Washington, D.C. raises sales tax rate on goods and services
Washington, D.C. is raising its sales tax rate from 6% to 6.5% soon on tangible goods and a wide list of taxable services (like data processing, information services, landscaping, and health clubs). If you sell into the District, this means higher effective costs for customers today—and another jump to 7% is coming in 2026.
Written by Alex Lamachenka
Head of DemandGen
Published
TL;DR:
If you sell goods or taxable services into Washington, D.C., your compliance exposure just went up. The sales tax rate increases to 6.5% on Oct 1, 2025, and to 7% on Oct 1, 2026.
What changed
- Current rule (through Sept 30, 2025): Sales tax in D.C. is 6% on tangible personal property and most taxable services.
- New rule (effective Oct 1, 2025): Rate rises to 6.5%.
- Future rule (effective Oct 1, 2026): Rate rises again to 7%.
D.C. applies sales tax to both goods and a wide range of services, including:
- Data processing
- Information services
- Health clubs and gyms
- Landscaping
- Real property maintenance
- Car wash services
- Security monitoring services
Who this affects
- Ecommerce sellers shipping to D.C.: All taxable sales into the District are now subject to the 6.5% rate.
- Service providers: If you provide taxable services into D.C. and exceed nexus thresholds, your compliance requirements increase.
- CPAs, controllers, finance teams: Budgets and forecasts should account for both the 2025 increase and the scheduled 2026 bump to 7%.
Why this matters
- Margins shrink: A 0.5% increase seems small but compounds for high-volume sellers.
- Taxable services hit harder: Many service categories that aren’t taxable elsewhere are taxable in D.C.
- Another increase is coming: Businesses must plan ahead for the second jump to 7% in 2026.
Next steps for sellers
- Review your product and service exposure in D.C.
- Update checkout systems and POS to reflect the 6.5% rate effective Oct 1, 2025.
- For taxable services, confirm whether your offerings fall under D.C.’s definitions.
- Factor in the 2026 jump to 7% when forecasting pricing and margins.
If you use TaxCloud
TaxCloud automatically tracks and applies D.C.’s rate increases. That means your invoices and filings will update without manual changes, keeping you compliant through both the 2025 and 2026 transitions.
Official sources:
- 1.
Disclaimer
TaxCloud provides sales tax compliance solutions. We do not provide legal or tax advice. For questions about your specific tax situation or filing requirements, we recommend consulting a qualified sales tax accountant.
Other US sales tax updates
New Maricopa Sales Tax Rate Takes Effect October 2025
Effective October 1, 2025, Maricopa’s city sales tax rate will increase by 0.50%, applying to both in-state sellers and remote sellers with nexus in Arizona.
Utah Eliminates 200-Transaction Nexus Threshold
Utah will repeal its 200-transaction economic nexus threshold effective July 1, 2025. Remote sellers and marketplace facilitators will only need to register for Utah sales tax if they exceed $100,000 in annual sales. Businesses selling into the state should update their compliance processes to track revenue only, as transaction counts will no longer apply.
Florida’s 2025 Back-to-School Sales Tax Holiday
Florida will hold its Back-to-School Sales Tax Holiday from August 1–31, 2025. During this time, shoppers won’t pay sales tax on clothing under $100, school supplies under $50, learning aids under $30, and personal computers up to $1,500. Online purchases also qualify if the order is placed during the holiday.