs. It covers:

  • floor, wall, ceiling and window cleaning, exterior building cleaning, and restroom cleaning and stocking;
  • pest control, and servicing in-ground and in-building swimming pools;
  • parking lot, garage and recreation area maintenance, trash removal (except removing recyclable material you can show is returned into commerce or sold to a recycler), and ground maintenance;
  • lighting maintenance, and chimney and duct cleaning.

It doesn’t include painting, wallpapering or other services performed as part of construction or as a major repair. OTR’s examples of non-taxable services include major repair services such as waterproofing, caulking, masonry repair and building inspection, and striping work such as pavement patching, asphalt repair, sealing and seal-coating. So in the District the same trade can bill a taxable minor repair on one job and a non-taxable major repair on another.

Trades OTR names as taxable

  • Landscaping: arranging or modifying land and natural scenery for an improved or aesthetic effect; adding, removing or arranging natural forms, features and plantings; and adding, removing or modifying retaining walls, ponds, sprinkler systems or other landscape construction.
  • Lawn care: mowing is among OTR’s examples of taxable maintenance, and ground maintenance is in the definition.
  • Cleaning: OTR’s taxable examples include janitorial cleaning, building and window cleaning, wall and house washing, floor cleaning and waxing, carpet and rug cleaning, and cleaning before and after moving or construction.
  • Pressure washing is on the same list of taxable examples.
  • HVAC: furnace and A/C cleaning and lubricating is taxable maintenance, and so is chimney and duct cleaning.

Your invoice: adding the tax to the price

D.C. Code § 47-2003 has you, the vendor, collect reimbursement for the tax from the purchaser on all taxable sales, so far as it can be done; that reimbursement is a debt the purchaser owes you, recoverable at law. Section 47-2004 says you add to the sales price, and collect from the purchaser, the amounts the Mayor prescribes. If you collect more than the reimbursement schedule provides, refund the excess to the purchaser, or it becomes a debt you owe the District.

On major repair services and the others OTR lists as non-taxable, such as striping, there’s no sales tax to add to your bill for the service. Construction and major repairs aren’t maintenance, but landscaping is taxed even when it’s construction work, such as adding retaining walls, ponds or sprinkler systems.

Watch-out: the postponed rate change

OTR says the October 2026 sales and use tax increase has been postponed to October 1, 2027, and that the general rate, the one on this page, applies until September 30, 2027. The codified text of D.C. Code § 47-2002 still shows the increase starting on October 1, 2026. Check OTR’s site for the current rate before you bill.

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