D.C. Code § 47-2005

Current through codified legislation effective September 18, 2024

Section 47-2005 - Exemptions

Gross receipts from the following sales shall be exempt from the tax imposed by this chapter:

(1) Sales to the United States or the District or any instrumentality thereof except sales to national banks and federal savings and loan associations;

(2) Sales to a state or any of its political subdivisions if such state grants a similar exemption to the District. As used in this paragraph, the term "state" means the several states, territories, and possessions of the United States;

(3) Sales to semipublic institutions; provided, however, that such sales shall not be exempt unless:

(A) Such institution shall have first obtained a certificate from the Mayor stating that such institution is entitled to such exemption;

(B) The vendor keeps a record of the sale, the name of the purchaser, the date of each separate sale, and the number of such certificate;

(C) Such institution is located within the District; and

(D) The property or services purchased are for use or consumption, or both, in maintaining, operating, and conducting the institution for the purpose for which it was organized or for honoring the institution or its members;

(4) Sales of materials and services to the printing clerks of the majority and minority rooms of the House of Representatives for use in the operation of such rooms, and sales of materials and services made by such clerks in connection with the operation of such rooms;

(5)

(A) Sales of personal property purchased by a utility or a public-service company for use or consumption in furnishing a service or commodity, if the charges from furnishing the service or commodity are subject to a gross receipts tax or a mileage tax in force in the District for the period of time covered by a return required to be filed by the provisions of this chapter. If the personal property purchased is used both to produce receipts or charges subject to a gross receipts tax or a mileage tax and receipts or charges not subject to a gross receipts tax or a mileage tax, then this sales tax exemption shall be allocated in accordance with rules issued by the Mayor.

(B) Beginning on October 1, 1994, sales of personal property purchased by a toll telecommunication company, as defined in § 47-3901(10) [now § 47-3901(14)], irrespective of whether the property is used or consumed in furnishing a service, the charges from which are subject to the gross receipts tax imposed by § 47-2501(b), or Chapter 39 of this title. For the purposes of this subsection, the term "personal property" shall not include office equipment or office furniture.

(C) Beginning on May 1, 1997, sales of personal property purchased by a wireless telecommunication company, as defined in § 47-3901(12) [now (16)], irrespective of whether the property is used or consumed in furnishing a service the charges from which are subject to Chapter 39 of this title. For purposes of this subparagraph, the term "personal property" shall not include office equipment or office furniture;

(D) Sales of personal property purchased by a digital audio radio satellite service company operating under a digital audio radio satellite license granted by the Federal Communications Commission, irrespective of whether the property is used or consumed in furnishing a service the charges from which are subject to the gross receipts tax imposed by § 47-2501.01;

(6) Repealed;

(7)

(A) Casual and isolated sales by a vendor who is not regularly engaged in the business of making sales at retail;

(B) For the first 5 events during a calendar year, sales at a charity auction or other fundraising activity by a nonprofit teaching hospital;

(8) Sales of food or drink, beverages, and other goods made to any person for use in the operation of the majority and minority cloakrooms of the House of Representatives and sales of such food or drink, beverages, and other goods made by such person in connection with the operation of such cloakrooms;

(9) Sales of food or drink or beverages of any nature if made in any car composing a part of any train or in any aircraft or boat operating within the District in the course of commerce between the District and a state;

(10) Sales of goods made pursuant to bona fide contracts entered into before May 27, 1949; provided, that there is a contract in writing signed by the purchaser and vendor which imposes an unconditional liability on the part of the purchaser to buy the goods covered thereby at a fixed price and without escalator clause, and an unconditional liability on the part of the vendor to deliver a definite quantity of such goods at the contract price;

(11) Sales of natural or artificial gas, oil, electricity, solid fuel, or steam, directly used in manufacturing, assembling, processing, or refining of tangible personal property for sale or resale;

(11A)

(A) Sales of natural or artificial gas, oil, electricity, solid fuel, or steam, directly used in a restaurant.

(B) For the purposes of this paragraph, the term "restaurant" means a retail establishment that is licensed by the District of Columbia, a separately metered or sub-metered facility, and in the principal business of preparing and serving food to the public. The term "restaurant" shall include a pizzeria, delicatessen, ice cream parlor, cafeteria, take-out counter, and caterer, and banquet and food-processing areas in hotels. The term "restaurant" does not include beverage counters, including coffee shops and juice bars.

(12) Repealed;

(13) Sale of motor vehicles and trailers which are subject to the provisions of title III of the District of Columbia Revenue Act of 1949;

(14) Sales of medicines, pharmaceuticals, and drugs whether or not made on prescriptions of duly licensed physicians and surgeons and general and special practitioners of the healing art;

(15)

(A) Sales of bone screws, bone pins, pacemakers, and other articles permanently implanted in the human body to assist the functioning of any natural organ, artery, vein, or limb and which remain or dissolve in the body; orthopedic devices designed to be worn on the person of the user as a brace, support, or correction for the body structure, except orthopedic shoes and supportive devices for the foot unless they are required for the correction of a physical deformity; artificial human eyes and their replacement parts; artificial limbs for human beings and their replacement parts; artificial hearing devices for human beings and their replacement parts; mammary prostheses; any appliance and related supplies necessary as a result of any surgical procedure by which an artificial opening is created in the human body for the elimination of natural waste; sales of false teeth by a dentist and the materials used directly by a dentist in the restoration or preservation of teeth; sales of eyeglasses, when especially designed or prescribed by an ophthalmologist, oculist, or optometrist; provided, that such items are for the personal use of the owner or purchaser; and

(B) Sales of wheelchairs, crutches, canes, quad canes, walkers, hospital beds, bedside commodes, patient lifts, urinals, respirators, oxygen tents, kits and inhalers; hemodialysis devices, transcutaneous nerve stimulators; and sales of any other device, apparatus, or equipment used to replace or substitute for any part of the human body, or used to assist the ill or people with disabilities in saving or prolonging life, or used to alleviate pain and suffering; provided, that such device, apparatus, or equipment is sold to an individual for the personal use of that individual and pursuant to written prescriptions or orders of duly licensed physicians and surgeons and general and special practitioners of the healing art;

(16) Sales of material to be incorporated permanently in any war memorial authorized by Congress to be erected on public grounds of the United States;

(17) Repealed;

(18) Food or drink described in § 47-2001(n)(1)(A), which is delivered and sold without profit by a nonprofit volunteer organization to persons who are confined to their homes due to age, illness, disability, or infirmity; provided that such sales shall not be exempt unless such organization has received a certificate of exemption from the District as a semipublic institution;

(19) Sales of food or drink as described in subsection (n)(1)(A) of § 47-2001 made by a residence for senior citizens to the residents and employees of such facility and to the bona fide guests of such residents; provided, that the facility does not also make such sales to the general public. As used in this paragraph, the term "residence for senior citizens" means any facility which rents or offers for rent rooms or dwelling units exclusively to persons who are 60 years of age or older or who are blind or have another disability; provided, that at least 80% of the residents of such facility must be 60 years of age or older;

(20) Sales of motor-vehicle fuels upon the sale of which a tax is imposed by Chapter 23 of this title, as amended or as may be hereafter amended;

(21) Sales of vessels which are subject to the provisions of Article 29 of the Police Regulations;

(22) Sales to an organization exempt under 26 U.S.C. § 501(c)(4) when the organization's membership is limited to a state, territory, or possession of the United States or any political subdivision of a state, territory, or possession;

(23) Sales of "eligible foods," as defined in 7 CFR 271.2 pursuant to the federal Food Stamp Act of 1977 (7 U.S.C. § 2011 et seq.) ("Stamp Act"), and purchased with food stamps issued pursuant to the Stamp Act;

(24)

(A) Sales of residential public utility services and commodities by a gas, electric, or telephone company, sales of residential heating oil or related services by any person, sales of residential natural or artificial gas by any person, or sales of residential electricity by an electric supplier; and

(B) Sales of residential local exchange service or exchange access as defined in § 47-3901(14) [see Editor's note].

(25) Sales of tickets sold for the 1994 World Cup Soccer Games;

(26) Sales of residential cable television service and commodities by a cable television company;

(27) Sales of the following:

(A) Printing services, if purchased by a publisher to print a newspaper that is to be distributed free of charge in the District;

(B) Tangible personal property purchased by a publisher that prints its own newspaper, if the property is incorporated by the publisher as a material or part of a newspaper that is distributed free of charge in the District; and

(C) Wrapping, packing and packaging supplies, if purchased by a publisher to further the distribution of a newspaper that is distributed free of charge in the District;

(28) Sales of building materials related to the development of a qualified supermarket, as defined under § 47-3801;

(29) Beginning on May 1, 1997, 2-way land mobile radio used for taxicabs fare dispatch and for communication between taxicab drivers and their base;

(30)

(A) Gross receipts from sales of tangible personal property to be incorporated or consumed in the course of construction of the Gallery Place Project;

(B) For the purposes of this paragraph, "Gallery Place Project" means the acquisition, construction, installing, and equipping of a mixed-use complex located on Square 454, Lots 41, 824, 838, 857, 877, 878, the portion of the public alley that reverted to former Lot 820, (which is currently known as Lot 866) and former Lot 821 (which is currently known as Lot 867) pursuant to the Plat of Alley Closing filed with the Surveyor of the District of Columbia in Liber 17 at folio 74; and the portions of the public alley that will revert to Lots 41, 824, 838, 857, 877 and 878, all in Square 454, pursuant to the alley closing approved by the Closing of Public Alleys in Square 454 and Square 455, S.O. 98-194 Act of 1999, effective October 22, 1999 (D.C. Law 13-48; 46 DCR 6768), and consisting of:

(i) An approximately 60,000-square-foot multiplex cinema;

(ii) A mixed-use facility providing for retail stores, dining, entertainment, a health and fitness club, offices, and related facilities;

(iii) A market-rate housing complex consisting of approximately 170 residential units;

(iv) A parking garage containing approximately 850 parking spaces; and

(v) Other ancillary improvements; and

(C) The amount of all taxes, fees, and deposits exempt, abated, or waived under this paragraph, section 2(b) of the Gallery Place Economic Development Amendment Act of 2000, effective April 3, 2001, (D.C. Law 13-241; 48 DCR 610) [D.C. Code § 2-1217.31(b)], and §§ 47-902(17), 45-922(24) [§ 42-1102(24) (2001 Ed.)], and 47-1002(26), shall not exceed, in the aggregate, $7 million;

(31) [Repealed].

(32) Repealed;

(32A) Repealed.

(33) Sales of material or equipment used in the construction, and of materials used in the repair or alteration, of real property; provided, that the materials are temporarily stored, for no longer than 90 days, in the District for the purpose of subsequently transporting the property outside the District for use solely outside the District.

(34)

(A) Sales of tangible personal property to be incorporated in or consumed in the course of the initial development, construction, equipping, and furnishing of the Mandarin Hotel Project until the Development Sponsor sells the Mandarin Oriental Hotel Project, as evidenced by the recordation of a deed conveying title to Square 299, Lot 831, at which time such amounts shall be due and payable without penalty or interest.

(B) The amount of all taxes, fees, and deposits deferred under this paragraph, section 2(b) of the Mandarin Oriental Hotel Tax Deferral Act of 2002, passed on 2nd reading on September 17, 2002 (Enrolled version of Bill 14-466) [D.C Code § 2-1217.32(b)], and §§ 42-1102(25), 47-902(19), and 47-1002(27), shall not exceed, in the aggregate, $4 million.

(C) For purposes of this paragraph, the term:

(i) "Development Sponsor" means Portals Hotel Site, LLC, a Delaware limited liability company, and its successors and assigns.

(ii) "Mandarin Oriental Hotel Project" means the acquisition and initial development, construction, equipping, and furnishing of a Mandarin Oriental hotel within the Portals project, located on Square 299, Lot 831, consisting of a 400-room hotel with approximately 33,000 square feet of associated meeting and banquet space, 2 restaurants, a health spa and fitness center totaling approximately 10,000 square feet, and approximately 90,000 square feet of public parking space for approximately 200 cars.

(iii) "Mandarin TIF Bonds" means the tax increment financing bonds issued in connection with the Mandarin Oriental Hotel Project pursuant to the Tax Increment Revenue Bonds Mandarin Hotel Project Emergency Approval Resolution of 2000, effective March 7, 2000 (Res. 13-510; 47 DCR 2133), and the Mandarin Hotel Project Modification Approval Resolution of 2000, effective December 19, 2000 (Res. 13-745; 48 DCR 83).

(D) This paragraph shall apply upon the closing of the sale of the Mandarin TIF Bonds;

(35) Sales by the United States or the District, as fixed by regulation;

(36) Fees retained by a retail establishment under [§ 8-102.03(b)(1)];

(37) [Not funded].

(38)

(A) Sales of feminine hygiene products;

(B) For the purposes of this paragraph, the term "feminine hygiene product" means a sanitary napkin, sanitary towel, tampon, menstrual cup, or sanitary pad.

(39)

(A) Sales of diapers;

(B) For the purposes of this paragraph, the term "diaper" means an absorbent incontinence product that is washable or disposable and worn by a person, regardless of age or sex, who cannot control bladder or bowel movements.

(40) Any sales concomitant to the transfer of real and personal property between the electric company and the District pursuant to [§ 34-1313.11(c)].

D.C. Code § 47-2005

May 27, 1949, 63 Stat. 115, ch. 146, title I, § 128; May 18, 1954, 68 Stat. 118, ch. 218, title XIII, § 1305; Mar. 31, 1956, 70 Stat. 81, ch. 154, title II, § 204; July 3, 1957, 71 Stat. 276, Pub. L. 85-82, § 1; Sept. 30, 1966, 80 Stat. 856, Pub. L. 89-610, title III, § 302; Aug. 2, 1968, 82 Stat. 614, Pub. L. 90-450, title III, § 305(a); Oct. 31, 1969, 83 Stat. 171, Pub. L. 91-106, title I, § 106; Jan. 5, 1971, 84 Stat. 1932, Pub. L. 91-650, title II, § 201(b); Oct. 21, 1975, D.C. Law 1-23, title III, § 301(9), (10), 22 DCR 2101; June 15, 1976, D.C. Law 1-70, title IV, § 403, 23 DCR 540; Apr. 6, 1977, D.C. Law 1-101, § 2, 23 DCR 8731; Mar. 3, 1979, D.C. Law 2-145, § 2, 25 DCR 6983; Sept. 13, 1980, D.C. Law 3-92, § 201(c), 27 DCR 3390; Mar. 4, 1981, D.C. Law 3-128, § 12, 28 DCR 246; July 24, 1982, D.C. Law 4-131, §§ 205, 503, 29 DCR 2418; Aug. 14, 1982, D.C. Law 4-133, § 2, 29 DCR 2745; Mar. 14, 1984, D.C. Law 5-58, § 3, 30 DCR 6293; Feb. 28, 1987, D.C. Law 6-207, § 2, 34 DCR 677; Sept. 22, 1987, D.C. Law 7-24, § 2, 34 DCR 4515; Oct. 1, 1987, D.C. Law 7-25, § 4, 34 DCR 5068; Sept. 20, 1989, D.C. Law 8-26, § 20, 36 DCR 4723; Mar. 11, 1992, D.C. Law 9-71, § 2, 39 DCR 19; Sept. 10, 1992, D.C. Law 9-145, § 107(c), 39 DCR 4895; Sept. 30, 1993, D.C. Law 10-25, § 111(i), 40 DCR 5489; Apr. 30, 1994, D.C. Law 10-115, § 203(b), 41 DCR 1216; June 14, 1994, D.C. Law 10-128, § 104(c), 41 DCR 2096; Sept. 26, 1995, D.C. Law 11-52, § 113, 42 DCR 3684; enacted, Apr. 9, 1997, D.C. Law 11-254, § 2, 44 DCR 1575; Apr. 30, 1998, D.C. Law 12-99, § 2(a), 45 DCR 1524; Apr. 30, 1998, D.C. Law 12-100, § 2(c), 45 DCR 1533; Oct. 14, 1999, D.C. Law 13-49, § 8(a), 46 DCR 5153; Apr. 5, 2000, D.C. Law 13-75, § 2(b), 46 DCR 10425; July 18, 2000, D.C. Law 13-148, §2(b), 47 DCR 4636; Oct. 4, 2000, D.C. Law 13-166, § 3(c), 47 DCR 5821; Oct. 19, 2000, D.C. Law 13-172, § 2302(a), 47 DCR 6308; Apr. 3, 2001, D.C. Law 13-241, § 4(c), 48 DCR 610; Apr. 3, 2001, D.C. Law 13-256, § 402(b), 48 DCR 730; June 9, 2001, D.C. Law 13-306, § 2, 48 DCR 569; June 9, 2001, D.C. Law 13-305, § 202(g), 302(c), 48 DCR 334; June 19, 2001, D.C. Law 13-313, § 16(b), 48 DCR 1873; Oct. 26, 2001, D.C. Law 14-42, §§ 12, 14, 48 DCR 7612; June 25, 2002, D.C. Law 14-157, § 2(b), 49 DCR 4279; Oct. 19, 2002, D.C. Law 14-213, §§ 38, 39, 49 DCR 8140; Mar. 25, 2003, D.C. Law 14-232, § 4(c), 49 DCR 9764; Apr. 4, 2003, D.C. Law 14-282, § 11(ss), 50 DCR 896; Mar. 13, 2004, D.C. Law 15-105, §§ 12(e), 26(d), 85(b), 51 DCR 881; Dec. 7, 2004, D.C. Law 15-205, § 1182, 51 DCR 8441; Apr. 5, 2005, D.C. Law 15-277, § 2, 52 DCR 833; Apr. 24, 2007, D.C. Law 16-305, § 73(f), 53 DCR 6198; Sept. 23, 2009, D.C. Law 18-48, § 2(a)(2), 56 DCR 5482; Sept. 23, 2009, D.C. Law 18-55, § 9(a)(5), 56 DCR 5703; Mar. 3, 2010, D.C. Law 18-111, § 7041, 57 DCR 181; Mar. 12, 2011, D.C. Law 18-324, § 2, 58 DCR 3; Dec. 24, 2013, D.C. Law 20-61, § 7362, 60 DCR 12472; June 26, 2014, D.C. Law 20-117, § 15(a), 61 DCR 2032; Mar. 11, 2015, D.C. Law 20-223, § 101, 62 DCR 227; Feb. 18, 2017, D.C. Law 21-201, § 2, 63 DCR 15041; July 11, 2017, D.C. Law 22-5, § 3(c), 64 DCR 4943; Sept. 11, 2019, D.C. Law 23-16, § 7212(b)(2), 66 DCR 8621.

Section 3 of D.C. Law 18-48 provided that this act shall apply as of January 1, 2009.

Section 3 of D.C. Law 18-324 provided: "Sec. 3. Applicability. This act shall apply as of January 1, 2010."

The Budget Director of the Council of the District of Columbia has determined, as of February 15, 2012, that the fiscal effect of Law 18-324 has not been included in an approved budget and financial plan. Therefore, the provisions of this section, enacted by Law 18-324, are not in effect.

Section 4(b) of D.C. Law 12-100 provided that returns or payments due from wireless telecommunication companies for the period beginning May 1, 1997, through the effective date of this act not previously filed or paid shall be due by the 45th day after the effective date of this act.

Section 4(c) of D.C. Law 12-100 provided that beginning in FY 1999, the amount of tax imposed by the act shall not be calculated as gross revenue to which the tax is then applied.

Section 2 of D.C. Law 13-241, as amended by section 40 of D.C. Law 14-213, provided:

"Tax and fee abatements Gallery Place Project .

"(a) For the purposes of this section, the term:

"(1) ~Development Sponsor' means Gallery Place Holdings LLC, a Delaware limited liability company, and its successors and assigns.

"(2) ~Gallery Place Project' means the acquisition, construction, installing, and equipping of a mixed-use complex located on Square 454, Lots 41, 824, 838, 857, 877, 878; the portion of the public alley that reverted to former Lot 820 (which is currently known as Lot 866), and former Lot 821 (which is currently known as Lot 867) pursuant to the Plat of Alley Closing filed with the Surveyor of the District of Columbia in Liber 17 at folio 74; and the portions of the public alley that will revert to Lots 41, 824, 838, 857, 877 and 878, all in Square 454, pursuant to the alley closing approved by the Closing of Public Alleys in Square 454 and Square 455, S.O. 98-194, Act of 1999, effective October 22, 1999 (D.C. Law 13-48; 46 DCR 6768), and consisting of:

"(A) An approximately 60,000-square-foot multiplex cinema;

"(B) A mixed-use facility providing for retail stores, dining, entertainment, a health and fitness club, offices, and related facilities;

"(C) A market-rate housing complex consisting of approximately 170 residential units;

"(D) A parking garage containing approximately 850 parking spaces; and

"(E) Other ancillary improvements.

"(b) All fees to be paid, and any deposits to be made, by or on behalf of the Development Sponsor in connection with the Gallery Place Project under the eighth unnumbered paragraph of the General Expenses title of An Act Making Appropriations to provide for the expense of the Government of the District of Columbia for the fiscal year ending June thirtieth, nineteen hundred and ten, and for other purposes are hereby waived.

"(c) The amount of all taxes, fees, and deposits exempt, abated, or waived under subsection (b) of this section, section 302(24) of the District of Columbia Recordation Tax Act and D.C. Code 47-902(17), 47-1002(26), and 47-2005(32), shall not exceed, in the aggregate, $7 million.

"(d) In accordance with section 5 of An Act providing a permanent form of government for the District of Columbia the Mayor shall expend up to $2 million to improve and repair the streets, sewers, alleys, sidewalks, curbs, and gutters abutting the Gallery Place Project. All assessments upon abutting property for the cost of improvements to such streets, sewers, alleys, sidewalks, curbs, and gutters, including any expenses of assessment, shall be waived."

Applicability of Law 13-305. Section 303(c) of D.C. Law 13-305, as amended by section 36(a) of D.C. Law 14-213, provided: "Section 302(c) and (f) shall be applicable as of January 1, 1999."

Applicability of Law 18-48. Section 3 of D.C. Law 18-48 provides that "this act shall apply as of January 1, 2009."

Section 3 of D.C. Law 18-324 provided: ~Sec. 3. Applicability. This act shall apply as of January 1, 2010. ~ The Budget Director of the Council of the District of Columbia has determined, as of February 15, 2012, that the fiscal effect of Law 18-324 has not been included in an approved budget and financial plan. Therefore, the provisions of this section, enacted by Law 18-324, are not in effect.

Applicability of D.C. Law 20-61: Section 7363 of D.C. Law 20-61 provided that § 7362 of the act shall apply as of August 1, 2013.

Applicability of D.C. Law 20-117: Section 15(b) of D.C. Law 20-117 provided that § 15(a) of the act, which amended (11), shall apply as of August 1, 2013.

Section 18 of D.C. Law 20-61 provided that the act shall apply as of October 1, 2013.

Applicability of D.C. Law 20-223: Section 301(a) of D.C. Law 20-223 provided (1) that § 101 of the act shall apply for the tax year in which its fiscal effect has been included in an approved budget and financial plan; (2) that the Chief Financial Officer shall certify the date of the inclusion of the fiscal effect in an approved budget and financial plan, and provide notice to the Budget Director of the Council of the certification; and (3) that the Budget Director shall cause the notice of the certification to be published in the District of Columbia Register and that the date of publication of the notice of the certification shall not affect the applicability of § 101.

Applicability

Applicability of D.C. Law 21-201: § 7144 of D.C. Law 23-16 repealed § 3 of D.C. Law 21-201. Therefore the amendment of this section by D.C. Law 21-201 has been implemented.

Applicability of D.C. Law 21-201: § 3 of D.C. Law 21-201 provided that the change made to this section by § 2 of D.C. Law 21-201 is subject to the inclusion of the law's fiscal effect in an approved budget and financial plan. Therefore that amendment has not been implemented.