D.C. Considers Expanding Tax Base, Click-Through Nexus
- Oct 4, 2013 | Gail Cole
The Washington D.C. Tax Revision Commission, established in 2011, is tasked with making tax recommendations to the mayor and council. The 11 members meet regularly to deliberate on such issues as job creation, business growth, and tax fairness.
Proposed tax changes include:
- Expanding sales tax to select services, such as barber and beautician services, bowling alleys and billiard parlors, carwashes, construction contractors, and storage of household goods.
- Expand the sales tax base to more goods, such as non-prescription goods and all grocery-type food.
- Impose click-through nexus, so that businesses without a physical presence but with commission-based business relations in the district would be required to collect and remit sales tax on district sales..
- Add a use tax line to the income tax return to facilitate collection of the ever-elusive use tax.
- Tax all tobacco products at the same rate;
- Increase the sales tax on non-resident consumption, such as hotels, rental cars and restaurant meals.
Pros and cons of each proposed change are examined. For example, if taxes are raised on certain goods, will consumers go elsewhere to purchase them?
Recommendations currently listed on the D.C. Tax Revision Commission website are not final. Meetings are scheduled to continue through November, and the final report won't be released until January 2014. Still, it's interesting to see what is being considered.
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