Starting a Business in District of Columbia

The District of Columbia (Washington D.C.) is not only the nation’s capital, but it has one of the most powerful business atmospheres in the entire country for a company to grow and excel. Some of the world’s most influential decision makers reside here. It is also home to some of the best universities and research facilities in the whole nation, which has led to an extremely educated labor market. With this type of an ecosystem, networking can be vital to a business if it is to thrive.


Whenever starting a business in the District of Columbia, sourcing accurate information is very important, whether you are trying to setup an account to collect DC sales tax, checking form FR-164 or form FR-500, or verifying an EIN number. If you are going to file a sales tax return, it may be necessary to look up a DC sales tax rate. Additionally, you can research the relevant District of Columbia business licenses for your company to meet compliance requirements. Once you situate your business in the District of Columbia, you can take advantage of the numerous programs that are out there. There are tax credits, tax exemptions, business grants, and loans that are offered based on business type, industry and location. The Washington DC Office of Tax and Revenue and the Office of the Secretary oversee many procedures for new businesses. After you have performed a DC corporation search and setup a company with the DC Secretary of State, you can register online for a District of Columbia Sales Tax License. You can also get an FEIN to open up a business bank account or apply for business credit cards. Also, it may be necessary to research the Business Licenses you will need to conduct operations. After all administrative issues are dealt with, you can move on to checking out advantageous benefit programs. Washington DC businesses can reap the rewards from the following available programs:
  • The Qualified High Technology Companies Program is one of the most beneficial incentive programs available to both current businesses as well as those that want to relocate to DC. A qualified technology business has many handsome incentives it may take including:
  1. A 0% franchise tax that can be taken for the first 5 years of taxable income, with a maximum of 6% for all future years.
  2. A wage credit that is available up to $15,000 for every disadvantaged employee and $5,000 for every other employee up to two years.
  3. A ten year tax exemption is available for personal property used in business operations.
  4. A relocation tax credit of $7500 is available for all businesses relocating to the District of Columbia.
  5. The purchase of hardware, software, and equipment used in operations are available for a District of Columbia Sales Tax Exemption. Although in order to qualify for the benefit and obtain the exemption certificate, a seller’s permit will be required.
  • A second program that is available to qualified technology companies is called the Creative and Open Space Modernization Program. This program will allow tax rebates of up to $1,000,000 per business year for a maximum of 5 years.
  • The OJT is an on the job training program that is targeted towards cultivating a workforce for a qualified business. It is meant to give trainees a chance to earn an income during on the job training. Companies are eligible to be reimbursed for 50%-75% of a trainee’s wages up to 1040 hours.
  • The LECD’s micro lending program offer business loans between $5,000 to $50,000 to start-ups and existing businesses that are having trouble securing financing from traditional sources.