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DC: FY 2016 Budget Proposal Includes Tax Hikes


 DC: Sales tax rate increase would fund programs to end homelessness.

Muriel E. Bowser, the new Mayor of the District of Columbia, has submitted her budget proposal to the City Council. In it, she advocates for a higher sales tax rate and increased tax rates for parking and electronic cigarettes. Trimming expenses by cutting inefficient programs and vacancies is also an integral part of the plan.

Under the mayor’s FY 2016 proposed budget and financial plan, $26 million in revenue would be raised by enacting the following changes:

  • Increase sales tax to 6% to fund initiatives to end homelessness.
  • Increase the tax on parking by 4% (from 18% to 22%) to encourage use of public transportation and fund a WMATA subsidy increase.
  • Increase the tax on e-cigarettes so they are taxed at the same rate as other tobacco products.

Although proposed, the budget plan has not been accepted. The City Council was said to be uncharacteristically “fairly quiet” upon hearing a broad overview of the budget. And the Washington Post notes that the council rejected a proposed sales tax rate increase last year “because it was a flat tax that could disproportionately affect the city’s low-income residents.”

However, the Post also notes that the rate of sales tax in neighboring Maryland is 6%, as is the rate in Virginia’s northernmost municipalities. 6% in the District is not, therefore, out of the question.

Find accurate sales tax rates for localities in all states with this free sales tax rate map.

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Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.