D.C. Mun. Regs. tit. 9, r. 9-417

Current through Register Vol. 71, No. 35, August 30, 2024
Rule 9-417 - CERTIFICATES OF EXEMPTION
417.1

All sales of tangible personal property or of taxable services are presumed not to be exempt from sales and use tax. The burden of proving that a sale of tangible personal property or taxable services is not a sale at retail is upon the vendor unless the vendor timely accepts in good faith a certificate from the purchaser that the sale is exempt from tax.

417.2

Vendors shall exercise reasonable judgment in accepting exemption certificates in good faith and shall not be protected from paying sales tax on the items purchased with exemption certificates that are not exempt from tax if they fail to do so. Accepting an expired exemption certificate demonstrates bad faith by a vendor.

417.3

If the purchaser is the United States, the District of Columbia, or any instrumentality of either, the vendor shall show on the record of sale the instrumentality or agency to which the sale was made, the amount of the sale, and date of the sale.

417.4

If a purchaser of tangible personal property is a member of a foreign diplomatic corps and personally presents an identification card issued to that purchaser by the State Department, exempting the person from excise taxes, the card shall be authority for the vendor not to add reimbursement for the sales tax to the sales price of the property; Provided, that the vendor shall show on the record of each sale the name of the purchaser, the date of sale, the amount of the sale, and the State Department identification card number.

417.5

A certificate of exemption shall be effective on the date of issuance. No person shall be issued a refund, based upon a certificate of exemption, for sales taxes paid prior to the date of issuance of the certificate of exemption.

417.6

Each certificate of exemption shall be maintained by the vendor and shall be authority for the vendor not to add reimbursement for the sales tax to the sales price of the property or service. A vendor shall also maintain a record of the name of the purchaser, the date of each sale, and the amount of the sale for each exempt sale.

417.7

A vendor has ninety (90) days from the date requested in which to deliver the certificates of exemption to the Office of Tax and Revenue. Exemptions claimed by those certificates acquired during this 90-day period shall be subject to independent verification by the Office of Tax and Revenue before the deductions shall be allowed. Certificates delivered after the 90-day period shall not be accepted.

417.8

Exemption certificates are nontransferable and are valid for use only by the person or entity to which the certificate has been issued.

417.9

Exemption Certificate for Semipublic Institutions .

(a) A semipublic institution purchasing property at retail for its own maintenance and operation shall obtain from the Deputy Chief Financial Officer a certificate of exemption stating that the institution is entitled to the exemption. If the semipublic institution does not present the certificate of exemption to the vendor, the vendor shall collect the reimbursement for the tax.
(b) Beginning with exemption certificates issued after November 1, 2017, exemption certificates issued to semipublic institutions, except as provided in Subsection 417.9(c), shall be valid only for a period of five (5) years from the date issued.
(c) Beginning with exemption certificates issued on or after November 1, 2017, exemption certificates issued to an exempt entity organized exclusively for religious purposes shall be valid only for a period of up to ten (10) years from the date issued.
(d) Exemption certificates issued to semipublic institutions prior to November 1, 2017, shall expire upon notice by the Office of Tax and Revenue. Vendors are responsible for ensuring that exemption certificates issued to semipublic institutions prior to November 1, 2017 are still valid and unexpired at the time of acceptance.
(e) If a vendor makes sales to a semipublic institution, the vendor shall keep a copy of the certificate of exemption, the name of the purchaser, the date of each sale, and the amount of the sale.
(f) In order to receive an exemption certificate, a semipublic institution shall follow the Office of Tax and Revenue's electronic application process.
(g) All exemption applications filed by semipublic institutions shall include, but are not limited to , the following information:
(1) Taxpayer ID Number;
(2) Name;
(3) Address;
(4) Sales Tax Account Number;
(5) NAICS Code;
(6) Federal Exemption Status;
(7) Proof of IRS exemption (e.g ., IRS Determination Letter or Application for Recognition of Exemption);
(8) Organizational details; and
(9) Information regarding activities and locations in the District.
417.10

Exemption Certificate for Qualified High Technology Companies.

(a) A qualified high technology company purchasing computer software or hardware, and visualization and human interface technology equipment, including operating and applications software, computers, terminals, display devices, printers, cable, fiber, storage media networking hardware, peripherals, and modems when purchased for use in connection with the operation of the Qualified High Technology Company shall obtain from the Deputy Chief Financial Officer a certificate of exemption stating that the company is entitled to the sales tax exemption.
(b) Beginning with exemption certificates issued after November 1, 2017, exemption certificates issued to Qualified High Technology companies through an annual certification process shall be valid until the expiration date stated on the certificate.
(c) Exemption certificates issued to Qualified High Technology Companies prior to November 1, 2017 shall not be accepted to prove that a sale is exempt from tax after January 31, 2018.
(d) All exemption applications filed by qualified high technology companies shall include, but are not limited to, the following information:
(1) Taxpayer ID Number;
(2) Name;
(3) Address;
(4) Sales Tax Account Number;
(5) NAICS Code;
(6) Information demonstrating QHTC eligibility;
(7) First year certified as QHTC;
(8) Explanation of principal business activity;
(9) Amount of QHTC Exempt Sales/Purchases from the prior year (broken down by period);
(10) Number of QHTC employees hired;
(11) Number of QHTC employees hired who are District residents;
(12) Number of QHTC jobs created in the past year;
(13) Gross revenue ; and
(14) Gross revenue earned from QHTC activities in the District.
417.11

Exemption Certificate for Natural or Artificial Gas, Oil, Electricity, Solid fuel, or Steam.

(a) Except as otherwise provided in this section, each purchaser of natural or artificial gas, oil, electricity, solid fuel, or steam for any purpose exempt from sales tax under D.C. Official Code §§ 47 -2005(11) or (11A), in order to qualify for the exemption, shall present evidence satisfactory to the Deputy Chief Financial Officer that the sale is exempt under the Act and this subsection, and shall obtain from the Office of Tax and Revenue a Utility exempt certificate to be presented to the vendor.
(b) Beginning with exemption certificates issued after November 1, 2017, exemption certificates issued to purchasers of natural or artificial gas, oil, electricity, solid fuel, or steam shall be valid only for a period of five years from the date issued or until the purchaser is no longer entitled to the exemption, whichever is earlier.
(c) Exemption certificates issued to purchasers of natural or artificial gas, oil, electricity, solid fuel, or steam exempt from sales tax under D.C. Official Code §§ 47-2005(11) or (11A) prior to November 1, 2017, shall no longer be accepted after November 1, 2018.
(d) All exemption applications filed by each purchaser of natural or artificial gas, oil, electricity, solid fuel, or steam for any purpose exempt from sales tax under D.C. Official Code §§ 47-2005(11) or (11A) shall include, but are not limited to , the following information:
(1) Taxpayer ID Number;
(2) Name;
(3) Address;
(4) Sales Tax Account Number;
(5) NAICS Code;
(6) Proof of utility account; and
(7) Utility details, including but are not limited to utility purpose , utility provider, utility account number, meter number, service address.
417.12

Exemption Certificate for Parking Fees.

(a) Except as otherwise provided in this section, each purchaser of exempt parking, storage, or keeping motor vehicles or trailers, shall present evidence satisfactory to the Deputy Chief Financial Officer that the sale is exempt under the Act and this section, and shall obtain from the Director a specific exemption to be presented to the vendor.
(b) Beginning with exemption certificates issued after November 1, 2017, exemption certificates issued to purchaser of exempt parking, storage, or keeping motor vehicles or trailers shall be valid only for a maximum period of two (2) years; in the case of residential parkers, the exemption certificate shall be valid for two (2) years, or for the period of a valid lease in the District of Columbia, whichever is shorter.
(c) Exemption certificates issued to purchasers of exempt parking, storage, or keeping motor vehicles or trailers prior to November 1, 2017 shall not be accepted for sales made after November 1, 2018.
(d) All exemption applications filed by a purchaser of exempt parking, storage, or keeping motor vehicles or trailers shall include, but are not limited to, the following information:
(1) Taxpayer ID Number (SSN);
(2) Name;
(3) Address;
(4) District Driver's license number;
(5) District vehicle tag information;
(6) Vehicle make, model, year;
(7) Parking lot details, including address and distance from residence; and
(8) A copy of the taxpayer's District Driver's License, District vehicle registration, and proof of District residence.
417.13

Contractor's Exempt Purchase Certificate .

(a) A contractor purchasing property at retail for a construction contract with a semipublic institution holding a valid exemption certificate or with the United States or District governments or their instrumentalities shall obtain from the Deputy Chief Financial Officer a certificate of exemption stating that the institution is entitled to the exemption. If the contractor does not present the certificate of exemption to the vendor, the vendor shall collect the reimbursement for the tax.
(b) Beginning with exemption certificates issued after November 1, 2017, exemption certificates issued to contractors shall be valid only for the period of the exempt construction project, based on a signed contract with an exempt entity.
(c) Exemption certificates issued to contractors prior to November 1, 2017 shall not be accepted for sales made after November 1, 2018, or the end date of the exempt project, whichever is first.
(d) If a vendor makes sales to an exempt contractor, the vendor shall keep a copy of the certificate of exemption, the name of the purchaser, the date of each sale, and the amount of the sale.
(e) In order to receive an exemption certificate, a contractor shall follow the Office of Tax and Revenue's electronic application process.
(f) All exemption applications filed for the contractor's exempt purchase certificate by a contactor shall include, but are not limited to, the following information:
(1) Taxpayer ID Number;
(2) Name;
(3) Address;
(4) Sales Tax Account Number;
(5) NAICS Code;
(6) Project information, including but are not limited to location, dates, contract information, and contracting organization;
(7) A list of all subcontractors, including taxpayer ID number; and
(8) A copy of the relevant pages of the government or semi-public institution contract (shall include project dates, project ID number, and authorization signatures).
417.14

Government Exemption Certificate .

(a) A government agency of the United States or District governments purchasing property at retail shall obtain from the Deputy Chief Financial Officer a certificate of exemption. If the government agency does not present the certificate of exemption to the vendor, the vendor shall collect the reimbursement for the tax.
(b) If a vendor makes sales to a government agency, the vendor shall keep a copy of the certificate of exemption, the name of the purchaser, the date of each sale, and the amount of the sale.
(c) In order to receive an exemption certificate, a government agency shall follow the Office of Tax and Revenue's electronic application process.
(d) All exemption applications filed by government organizations shall include, but are not limited to , the following information :
(1) Taxpayer ID Number;
(2) Name;
(3) Address;
(4) Description of the government or instrumentality;
(5) Reason for exemption; and
(6) Proof of applicability of exemption.

D.C. Mun. Regs. tit. 9, r. 9-417

Commissioners' Order 54-1415, 1 DCR 4 (July 19, 1954); as amended by Final Rulemaking published at 30 DCR 1922, 1926 (April 29, 1983); by Final Rulemaking published at 30 DCR 3263, 3264 (July 1, 1983); by Final Rulemaking published at 32 DCR 1354, 1359 (March 8, 1985); and by Final Rulemaking published at 36 DCR 8057, 8058 (November 24, 1989); amended by Final Rulemaking published at 64 DCR 9892 (10/6/2017); amended by Final Rulemaking published at 66 DCR 005381 (4/26/2019)