The District of Columbia has enacted legislation to require that, beginning with the 12-month period ending September 30, 2012, any employer required to file a District withholding return, but not required to collect and remit sales taxes, must file an annual use tax return.  The annual use tax return is due October 20, 2012.

On the use tax return you must report the cost of all personal property and taxable services used or consumed by you in DC on which sales tax has not been paid to any state.  The DC use tax rate is 6%.

The filing and any tax due will apply only to businesses that have employees who are District residents and individual employers who have household employees who are District residents and thus file DC withholding returns (Form FR900).

If you would like more details regarding this enacted legislation, please do not hesitate to call.