Washington D.C. Just Delayed Its 7% Sales Tax Again. The Rate Is Still 6%.
Washington D.C.'s sales tax is not 7%. It is 6%.
If you updated your systems for a D.C. rate change on October 1, 2026, set your rate back to 6%. The D.C. Office of Tax and Revenue (OTR) posted a notice that the October 2026 Sales and Use Tax increase has been postponed to October 1, 2027. The general sales tax rate remains 6% through September 30, 2027. dcdc
That notice did not get much attention. Many compliance guides, including several from major tax platforms, still showed 7% as the October 1, 2026 rate right up to the deadline. Some guides also list the current rate as 6.5%. That figure is wrong, and we published it ourselves. Businesses that followed those guides without checking OTR may now be over-collecting from D.C. buyers.
Here is what happened and what to do about it.
How D.C. Got Here: A Timeline of Rate Changes
D.C.'s general sales tax rate is 6%, and the planned increase to 7% has moved twice.
The 2024 plan: The Sales and Use Tax Amendment Act of 2024 scheduled a rate of 6.5% for periods beginning October 1, 2025 through September 30, 2026, and 7% for periods beginning October 1, 2026. dc
The first delay: In 2025, D.C. removed the 6.5% step. OTR's October 2025 notice said the general rate would remain 6.0% through September 30, 2026 and increase to 7.0% for periods beginning on and after October 1, 2026. dc
The second delay: The Council approved legislation delaying the increase until October 1, 2027. OTR now reports that the general rate remains 6% through September 30, 2027. wjla
The result: D.C.'s general rate is 6%. It did not change on October 1, 2026.
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What D.C. Is Considering Instead
The delay does not mean D.C. has stopped looking for revenue. As of September 23, WJLA reported that lawmakers were weighing several proposals. They include a new tax on certain high-end homes that are not someone's primary residence, a higher tax on investment income for some high-income residents, and an increase in the sales tax. One investment income proposal is a 3% surcharge for taxpayers earning more than $400,000, or married couples earning more than $500,000. wjla
WJLA reports that these proposals are separate from the already-delayed sales tax increase. The Council is expected to hold a major hearing on the revenue measures on October 16. wjla
What Businesses Need to Do Right Now
If you sell into D.C., check these items this week:
Set your D.C. general rate to 6%. This applies whether your system moved to 7% or 6.5%.
Review your transactions since the change. If your system applied 7%, you over-collected one percentage point on each taxable D.C. sale. If it applied 6.5% at any point, you over-collected half a point. Identify every affected transaction and calculate the total.
Decide how to handle the over-collection. Consider refunding buyers when the amount is material. Talk with your tax advisor about how to treat over-collected tax, since the right approach depends on your situation.
Check your tax software. Some platforms updated to 7% automatically. Confirm that your D.C. setting now shows 6%.
Set a reminder for September 2027. October 1, 2027 is the new target date for 7%, and further changes are possible. Verify the date before you update your systems.
The Broader D.C. Tax Picture
The sales tax delay is not the only D.C. tax story this fall. WJLA reports that D.C.'s unemployment rate was 5.7% in August and that the District faces ongoing budget pressures involving education, health care, and other city services. Those pressures drive the revenue debate described above.
For businesses with D.C. sales, particularly in retail, hospitality, SaaS, and digital services, the October 16 hearing is worth watching.
A correction: Our earlier coverage of D.C.'s rate described the current rate as 6.5% and said the increase would take effect October 1, 2026. The 6.5% figure was wrong, and the Council has since delayed the increase. We have updated that article.
Not sure your D.C. configuration reflects the 6% rate, or concerned about over-collection since your last change? Book a free consultation with our team at sales.tax. We will verify your D.C. rate setup and help you address any over-collection.
What this means for your business
If your sales into Washington have grown with prices, you may have crossed the economic nexus threshold without changing anything about how you sell. We’ll tell you where you stand in 30 minutes — and if there’s nothing to fix, we’ll say so.