Key figures
District of Columbia receivables
2026, with sources
SaaS is in the base
DC’s sales tax applies to tangible goods and to a list of services, two of which reach software companies: digital goods, defined to include digital applications and other goods delivered electronically, streamed or accessed, whether bought singly or by subscription, and data processing and information services. The statute defines data processing to include providing access to computer systems, computerized data storage and manipulation, payroll and business accounting, and any system or application programming or software.
Taken together, most SaaS sold to DC customers is taxable at 6%. Services provided by one member of an affiliated group to another for expense allocation are excluded from data processing.
Nexus, rate and filing
A remote seller registers with OTR once it has more than $100,000 of gross receipts from retail sales delivered into DC, or more than 200 separate retail sales delivered into DC. The general rate is 6%: an increase to 7% was enacted for October 1, 2026 and then postponed, and OTR now says 6% applies through September 30, 2027. Returns are due on the 20th of the month after the filing period, which OTR assigns as monthly, quarterly or annual.
An example: a SaaS company sells $15,000 a month to 40 DC businesses. At $180,000 a year it has DC nexus, collects $900 a month in DC sales tax, and files on the schedule OTR assigns.
On the books
Collected DC tax is a liability, not revenue, and a rate change would reach every renewal billed after it takes effect, so the billing system should hold the rate as data rather than as a constant. Customer credit balances that go unclaimed are reportable to DC’s unclaimed property unit for customers with DC addresses.
The federal baseline
This page covers what District of Columbia adds. The federal rules underneath it apply here too.
Common questions
Is SaaS taxable in DC?
In most cases. DC taxes digital goods, including those accessed by subscription, and data processing and information services, which the statute defines to include the provision of access to computer systems, computerized data storage and manipulation, and any system or application software. Most SaaS falls into one or both categories and is taxed at 6%.
Has DC’s sales tax gone up to 7%?
No, not yet. DC scheduled an increase to 7%, but it has been postponed: the general rate remains 6% through September 30, 2027.
Receivables next door
- MDMaryland receivablesSince July 2025 Maryland taxes SaaS: 3% when sold for use in a business’s systems, 6% for individual use. Remote sellers register at $100,000 or 200 transactions.
- VAVirginia receivablesVirginia doesn’t tax SaaS or other software delivered over the Internet. Sales tax runs 5.3% to 7% by locality, and remote sellers register at $100,000 or 200 transactions.
Founder guides on this
- Sales taxSales tax nexus for startups: when you owe tax in a stateSince Wayfair, selling into a state can create a sales tax obligation. How economic nexus works, why SaaS is taxable in some states and when to register.
- StripeHow to reconcile Stripe payouts to your booksA Stripe payout is charges less fees, refunds and disputes, batched across days. How to book it gross, tie it to the bank, and keep revenue right.
- RevenueDeferred revenue for SaaS startups, explainedAn annual prepayment is cash today and revenue over a year. How deferred revenue works under ASC 606, why it’s a liability, and the schedule behind it.
More of the District of Columbia guide
- AccountingAccounting and state tax in District of ColumbiaCorporate tax, conformity to federal rules, apportionment and what it does to your books
- PayablesPayables and contractors in District of ColumbiaPaying vendors and contractors: 1099 filing, use tax, contractor tests and withholding
- PayrollPayroll taxes and employer rules in District of ColumbiaWithholding, unemployment insurance, paid leave, minimum wage and the rules on paydays
- ComplianceCompliance and filings in District of ColumbiaRegistering to do business, annual reports, franchise tax and the filing calendar
- AdvisoryAdvisory: credits and decisions in District of ColumbiaCredits, incentives and the decisions that are cheaper to get right the first time
Sources
Checked against each agency’s own page on . Rates and thresholds change, usually on January 1.
General information for US companies, not tax, legal or accounting advice for yours. Rules and thresholds change; confirm the specifics with a CPA or the agency before you act on them.