02.04.11

Mandatory Unitary Combined Reporting in the District is Unlikely for 2011

DC Council Resists Calls to Harm Business Climate With Combined Reporting

In 2009, the District of Columbia Council passed an unusual measure: to require a future version of itself to enact mandatory unitary combined reporting (MUCR) before 2011. The 2009 measure also expanded the District’s addback statute. While there have been cries for the Council to move forward and actually adopt MUCR, the Council has wisely chosen to ignore those calls. As has been demonstrated recently in other states, MUCR hinders economic growth, imposes a complex administrative burden on businesses and taxing authorities, and leads to uncertain revenue effects (Maryland figures show tax receipts would have declined under MUCR in 2008).

Internet (Expedia, Orbitz, etc.) Room Bookings Now Subject to Sales and Use Tax in the District

District of Columbia - Sales and Use Tax: Charges for Accommodations Arranged by Online Travel Companies Taxable

Recently approved District of Columbia permanent legislation imposes sales and use tax on charges for transient accommodations made by persons other than the retailer, including charges received from Internet transactions by online travel companies. The definition of "retail sales" for sales and use tax purposes now includes net charges and additional charges for any room or rooms, lodgings, or accommodations furnished to transients by any room remarketer, as well as by any hotel, inn, tourist camp, tourist cabin, or any other place in which rooms, lodgings, or accommodations are regularly furnished, to transients for consideration. "Net sale" or "net charges" means the gross receipts from the sale of or charges for any room or accommodations received by a retailer from a room remarketer. "Additional charges" means the excess of the sale or charges received from the transient by a room remarketer over the net sale or net charges. "Room remarketer" means any person, other than the retailer, having any right, access, ability, or authority, through an Internet transaction or any other means whatsoever, to offer, reserve, book, arrange for, remarket, distribute, broker, resell, or facilitate the transfer of rooms the occupancy of which is subject to sales tax.

If you would like to discuss how any of these updates affect you, please contact us.

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