DC Taxes Sales of Digital Goods in Emergency Legislation

Products sold over the internet into the District of Columbia, called digital goods, are subject to sales and use tax as of January 1, 2019. The District passed emergency legislation that describes the nature of digital transactions it will tax. The District makes clear that Internet access services do not include digital goods.

What are Digital Goods Subject to DC Sales Tax?

Digital goods include:

  • digital audiovisual works
  • digital audio works
  • digital books
  • digital codes
  • digital applications and games

Purchases of maintenance, updates, and support for digital goods are also taxable. DC taxes purchases of digital goods whether the purchase is a single transaction or a subscription.

In addition, methods of electronic and digital delivery include:

  • transferring a product,
  • streaming, or
  • web access.

What is Not a Taxable Digital Good in DC?

Importantly, digital goods do not include certain products/services sold by telecommunications that are subject to utilities tax.

Act 22-556 (D.C.B. 22-1070), Laws 2018, effective December 31, 2018, for a 90-day period that expires March 31, 2019

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All stories by: CCHTaxGroup