Publications

Government of the

District of Columbia

Muriel Bowser

Mayor

Fitzroy Lee

Interim Chief Financial Officer

Tax Rates and Tax Burdens

Washington Metropolitan Area

Including: Washington, DC Maryland Virginia

Montgomery Co. Alexandria

Prince George's Co. Arlington Co.

Fairfax City

Fairfax Co.

Falls Church

2019

Issued April 2021

2019 Tax Rates and Tax Burdens – Washington Metropolitan Area

A Comparison of Tax Rates and Burdens in

the Washington Metropolitan Area

Table of Contents

List of Major Charts, Maps, and Tables ............................................................................. ii

Executive Summary ............................................................................................................ iv

Acknowledgments ................................................................................................................ vii

Part I: A Comparison of Tax Burdens in Selected

Washington Metropolitan Area Jurisdictions, 2019

Overview ................................................................................................................ 2

Individual Income Tax ........................................................................................... 4

Real Property Tax .................................................................................................. 9

Sales Tax .............................................................................................................. 14

Automobile Tax... ................................................................................................ 16

Part II: A Comparison of Tax Rates in the Washington

Metropolitan Area as of January 1, 2020

Alcoholic Beverage Tax ....................................................................................... 28

Cigarette Tax ......................................................................................................... 29

Financial Institution Taxes .................................................................................... 30

Income Taxes

Corporate Franchise ........................................................................................ 31

Individual Income ........................................................................................... 32

Unincorporated Business Franchise ................................................................ 35

Inheritance and Estate Taxes ................................................................................. 37

Insurance Premiums Tax....................................................................................... 39

Motor Vehicle Taxes…………………………………………………..................41

Motor Vehicle Excise Tax .............................................................................. 41

Motor Vehicle Registration............................................................................. 41

Motor Vehicle Fuel Tax .................................................................................. 43

2019 Tax Rates and Tax Burdens – Washington Metropolitan Area

A Comparison of Tax Rates and Burdens in

the Washington Metropolitan Area

Table of Contents, continued

Property Taxes

Real Property .................................................................................................. 44

Property Tax Relief Programs ........................................................................ 47

Tangible Personal Property ............................................................................. 52

Public Utilities Tax ............................................................................................... 55

Recordation and Transfer Taxes ........................................................................... 58

Sales and Use Taxes.............................................................................................. 60

Water and Sewerage User Charges (Residential) ................................................. 63

Miscellaneous Taxes ............................................................................................. 66

Uniform Disposition of Unclaimed Property…………………………………… 68

Appendix: Additional Tax Burden Maps................................................................................. 69

Office Locations and Telephone Numbers ............................................................................... 76

List of Major Charts, Maps, and Tables

Part I: A Comparison of Tax Burdens in Selected Washington Metropolitan

Area Jurisdictions, 2019

Table 1 Individual Income Tax, Washington Metropolitan Area (2019).....…........7

Chart 1 2019 Metropolitan Area Individual Income Tax Burdens….......................8

Table 2 Housing Value Assumptions for Major

Washington Metropolitan Area Jurisdictions, Calendar Year 2019……..10

Table 3 Calculation of Effective Residential Property Tax Rates………………..13

Chart 2 2019 Metropolitan Area Effective Property Tax Rates……………….....14

Chart 3 2019 Metropolitan Area Real Property Tax Burdens...……………….....14

Table 4 Selected Sales Tax Rates ……………………………………………….15

Table 5 Automobile Tax Assumptions, 2019 ........................................................17

Table 6 2019 Major State & Local Tax Burdens for a Family of Three

in Selected Washington Metropolitan Area Jurisdictions ........................19

Table 7 Summary of Average Tax Burdens for Selected

Washington Metropolitan Area Jurisdictions and DC, 2019 ...................20

Chart 4 DC’s Combined Tax Burdens Compared with Average of Other Metro

Areas, 2019…………………………….…………….…………………..21

Chart 5 Estimated Tax Burdens for Five Hypothetical Families, 2019………… 22

2019 Tax Rates and Tax Burdens – Washington Metropolitan Area

iii

A Comparison of Tax Rates and Burdens in

the Washington Metropolitan Area

Table of Contents, continued

Map 1 Combined 2019 Metro Area Tax Burdens (Income, Property, Sales, &

Auto) as a % of Income (Family Earning $75,000/Year)……………......24

Table 8 Selected State and Local Tax Rates in the DC Metropolitan Area, as of

December 31, 2019 .....…………………………………………………..25

Table 9 Demographic Statistics for Selected Metropolitan Area Jurisdictions,

2019…...………………………………………………………………….26

Part II: A Comparison of Tax Rates in the Washington Metropolitan Area as of

January 1, 2020 (unless otherwise noted)

Table 10 Metropolitan Area Tax Rates on Alcohol …..…......................................28

Table 11 Metropolitan Area Tax Rates Per 20 Cigarettes…………………...…....29

Table 12 Unincorporated Business Franchise and Business License Taxes ..…….36

Table 13 Insurance Premiums Tax Rates………………………………………….40

Table 14 Annual Registration Fees for Passenger Cars……………………………42

Table 15 Real Property Tax Rates, As of December 31, 2019 ..........................…..46

Table 16 Property Tax Relief Programs ...........................................................…...50

Table 17 Tangible Personal Property, Tax Year 2019– 2020 (FY 2020)…………54

Table 18 Public Utilities Tax to Residential Consumers………………………….56

Table 19 Public Utilities Tax to Suppliers ..........................................…………....57

Table 20 Metropolitan Area Sales and Use Tax Rates..…………………………..62

Table 21 Water and Sewerage User Charges (Residential), 2019………………...64

Appendix

Map 2 DC Metropolitan Area Map……………………………………...............70

Map 3 Combined 2019 Metropolitan Area Tax Burdens (Income, Property, Sales,

& Auto) as a % of Income (Family Earning $25,000/Year)……..……...71

Map 4 Combined 2019 Metropolitan Area Tax Burdens (Income, Property, Sales,

& Auto) as a % of Income (Family Earning $50,000/Year)………….....72

Map 5 Combined 2019 Metropolitan Area Tax Burdens (Income, Property, Sales,

& Auto) as a % of Income (Family Earning $75,000/Year)….................73

Map 6 Combined 2019 Metropolitan Area Tax Burdens (Income, Property, Sales,

& Auto) as a % of Income (Family Earning $100,000/Year)…………...74

Map 7 Combined 2019 Metropolitan Area Tax Burdens (Income, Property, Sales,

& Auto) as a % of Income (Family Earning $150,000/ Year)……..........75

2019 Tax Rates and Tax Burdens – Washington Metropolitan Area

Executive Summary

Overview

This publication contains two studies: (I) the Washington, DC Metropolitan Area tax

burden comparison, and (II) the Washington, DC Metropolitan Area comparison of tax rates.

Hypothetical state and local tax burdens for a family of three, at five income levels, are

presented in Part I of this publication. These burdens reflect individual income, real property,

sales, and automotive taxes in the District of Columbia and selected jurisdictions in the

Washington metropolitan area. The District’s tax structure employs taxes typically used by local

governments, such as real and personal property taxes, deed taxes, and others. At the same time,

the District has taxes usually associated with the state level of government, such as the income

tax, estate tax, sales and use taxes, excise taxes, gross receipts taxes, and motor vehicle taxes.

About two-thirds of the District’s generated revenues come from taxes usually administered by

the states.

Taxation of individuals is an important factor in considering the competitiveness of a

given jurisdiction within a major metropolitan area. Simply comparing nominal tax rates,

however, does not provide an accurate picture of how one location

compares to other jurisdictions, and can be misleading given that

statutory rates do not reflect the wide array of adjustments and

provisions made to the tax base, such as tax deductions, credits,

and other preferences. Further, the District’s tax rates are often

compared to either state rates, or other city rates, and not usually a

combination of both rates that would be applicable to residents

living in those locales. As such, this study calculates the combined

state and local tax burdens a hypothetical family [at five different

income levels] would face living in DC as compared to

neighboring jurisdictions.

In order to compare different locations within the major metropolitan Washington area,

this study estimates hypothetical state and local tax burdens for a family of three in eight

Washington-area jurisdictions: the District of Columbia, the Maryland counties of Montgomery

and Prince George’s; the Virginia counties of Arlington and Fairfax; and the Virginia cities of

Alexandria, Fairfax, and Falls Church. Part II of the report also includes rates for Loudon and

Prince William Counties in Virginia. The hypothetical family comparison accounts for

differences in tax bases as well as tax rates across jurisdictions and can be conducted at a variety

of income levels.

In this study, the hypothetical family consists of two wage-earning spouses and one

school-age child. The gross family income levels used are $25,000, $50,000, $75,000, $100,000,

and $150,000. The wage and salary split is assumed to be 70-30 between the two spouses. All

other income is assumed to be split evenly. The family at each income level is assumed to own a

single-family home, except for families at the $25,000 income level, who are assumed to occupy

rental housing. All families are assumed to reside within the confines of the jurisdiction, and all

wage and salary income is assumed to have been earned in the jurisdiction.

…this study calculates

the combined state and

local tax burdens that a

hypothetical family [at

five different income

levels] would face living

in DC as compared to

neighboring jurisdictions.

2019 Tax Rates and Tax Burdens – Washington Metropolitan Area

The four taxes used in the comparison are the individual income tax; the real property tax

on residential property; the general sales and use tax; and automobile taxes, including the gasoline

tax, registration fees, and personal property tax for tax year 2019.

This study is not intended to measure the overall level of taxation in a jurisdiction; rather,

it attempts to measure a hypothetical tax burden for a family given assumptions identified for

each tax. There is no single “best” way of measuring tax burdens. To estimate tax payments, the

study makes critical assumptions about typical households, their sources of income, and

consumption patterns. Property tax liabilities are particularly difficult to measure accurately

because of varying assessment practices, property characteristics, and relief mechanisms. The

methodology used to derive the estimated tax burden for each tax is presented in the section

pertaining to that tax.

Findings

The main results of the study are presented in Tables 6 and

7, pages 19-20, and are also illustrated in Charts 4 and 5 on pages

21-23. When combining the four different tax burdens studied

together, the District of Columbia taxes its residents lower relative

to neighboring jurisdictions at each income level. At the

$25,000/year income level, the five Virginia jurisdictions rank

highest in the combined tax burdens, with Fairfax City’s burden

being the highest. At the $50,000- and $150,000-income levels,

Prince George’s County, Maryland’s tax burden ranks first, with

Falls Church, Virginia, ranking second. At the $75,000- and

$100,000-income levels, Falls Church ranks first with Prince

George’s County ranking second. At the four highest income levels,

Fairfax City and Alexandria, Virginia, share the third and fourth ranks, while Arlington and

Fairfax County share the fifth and sixth ranks. At every income level Montgomery County,

Maryland’s combined tax burden ranks seventh, while DC’s is eighth.

Individual Income Tax: The District’s individual income tax burden is lower than the

metropolitan average (excluding DC) at all levels except at the $100,000- and $150,000-income

level. The District’s income tax burden ranges from less than 0 percent (negative $2,572,

representing a tax refund), at the $25,000 income level to 5.8 percent ($8,745) at the $150,000

income level, (see Table 7, page 20). DC has the highest income tax burden at the $150,000-

income level; Montgomery County ranks highest for the $100,000-income level, while

Montgomery and Prince George’s Counties are tied with the highest burdens for the $50,000- and

$75,000-income levels. At the $25,000-level the Virginia jurisdictions rank highest (even with a

$0 tax burden) because the two Maryland counties and DC offer a refund through an Earned

Income Tax Credit (and a refundable property tax credit in DC). Except at the highest income

level, the tax burdens in the Maryland jurisdictions are higher than in DC and Northern Virginia

because these two counties levy their own local income tax, in addition to the income tax levied

by the state of Maryland. Without taking the local income taxes into account, the families in DC

would have a higher income tax burden than the families in the Maryland counties at the highest

three income levels. This fact highlights a reason for analyzing tax burdens in a more

comprehensive manner by including both state and local taxes.

Main Finding:

When combining the

four different tax

burdens together, the

District of Columbia

taxes its residents lower

relative to neighboring

jurisdictions at each

income level.

2019 Tax Rates and Tax Burdens – Washington Metropolitan Area

Property Tax: The real property tax burden for District of Columbia homeowners falls

below the area-wide average (excluding DC) for homeowners at all income levels, a result of its

lower property tax rate and homestead deduction. For DC homeowners (those families earning

$50,000 or more) the tax burden ranges from 1.36 percent ($682) of income at the $50,000

income level to 2.19 percent ($3,285) at the $150,000 income level. In the District, the 2019

nominal rate of $0.85 per $100 of taxable assessed value is multiplied by the effective assessment

level (statutory assessment level of 100% X median assessment sales ratio) and applied to the

market value of the home after deducting $74,850 for the homestead exemption. For homeowners

at all income levels, Prince George’s County, Maryland has the highest property tax burden. In

this study, the families earning $25,000/year are assumed to rent instead of own and based on the

way that the property tax equivalent of rent is calculated for the study, the property tax burden at

this income level is assumed to be the same for all the metro jurisdictions. The high property tax

equivalent of rent reflects the high cost of rental housing in the metro region. As previously noted,

DC provides a property tax credit for renters which is reflected in the income tax burdens since it

is administered through that tax.

Sales and Use Tax: The District’s sales tax burden is higher than the metropolitan area

average (excluding DC) at all income levels. The general sales tax rate in the District of Columbia

is 6.0 percent (the same as Maryland and Northern Virginia’s general rates). However, each

jurisdiction has a multiple rate system in which sales tax rates on items such as food consumed

away from home and rental vehicles are higher than the general rate, thus the tax burdens

calculated for this study differ from one another.

Automotive Taxes: The District of Columbia automotive tax burden is lower than the

metropolitan area average (excluding DC) at all income levels. Unlike Virginia localities, the

District and Maryland jurisdictions do not levy a personal property tax on automobiles. The

combined state and local registration fees in Virginia are comparable to the state rate in Maryland.

The District imposes the highest registration fee in the metropolitan area, ranging from $72 for a

vehicle weight under 3,500 pounds to $155 for vehicles of 5,000 pounds or more.

The District of Columbia gasoline tax rate of 23.5 cents per gallon at the end of 2019 is

lower than Maryland’s recently increased rate of 36.79 cents per gallon, and lower than Virginia’s

30.12 cents per gallon (combined state + local rate).

See Map 1 (page 24) for an illustration of the metro area jurisdiction’s combined tax

burdens (income, property, auto, and sales) as a percentage of income, for a family earning

$75,000/year. At all income levels, DC has the lowest combined tax burden of the surrounding

jurisdictions. For maps illustrating combined metro area burdens for the other income levels, see

the Appendix on page 69.

This report is organized in two sections. Part I presents the Washington, DC Metropolitan

Area tax burden comparisons; and Part II contains a comparison of tax rates across the

Washington, DC Metropolitan Area.

2019 Tax Rates and Tax Burdens – Washington Metropolitan Area

vii

Acknowledgments

Each year the Government of the District of Columbia, Office of the Chief Financial

Officer, Office of Revenue Analysis publishes Tax Rates and Tax Burdens: Washington

Metropolitan Area as required by DC Code 47-817.

Taxpayers and government officials in the

District of Columbia have a significant interest in the relative tax position of the District

compared to the surrounding jurisdictions.

The Office of Revenue Analysis acknowledges and sincerely appreciates the time, effort,

and courtesy of officials in the Washington metropolitan area who cooperated in providing

information for this report. To properly compare tax rates and tax burdens, uniform and reliable

data must be used. Officials from the area jurisdictions assist with data compilation included in

this report. Part I of this volume compares tax burdens for the 2019 tax year and Part II compares

tax rates effective as of January 1, 2020.

I would also like to thank Lori Metcalf, who prepared this document, and Bob Zuraski,

Farhad Niami, and Charlotte Otabor, who offered editing assistance.

Questions and/or comments relating to this publication should be addressed to Lori

Metcalf, Fiscal Analyst, Office of Revenue Analysis, 1101 4

Street, SW, Suite 770 West,

Washington, DC 20024, or call (202) 727-7775.

Norton Francis

Chief Economist and

Deputy Chief Financial Officer (Interim)

April 2021

“In establishing a real property tax rate or rates, the Council shall make a comparison of tax rates and burdens applicable to

residential and nonresidential property in the District with those such rates applicable to such property in jurisdictions in the

vicinity of the District. The comparison shall include other major taxes in addition to the tax on real property. Without in any way

limiting the authority of the Council, it is the intention of Congress, that tax burdens in the District be reasonably comparable to

those in the surrounding jurisdictions of the Washington metropolitan area.”

2019 Tax Rates and Tax Burdens – Washington Metropolitan Area

Part I

A Comparison of Tax Burdens

in Selected Washington

Metropolitan Area Jurisdictions

2019

Part I: A Comparison of Tax Burdens in Selected Washington Metropolitan Area Jurisdictions

2019 Tax Rates and Tax Burdens – Washington Metropolitan Area

Page 2

Overview

There is wide diversity in state and local tax systems in the United States. The fifty states

and the District of Columbia employ a broad range of taxes and fees to fund state and local

government operations. The combination of taxes and fees used by a particular jurisdiction is

dependent upon many factors, including its revenue needs, the local government tax base, the

fiscal relationships between the state and the local government, constitutional and legal

limitations on the powers of taxation, and the jurisdiction’s philosophy of government taxation.

The District’s tax structure includes taxes typically imposed by local governments, such

as real and personal property taxes, deed taxes, and others. At the same time, the District also

levies taxes usually associated with the state level of government, such as individual and

corporate income taxes, excise taxes, and motor vehicle related taxes. About two-thirds of the

District’s locally generated revenues come from taxes usually administered by a state.

The District is often compared to other cities, or states, independently, without

considering its unique situation of having to charge taxes that both a city and a state normally

levy. Therefore, the Office of Revenue Analysis produces a report comparing District tax

burdens on a hypothetical family to the combined state and local tax burdens the family would

face if it lived in the largest city in each state. As a companion to that nationwide study, the

present study compares the state and local tax burdens of a hypothetical family of three in the

eight major Washington metropolitan area jurisdictions: the District of Columbia; the Maryland

counties of Montgomery and Prince George's; the Virginia counties of Arlington and Fairfax;

and the Virginia cities of Alexandria, Fairfax, and Falls Church. Each jurisdiction provides its

own level of services and levies various taxes to pay for those services. The study does not

attempt to compare the level of services provided by each jurisdiction.

Further, this study defines the term ‘tax burden’ as the dollar amount of taxes owed if the

final incidence of each major tax examined (income, property, sales, and auto) is on the

individual.

Similar to the assumptions in the nationwide study, the hypothetical family in this

study consists of two wage-earning spouses and one school-age child. Families with annual gross

income levels of $25,000, $50,000, $75,000, $100,000, and $150,000 for each jurisdiction are

analyzed. The wage and salary split is assumed to be 70-30 between the two spouses.

The family at each income level over $25,000 is assumed to own a single-family home

and to reside within the confines of the city or county. However, at the $25,000 income level, the

study assumes that the household rents and does not own its housing unit and owns one

automobile. Families with annual income of $50,000 are presumed to own their home and one

automobile; and families with annual incomes of $75,000, $100,000, and $150,000 are assumed

to own their own home and two automobiles. This study compares the tax burden in each

jurisdiction for the hypothetical family across four major tax categories: individual income tax,

real property tax, sales tax, and automobile-related taxes.

This approach differs from the use of the phrase ‘tax burden’ that may be more common in the field of economics, which includes an economic

analysis of which group bears the ‘burden’ of a tax by ultimately having to pay it, also known as the ‘incidence’ of a tax.

Part I: A Comparison of Tax Burdens in Selected Washington Metropolitan Area Jurisdictions

2019 Tax Rates and Tax Burdens – Washington Metropolitan Area

Page 3

This study does not intend to measure the overall level of taxation in a jurisdiction;

rather, it attempts to measure a hypothetical tax burden for a family given the assumptions noted.

There is no single "best" way of measuring tax burdens. To estimate tax payments, the study

makes critical assumptions about typical households, their sources of income, and consumption

patterns. Property tax liabilities are particularly difficult to compare accurately because of

varying assessment practices, property characteristics, and relief mechanisms.

The methodology used to derive the estimated tax burden for each tax is presented in the

section pertaining to that tax. The methodology used in this report is best suited to provide a

relative comparison of tax burdens, within a single tax type and within a single year, across each

of the jurisdictions studied. Comparisons across the different types of taxes or across years

should be made with caution. As in past years, readers are advised not to compare the

hypothetical tax burdens across years; any number of small changes in the assumptions of the

study can result in misleading information under such comparisons. The purpose of the study

remains to compare tax burdens on a hypothetical household in different jurisdictions in a

specific year, and not over time.

The individual income tax rates, exemptions, and deductions in effect for calendar year

2019 in the District of Columbia, Maryland, and Virginia are shown in Table 1, on page 7.

Factors used in the housing value assumptions are detailed in the property tax section, and the

assumed housing values by income level for each jurisdiction are shown in Table 2, page 10. The

assumptions used to derive the automobile tax burdens are contained in Table 5, page 17.

Table 6, page 19, presents detailed data on state and local tax burdens for each type of tax

by income level for each selected metropolitan area jurisdiction. The District's tax burden is

compared with the average for the metropolitan area at each income level for the four tax

categories, separately and combined, in Table 7, page 20. Chart 4 on page 21 presents the DC

combined tax burdens compared to the metro area averages at each income level.

Finally, selected state and local tax rates in the Washington metropolitan area as of

December 31, 2019 are outlined in Table 8, page 25. To provide context, selected demographic

information for the metro area jurisdictions is presented in Table 9, page 26.

Part I: A Comparison of Tax Burdens in Selected Washington Metropolitan Area Jurisdictions

2019 Tax Rates and Tax Burdens – Washington Metropolitan Area

Page 4

Individual Income Tax

Income Tax Calculations

The income tax burden of a hypothetical family is estimated using the actual income tax

system in each jurisdiction and assumptions about the sources of income for families at different

income levels. The features of the individual income tax systems used in the Washington, DC

Metropolitan Area are presented in Table 1 (page 7).

The five income levels used in this study are divided between wage and salary income. In

previous versions of this report, capital gains and interest income were included, in addition to

the assumptions of major itemized deductions on the following page. However, capital gains and

interest income are not included in the current report to remove some of the variation that

inconsistently changed the original income levels used, with little methodological benefit. (See

the following page for more information on the itemized deductions that continue to be included

in this report.) The following income levels are used for the income tax starting point in each

jurisdiction and the District of Columbia, where Spouse 1 is assumed to earn 70 percent of the

total income and Spouse 2 is assumed to earn 30 percent.

Gross

Income:

$25,000

$50,000

$75,000

$100,000

$150,000

Spouse 1:

$17,500

$35,000

$52,500

$70,000

$105,000

Spouse 2:

7,500

15,000

22,500

30,000

45,000

Total itemized deductions used for calculating state and local income taxes, which are

also used in the federal tax computation, are shown below. The methodology for two of the

itemized deductions—the medical and dental expenses deduction and the charitable contribution

deduction—have changed for the current report. In the past, the amounts for these deductions

were based on actual average deduction amounts for taxpayers within a range around each

income level for Washington, DC, taxpayers who were married filing jointly and had itemized

deductions. However, the pool of married filing joint taxpayers that also itemized was

insufficient at the lower income levels to produce representative deduction amounts. Therefore,

in the current report, Internal Revenue Service (IRS) data for all itemizers in tax year 2018 are

used to calculate the average percent of AGI reflected by each of these deductions, respectively.

For the gross medical deduction, the average share is eight percent of AGI. For charitable

contributions, the level of four percent of AGI is applied across incomes. These changes in the

methodology make the inputs in the income tax calculations more consistent across incomes and

conform more closely to the methodology across the other tax types (which do not rely on DC-

specific data).

Part I: A Comparison of Tax Burdens in Selected Washington Metropolitan Area Jurisdictions

2019 Tax Rates and Tax Burdens – Washington Metropolitan Area

Page 5

Gross Income Level

Deduction $ 25,000 $ 50,000 $ 75,000 $100,000 $150,000

Medical (Gross) 1/ 2,000 4,000 6,000 8,000 12,000

Nondeductible Medical 2/ -1,875 -3,750 -5,625 -7,500 -11,250

Net Medical Deduction 125 250 375 500 750

Deductible Taxes 3/ 3/ 3/ 3/ 3

Mortgage Interest 4/ 4/ 4/ 4/ 4/

Contribution Deduction 2/, 5/ 1,000 2,000 3,000 4,000 6,000

Total Deductions-without taxes

And mortgage interest 6/ 1,125 2,250 3,375 4,500 6,750

1/ Medical deductions allowed when the total is more than 7.5 percent of federal AGI. All or part of medical deduction

may be allowed in some states.

2/ New methodology for assumptions of medical and contribution deductions. 8% of AGI for medical (minus the 7.5% of

AGI limit); 4% for charitable. Data from: Table 2.1. Returns with Itemized Deductions: Sources of Income, Adjustments,

Itemized Deductions by Type, Exemptions, and Tax Items, by Size of Adjusted Gross Income, Tax Year 2018.

Available at this link.

3/The tax deduction varies from city to city and is based on real and personal property taxes computed in the current 2019

Study and individual income taxes computed in the 2018 study for tax year 2018.

4/ Assumed mortgage interest varies by income but at each income level is the same entire metro area and is based on 5th

year interest paid on a home purchased in 2014 at an interest rate of 4.17%.

5/ Contribution Deduction represents charitable contributions claimed.

6/ Note: the current report does not include miscellaneous deductions, taxable interest income or capital gains, which have

been included in previous reports. Further, if all itemized deductions do not exceed the amount of the standard deduction,

the standard deduction amount will be automatically used.

Because the Federal Earned Income Tax credit (EITC) at the $25,000 income level in

some states will determine the state’s EITC, it is necessary to compute the 2019 federal

individual income tax at each income level using the above assumptions. DC, Maryland, and

Virginia each allow taxpayers to begin their state income tax computations with federal adjusted

gross income (AGI)

Further, depending on levels of deductions used in each state, the standard deduction may

be more advantageous for certain taxpayers. In 2019, the federal standard deduction increased to

$24,400; and state level standard deductions vary by state. Because the federal standard

deduction was significantly increased in the Tax Cuts and Jobs Act of 2017 (TCJA), more of the

families included will now take the standard deduction. This also means that if states require

taxpayers taking the federal standard deduction to also take the state standard deduction, those in

states with standard deductions lower than their itemized deductions may face an increased tax

liability in 2019 as compared to 2017 (both Maryland and Virginia require taxpayers taking the

federal standard deduction to also to take the state standard deduction. The DC standard

deduction is now the same as at the federal level). For the current study of tax year 2019, all

families earning $75,000 per year and below would take the federal standard deduction as it was

higher than the itemized deductions assumed for these income levels in the report.

The 2019 deductible real and personal property taxes computed in the current year’s

Part I: A Comparison of Tax Burdens in Selected Washington Metropolitan Area Jurisdictions

2019 Tax Rates and Tax Burdens – Washington Metropolitan Area

Page 6

Metro Area study are used for the 2019 property tax deduction. For the 2019 state and local

individual income tax deduction, 2018 tax burdens from the previous year’s study were used.

Each of these figures was used in computing the 2019 federal income tax burden, which is the

starting point for the Metro-area income tax burden calculations.

The highest individual income tax rate in Maryland is 5.75 percent and is not reached

until taxable income exceeds $300,000 for joint filers ($250,000 for single filers). In addition,

Maryland local tax rates, which are applied to all taxable income, range from 3.03 percent in

Charles County, to 3.2 percent in Montgomery and Prince George’s Counties. At the $25,000

income level, one-half of the federal earned income credit is deducted from state tax liability in

Maryland (and nonrefundable), while 28 percent is fully refundable (meaning that the taxpayer

may receive money back if their credit is more than their tax liability). In contrast, Virginia's

maximum 5.75 percent tax rate is reached when taxable income exceeds $17,000 and 20 percent

of the federal earned income credit is deducted from Virginia’s tax liability (and not refundable);

and the District's maximum rate of 8.95 percent in 2019 was not reached until the $1,000,000

taxable income level is exceeded. At the $25,000 income level, eligible DC taxpayers received

40 percent of the federal earned income credit as a deduction from their District tax liability and

the DC credit is refundable.

Part I: A Comparison of Tax Burdens in Selected Washington Metropolitan Area Jurisdictions

2019 Tax Rates and Tax Burdens – Washington Metropolitan Area

Page 7

Table 1: Individual Income Tax Washington Metropolitan

Area (2019)

PERSONAL EXEMPTIONS

EXEMPTIONS

TAXABLE

INCOME 5/

RATES

DISTRICT OF COLUMBIA

Single

$0 1/

$0 - $10,000

$10,001-$40,000

$40,001-$60,000

$60,001-$350,000

$350,000-$1,000,000

Over $1,000,000

4.0%

$400 + 6.0% of excess > $10,000

$2,200 + 6.5% of excess > $40,000

$3,500 + 8.5% of excess > $60,000

$28,150 + 8.75% of excess > $350,000

$85,025, plus 8.95% of the excess above

$1,000,000

Married Filing Separately

Married Filing Jointly

Head of Household

Dependent (additional to federal)

Blind (additional to federal)

Age 65 and over (additional to

federal)

Standard Deduction

$24,400 1/

MARYLAND 2/

Single

$3,200

$0 - $1,000

$1,001-$2,000

$2,001-$3,000

$3,001-$150,000

$150,001-$175,000

$175,001-$225,000

$225,001-300,000

Over $300,000

2.0%

$20 + 3.00% of excess > $1,000

$50 + 4.00% of excess > $2,000

$90 + 4.75% of excess > $3,000

$7,072.50 + 5% of excess > $150,000

$8,322.50 + 5.25% of excess > $175,000

$10,947.50 + 5.5% of excess > $225,000

$15,072.50 + 5.75% of excess> $300,000

Married Filing Separately

$6,400

Married Filing Jointly

$6,400

Head of Household

$3,200

Dependent (additional)

$3,200

Blind (additional)

$1,000

Age 65 and over (additional)

$1,000

Standard Deduction

VIRGINIA

Single

$ 930

$0 - $3,000

$3,001-$5,000

$5,001-$17,000

Over $17,000

2.0%

$60 + 3.00% of excess >$3,000

$120 + 5.00% of excess > $5,000

$720 + 5.75% of excess > $17,000

Married Filing Separately

$ 930

Married Filing Jointly

$1,860

Head of Household

$ 930

Dependent (additional)

$ 930

Blind (additional)

$ 800

Age 65 and over (additional)

$ 800

Standard Deduction

Source: Survey of State Revenue Department Officials; State Web Sites; and Federation of Tax Administrators, “State Individual Income Taxes

for tax year 2019.” March 29, 2019. 2019 State Tax Handbook, Wolters Kluwer/ CCH Group, 2018.

1/ As a result of the 2017 Tax Cuts and Jobs Act and DC’s federal conformity provisions, DC personal exemptions are reduced to zero and

the federal standard deduction will apply thereafter. Standard deduction listed is for married couples filing jointly.

2/ Maryland rates do not include local rates that may be as low as 1.75% in Worcester County and as much as 3.20% in Howard, Montgomery

and Prince George’s Counties, among others.

3/ The standard deduction for an individual is 15% of Maryland AGI not to exceed $2,250 ($4,550 for joint and head of household returns and

those filing as qualifying widow(er) with dependent child). The minimum is $1,500 for single, married filing separately and dependent

taxpayers. All others are allowed a minimum of $3,000.

4/ Single - $3,000; married persons filing separately - $3,000; and married persons filing jointly or combined separate - $6,000.

5/ Brackets and rates are for married filing jointly.

Part I: A Comparison of Tax Burdens in Selected Washington Metropolitan Area Jurisdictions

2019 Tax Rates and Tax Burdens – Washington Metropolitan Area

Page 8

Income Tax Burdens

At the $25,000 income level, the metro area average individual income tax burden

(excluding DC) represents a negative 0.60 percent of family income (due to refunds through the

EITC). The metro area average income tax burden is 4.32 percent at $50,000; 5.00 percent at

$75,000; 4.68 percent at $100,000; and 4.70 percent at $150,000 (see Table 7, page 20).

The District’s individual income tax burden is lower than the average of the other metro

areas at every level except at the $100,000- and $150,000-income level. The District’s individual

income tax burden ranges from a negative $2,572, or negative 10.3 percent at the $25,000

income level to $8,745 or 5.8 percent at the $150,000 income level. (The family earning $25,000

per year in the District also receives a refund through the EITC, as well an income tax refund of

property tax paid through the Schedule H credit, which is available to renters). The Montgomery

and Prince George’s county individual income tax burdens exceed the metropolitan average at

every income level except at $25,000.

In those two Maryland counties, the tax burden is a negative 2.1 percent at the $25,000

income level, and 5.8 percent at the $150,000 income level in Montgomery County and 5.7

percent at that level in Prince George’s County. For the Virginia area jurisdictions (Arlington

County, Alexandria, Fairfax City, Fairfax County, and Falls Church), the average of the four

individual income tax burdens is 0 percent at the $25,000 level, and 4 percent at the $150,000

income level. (Chart 1 below presents income tax burdens in dollars, ranked by highest to lowest

burdens at the $150,000 income level.)

Chart 1: 2019 Washington Metropolitan Area Individual

Income Tax Burdens

Source: ORA.

Note: Negative income tax burdens are a result of refundable tax credits.

Part I: A Comparison of Tax Burdens in Selected Washington Metropolitan Area Jurisdictions

2019 Tax Rates and Tax Burdens – Washington Metropolitan Area

Page 9

Real Property Tax

Property Tax Calculations

Real property tax burdens in the metropolitan area are a function of residential real estate

values, the ratio of assessed value to market value, applicable tax deductions or credits, and the

tax rate. The District allows a homestead deduction from the value of residential property before

the tax is calculated on owner-occupied properties ($74,850 in 2019), while the Virginia

jurisdictions do not allow any deductions for the typical homeowner. Montgomery County,

Maryland offers a property tax credit to offset the county income tax for owner-occupied

properties which is applied to County property taxes. The amount set by the County Council for

tax year 2019 was $692 and was applied to each family in the study assumed to own a home. The

state of Maryland has a supplemental homeowners’ tax credit for incomes up to $60,000 per year

but is only applicable if property taxes exceed a certain amount. None of the study’s families in

Montgomery or Prince George's County would have qualified because calculated taxes did not

meet the limit required. Both the District of Columbia and the state of Maryland have limits on

the amount a property’s assessment can increase from one year to the next (both are capped at 10

percent), however neither of these are included in the study because it is a point in time

calculation.

The effective property tax rates used for property tax burden calculations for each of the

metropolitan jurisdictions, presented in Chart 2, page 14, indicate a variety of ranges in these

rates and are net of property assessment levels. For the present 2019 Study, median sales ratio

statistics have been included to derive an “effective assessment level” that results from

multiplying the statutory property assessment level times the median sales ratio statistic. Median

sales ratios are a measure of the property valuation and assessment practices within a

jurisdiction. A sales ratio (or assessment sales ratio) is the ratio of the appraised value of the

property to the sales price, or market value; the median is the median ratio value of all the

properties included in the study.

If property assessments do not keep up with market value,

residents’ property taxes will be lower than they would otherwise be if taxed at the full market

value of the property. Including the available median sales ratio statistic into the property tax

burden calculations is an attempt to reflect how property tax systems in each jurisdiction are

administered in practice.

In addition to tax rate and effective assessment level differences, data presented in Table

2, page 10, show assumed market value differences of a residence for purposes of this study at

the different income levels. The $25,000 income level families are assumed to reside in a rental

unit and the $50,000, $75,000, $100,000, and $150,000-income families are assumed to live in

an owner-occupied house. A series of assumptions and calculations were made to estimate the

median house value for the Washington, DC metropolitan area for each income level used in the

report.

Data for the area’s median house value and median income were retrieved from the

“Glossary for Property Appraisal and Assessment,” International Association of Assessing Officers. 2013. Page 150.

https://www.iaao.org/media/Pubs/IAAO_GLOSSARY.pdf.

Part I: A Comparison of Tax Burdens in Selected Washington Metropolitan Area Jurisdictions

2019 Tax Rates and Tax Burdens – Washington Metropolitan Area

Page 10

Census Bureau’s 2019 American Community Survey. A linear multiplier was calculated by

dividing the area’s median house value by its median household income for mortgage holders.

This multiplier was used to scale the house values to the various income levels in the report

(multiplying it by each income level). This assumption serves as an input for both the property

tax burden calculations and the mortgage interest deduction for the income tax burden. This

method, which has been used since 2012, assumes that house values increase in a linear fashion

with income. Since 2014, the use of median household income of mortgage holders, rather than

the median income of all households, has been used to calculate the linear multiplier. However,

any analysis should focus on the relative rankings within a given year. Table 2 below presents

the metro area house value assumptions used in this study.

The mortgage interest amount (for use as an itemized deduction in the income tax) in the

2019 study is derived by calculating an amortization schedule for the estimated value of a house

purchased in 2014.

Table 2: Housing Value Assumptions For

Major Washington Metropolitan Area Jurisdictions

Calendar Year 2019 1/

FAMILY

INCOME

DISTRICT OF COLUMBIA,

MONTGOMERY COUNTY, MD

PRINCE GEORGE’S COUNTY, MD

ALEXANDRIA, VA

ARLINGTON COUNTY, VA

FAIRFAX COUNTY, VA

FALLS CHURCH, VA

FAIRFAX CITY, VA

$ 50,000

157,090

$ 75,000

235,635

$100,000

314,180

$150,000

471,269

Source: ORA.

1/ For the $50,000 income levels and above, data on 2019 median household incomes for mortgage holders and median

house values for the Washington DC, MSA were retrieved from the Census Bureau's ACS 2019. A multiplier was

then applied to each income based on the relationship of median income to median home value.

Property Tax Equivalent of Rent

As previously noted, the study assumes that the family with an annual income of $25,000

does not own a home (and as a result does not pay property tax directly), but instead rents.

Part I: A Comparison of Tax Burdens in Selected Washington Metropolitan Area Jurisdictions

2019 Tax Rates and Tax Burdens – Washington Metropolitan Area

Page 11

Given the high real estate values in the metro area, the assumption that families earning $25,000

per year rent is likely more realistic than the assumption that they own a home. Because renters

indirectly pay property taxes through their rent,

this study and previous Tax Burden Studies

calculate a percentage of rent constituting property taxes. This concept is called the property tax

equivalent of rent (PTER) and is an important tool in comparing the incidence of the property tax

on renters versus homeowners. In a 2020 50-State Property Tax Comparison report, the Lincoln

Institute of Land Policy and the Minnesota Center for Fiscal Excellence note that states vary in

how they tax rental properties in comparison to homesteads; on average cities tax apartments 34

percent more than homesteads.

Their report presents a table illustrating this information for the

largest city in each state; Charleston, South Carolina, has the largest difference in effective rates

between apartment buildings and homesteads, taxing apartments more than four times the

effective rate of that levied on homesteads.

Conversely, in six of the largest cities in each state

(and DC), apartments are given preferential treatment over homesteads with the most preference

toward apartments given in Bridgeport, CT.

In eight cities, apartments are given the same

treatment as homesteads.

To relieve the implicit tax burden on renters that exists in some locations, some states

have property tax circuit breaker programs that offset renters’ tax burdens (often through the

income tax since they do not pay property taxes directly). These programs must make

assumptions of the PTER to calculate the amount that renters are paying in property taxes, and

the amount of relief they will receive through the circuit breaker program. Of the states that offer

circuit breaker programs, the PTER assumptions generally range from 6 to 25 percent (NM has a

low of 6 percent while MA uses a 25 percent assumption); on average, states assume that 17

percent of rent goes toward paying property taxes.

DC’s circuit breaker program assumes 20

percent.

Prior to the 2016 Tax Burden Study, a 20 percent assumption was used with some

reservation given that it has a large impact on the calculated tax burdens of the families earning

$25,000 per year. In particular, the assumption often seemed unrealistic in cities with higher

rental prices where calculated PTERs would be the highest. However, rental buildings in more

competitive markets may not be able to pass on all taxes paid, given that prices are set by the

local market, and as the Lincoln report illustrates, the specific PTER level in a city is primarily

based on the tax system in each jurisdiction. It is not clear whether states with higher PTER

percentages in their circuit breakers have data backing up the percentage of PTER in their state,

or if these states are using the circuit breaker to provide a subsidy to lower income renters hit

hardest by higher rental markets.

In a January 2016 report, the Minnesota Department of

Revenue (MN DOR) used several techniques based on both ACS and internal tax data to assess

the percentage of rent that constitutes property taxes throughout Minnesota. MN DOR found the

statewide PTER hovered around 15 percent each year from 2009 to 2014, though in Minneapolis

“50-State Property Tax Comparison Study for Taxes Paid in 2018.” The Lincoln Institute of Land Policy and the Minnesota Center for Fiscal

Excellence. June 2019: pg. 4.

Ibid.

Ibid, pg. 104-5.

Ibid. The study found that in Washington, DC, the classification ratio between apartments and homesteads is 1.07, indicating that homesteads

are treated slightly preferentially to rental buildings by the property tax rates (exclusive of credits) in DC.

Based on analysis of state programs in the Lincoln Institute of Land Policy’s Significant Features of the Property Tax Database for 2017.

This discussion does not intend to assess appropriate levels of PTER used in circuit breaker programs, or to advocate that they

be changed. It is intended solely to consider whether and how these levels are used as an input for the Tax Burden Study’s calculation of renters’

tax burdens as compared to homeowners’ tax burdens across the 50 states.

Part I: A Comparison of Tax Burdens in Selected Washington Metropolitan Area Jurisdictions

2019 Tax Rates and Tax Burdens – Washington Metropolitan Area

Page 12

it was often up to 16.9 percent.

After considering the available information we have used a level of 15 percent for PTER

since the 2016 Study to be more realistic in the property tax burden on renters, particularly in

cities with more expensive rental markets. Future refinements may be made as new information

and data become available. To compute a percentage of said rent constituting property taxes for

the 51-City Tax Burden Study, the property tax equivalent of rent (PTER) was calculated by first

obtaining data on 2019 median rents for each MSA from the U.S. Department of Housing and

Urban Development.

The PTER for each jurisdiction was calculated as 15 percent of the

median rent for the Washington, DC MSA. Unlike the 51-City Study in which median rents for

each metropolitan area are used to reflect different housing markets in different areas, all the

jurisdictions in the present study are in the Washington, DC, metropolitan statistical area, and

thus have the same housing assumptions, for both rental costs and house values.

The 2019 median rent for a studio apartment was $1,540 per month in the DC MSA.

Even with the lower assumption of PTER in the current study, taking 15 percent of this rent over

an entire year implies that the lowest income families in the report are spending 74 percent of

their incomes on rent in the Washington, DC area. However, viewed in the context of some DC

metro area statistics it may not be that unrealistic. In 2017, of renters earning less than

$50,000/year, more than 80 percent were spending more than 30 percent of their income in

rent.

Further, a 2016 DC Fiscal Policy Institute Analysis of 2014 Census data found that 42

percent of extremely low-income renters (between $16,100 - $32,100/year for a family of four)

in DC paid 80 percent of their income or more in rent, while over half of renters at this income

level paid more than half of their income in rent.

Property Tax Burdens

Real property tax burdens for District of Columbia residents fall below the area wide

averages (excluding DC) at all income levels, except at the $25,000 income level where property

tax burdens are assumed to be the same across the region. As previously noted, the family

renting in DC and earning $25,000 would receive a property tax credit through the income tax

that is presented in the study as an offset to the income tax burden. Using the same housing cost

assumptions across the region means that the real property tax burdens for those assumed to own

their homes only reflect differences in both real property tax rates and property tax relief

provisions among the metropolitan area jurisdictions. The metropolitan area average burden for

the real property tax is 3.33 percent of income at the $50,000 income level; 3.40 percent at the

$75,000 level; 3.43 percent at the $100,000 level; and 3.46 percent at the $150,000 level (Table

7, page 20). Chart 3 below presents property tax burdens in dollars, by income level, for each

jurisdiction.

To calculate property tax burdens, nominal real estate tax rates for each jurisdiction are

The MN Renter’s Property Tax Refund program allowed renters to qualify for a refund on their rent of up to 17% of rent paid

(dependent on the renter’s income level) in 2018.

U.S. Department of Housing and Urban Development, “2017 50

Percentile Rent Estimates.” Data for studio apartments used.

Analysis of

U.S. Census Bureau, 2013-2017 American Community Survey 5-Year Estimates.

Zippel, Claire. “A Broken Foundation: Affordable Housing Crisis Threatens DC’s Lowest-Income Residents.”

DC Fiscal Policy Institute. December 8, 2016.

Part I: A Comparison of Tax Burdens in Selected Washington Metropolitan Area Jurisdictions

2019 Tax Rates and Tax Burdens – Washington Metropolitan Area

Page 13

multiplied by an effective assessment level (which is the announced or statutorily prescribed

assessment level times the median assessment sales ratio statistic for each jurisdiction). The

effective property tax rate (which does not include homestead or other deductions or exemptions)

is then multiplied by the housing values to determine the real property tax due. Homestead

exemptions or other property tax relief provisions are deducted or included as applicable in the

calculation of the final property tax burden.

For the District of Columbia, the nominal tax rate of $0.85 per $100 of assessed value is

multiplied by the effective assessment level of 97.5 percent (statutory assessment level of 100%

X median assessment sales ratio of 97.5%), and then applied to the market value of the house,

less $74,850 for the 2019 homestead exemption. Therefore, the homeowner with $50,000 in

income would pay tax on $82,240 of house value; on $160,785 at the $75,000 income level; on

$239,330 of house value at the $100,000 income level; and on $396,419 at the $150,000 income

level (each of these amounts represents the median house value at that income level minus

$74,850 for the homestead deduction).

Because Virginia's property tax relief program is targeted toward the elderly (age 65 or

older), and to persons permanently and totally disabled whose incomes do not exceed $72,000,

no adjustments are made in the property tax burdens for the hypothetical family of three in the

Virginia jurisdictions.

In calculating the real property tax burdens in the Maryland jurisdictions, nominal rates of

$1.091 per $100 of value in Montgomery County and $1.465 per $100 of value in Prince

George’s County were used as the starting point to calculate the effective rates as described

above. These nominal rates in Maryland include the countywide rate, plus the state rate ($0.112

per $100 of value). The Montgomery County rate also includes a transit tax, fire district tax, a

weighted average of 23 municipal district taxes, and a tax for the Maryland National Capital Park

and Planning Commission (MNCPPC), while the Prince George’s County rate includes a

stormwater/flood control tax and a tax for the MNCPPC and a Washington Suburban Transit

Commission (WSTC). As previously mentioned, in 2019 Montgomery County, Maryland

offered an income tax offset credit on property tax bills for owner-occupied residences of $692.

Table 3: Calculation of Effective Residential Property Tax

Rates

NOMINAL RATE

EFFECTIVE ASSESSMENT LEVEL

EFFECTIVE RATE

JURISDICTION

PER $100 of Assessed Value

(Statutory Assessment Level x

Median Sales Ratio) *

PER $100 of Assessed Value

(Nominal Rate x Effective

Assessment Level)

Prince George's Co, MD

1.465

95.30%

1.3961

Falls Church, VA

1.355

93.75%

1.2703

Fairfax Co, VA

1.18

91.87%

1.0841

Alexandria, VA

1.13

95.84%

1.0830

Montgomery Co, MD

1.091

95.70%

1.0437

Fairfax City, VA

1.075

95.91%

1.0233

Arlington, VA

1.026

93.56%

0.9599

Washington, DC

0.85

97.50%

0.8288

Source: Survey of local revenue officials and local government web sites. Rates as of December 31, 2019.

Note: Maryland jurisdictions’ rates include state rate of $0.112/$100 of assessed value. Rate for Montgomery County, Maryland

is a weighted rate that includes transit tax, fire district tax, municipal district taxes, and the Maryland-National Capitol Park and

Part I: A Comparison of Tax Burdens in Selected Washington Metropolitan Area Jurisdictions

2019 Tax Rates and Tax Burdens – Washington Metropolitan Area

Page 14

Planning Commission (MNCPPC) tax. Prince George’s County rate includes rates for MNCPPC, transit, and stormwater

districts. Arlington rate includes stormwater fee. All jurisdictions have a statutory assessment level of 100% of market value.

Chart 2: 2019 Washington Metropolitan Area Effective

Property Tax Rates (Per $100 of Assessed Value)

Source: Survey of local revenue officials and local government web sites. Rates as of December 31, 2019 and

presented as effective rates after incorporating median assessment sales ratios.

Chart 3: 2019 Washington Metropolitan Area Real Property

Tax Burdens

Source: ORA.

Notes: Rental tax burden calculated differently. See pages 10-12 for details. A DC property tax credit for renters is

presented with the income tax burdens.

Sales Tax

Sales Tax Calculations

The sales tax burdens differ among the jurisdictions because some consumption items

included are taxed at a different rate than the general sales tax rate. Sales tax rates in 2019 for

certain items in the metro area are presented below.

Part I: A Comparison of Tax Burdens in Selected Washington Metropolitan Area Jurisdictions

2019 Tax Rates and Tax Burdens – Washington Metropolitan Area

Page 15

Table 4: Selected Sales Tax Rates

JURISDICTION

GENERAL

RATE

GROCERIES

RESTAURANT

MEALS

ADMISSIONS

DISTRICT OF COLUMBIA

6.0%

Exempt

10.0%

10.25%

MARYLAND

6.0%

Exempt

6.0%

10.0%

VIRGINIA

6.0% 1/

2.5% 1/

6.0%-10.0%

1/ Combined local and state rate.

2/ There is no state tax on admissions in Virginia; however, Alexandria does levy a 10% admissions tax, not to exceed $0.50/person.

The estimated sales tax burdens for hypothetical households at each of the five income

levels are reported in Table 6, page 19. These burdens are derived by applying local and state

sales tax rates to data on average 2019 levels of consumption for various items by income level

provided by the U.S. Bureau of Labor Statistics in the Consumer Expenditure Survey (CES). The

average expenditures by income level have been adjusted for a 3-person household. It is

important to note that the sales tax burdens will be a function of the size of the sales tax base in a

particular jurisdiction and the specific sales tax rates that apply to the consumer items included.

The same CES categories have been included since the 2013 Tax Burden Study and

include: food (at home); food (away from home); over-the-counter drugs; housekeeping supplies,

household furnishings, and equipment; apparel and footwear; new and used cars and trucks;

vehicle finance charges, maintenance and repairs, and insurance; vehicle rentals, leases, and

licenses and other charges; public and other transportation; entertainment: fees and admissions,

audio visual equipment and services, and reading; and personal care products and services.

Factoring in both state and local sales tax rates for the jurisdictions in this study,

Maryland, DC, and Virginia had the same general sales tax rate of 6.0 percent at the end of 2019.

The District has higher rates for alcoholic beverages, restaurant meals, parking, and hotel rooms,

than do Maryland and Virginia.

The District, like Maryland, exempts all non-snack food

purchased in grocery stores from the general sales tax. Virginia levies a 2.5 percent sales tax on

all food purchased in grocery stores.

Residential usage of utilities is not in the general sales and use tax base in the District and

the State of Maryland, and gas, electricity, or water delivered to consumers through mains, lines

or pipes are not subject to the sales tax in Virginia. Further, utility taxes levied by Montgomery

and Prince George's Counties are not accounted for in the tax burden calculations. While

Montgomery County's energy tax is levied upon the distributor, its cost is effectively borne by

In cases where a category includes items that are both taxed and not taxed, such as “drugs” which includes both

prescription and over the counter (OTC) drugs, the expenditure amount is divided by two before applying the tax

rate of the item that is taxed (For example, states often tax OTC drugs but not prescription drugs. Similarly, states

often tax personal care products, but not personal care services.)

The District’s general sales tax rate increased from 5.75 to 6 percent on October 1, 2018.

Part I: A Comparison of Tax Burdens in Selected Washington Metropolitan Area Jurisdictions

2019 Tax Rates and Tax Burdens – Washington Metropolitan Area

Page 16

the customer. Prince George's County sets the tax rates annually based on a formula driven by

total consumption and revenue for each type of energy in prior years.

Sales Tax Burdens

The District’s sales tax burden is just above the metro area average (excluding DC) at

each income level. The District sales tax burdens generally are higher than those in Maryland but

tend to be lower than those in Virginia at the $25,000/year income level (except in Fairfax

County, which is lower than the District). The District has the highest sales tax burdens of all the

jurisdictions at the $50,000, $75,000, and $100,000 and $150,000-income levels, while the

Virginia jurisdictions were the highest for the $25,000 income level. As noted above, the general

sales tax rate in the District of Columbia is 6 percent (the same as Maryland and Northern

Virginia’s state plus local general rates). However, each jurisdiction has a multiple rate system in

which sales tax rates on items such as food consumed away from home and rental vehicles are

higher than the general rate, thus the tax burdens calculated for this study differ from one

another.

Automobile Tax

The taxes related to ownership of automobiles include the gasoline tax, motor vehicle

registration fees, and, where applicable, personal property taxes. The assumptions used to

calculate the automotive tax burdens are shown in Table 5, page 17.

Virginia localities are the only area jurisdictions that levy a personal property tax on

automobiles. The personal property tax rates for the seven Virginia jurisdictions included in this

study vary from $3.70 to $5.33 per $100 of value and are presented in Table 8 (page 25). Since

1999, the Commonwealth of Virginia has reimbursed all localities in Virginia for the vehicle

portion of the Personal Property Tax as part of the Personal Property Tax Relief Act (PPTRA).

From 2002 to 2005, the reimbursement amount was 70 percent of the first $20,000 of a vehicle’s

assessed tax bill. Beginning in 2007, Virginia began to reimburse localities a fixed amount based

on the 2004 level of state reimbursement. Unless the General Assembly provides additional

funding, that reimbursement is not expected to increase, and with no increases, it will cover a

gradually decreasing portion of the tax on vehicles. For 2019, the reimbursement to Alexandria

covered 53 percent of the tax bill for vehicles with assessed values between $1,000 and $20,000.

In Arlington County, vehicles that are valued at $3,000 or less, and are PPTR eligible, have no

tax liability and pay only an annual decal fee. For vehicles with assessed values between $3,000

and $20,000, the Arlington County reimbursement covered 28 percent of the tax bill. In Fairfax

County, the resident’s tax bill was reduced by 60 percent on the assessed value between $1,000

to $20,000.

The basis for assessing the tax also differs among the Virginia area jurisdictions.

Alexandria, Fairfax County, and Falls Church use the vehicle’s trade-in value; the clean loan

value is used in Arlington County. For both methods, however, values are obtained from the

National Automobile Dealers Association Used Car Pricing Guide.

Part I: A Comparison of Tax Burdens in Selected Washington Metropolitan Area Jurisdictions

2019 Tax Rates and Tax Burdens – Washington Metropolitan Area

Page 17

The District of Columbia’s registration fee is the highest in the metropolitan area. In the

District, the annual fee for a vehicle weighing less than 3,500 pounds (Class I) is $72; for

vehicles weighing 3,500 pounds to 4,999 pounds (Class II), the fee is $115; for vehicles 5,000

pounds and over (Class III), the fee is $155; and for Class IV, clean fuel or electric vehicle, the

fee is $36 (See Table 15, page 41). For tax year 2019, Maryland’s fees are slightly lower than the

District’s; the fee for vehicles less than 3,700 pounds is $135 for two years ($67.50 for one year),

and for vehicles over $3,700 pounds it is $187 for two years ($93.50 for 1 year).

The District of Columbia gasoline tax rate of 23.5 cents per gallon at the end of 2019 is

lower than the rate in both Maryland and Virginia.

Effective July 1, 2013, Virginia’s state

gasoline tax rate changed from 17.5 cents per gallon to 3.5 percent of the statewide average

wholesale price per gallon. In 2019, this equated to 16.8 cents per gallon (including a 0.6 cents

per gallon storage tank fee). In addition, since 2018 there is now a Virginia Motor Vehicle Fuel

Sales tax which adds 7.6 cents per gallon. There is also a special 2.1 percent sales tax levied by

all the Northern Virginia jurisdictions, making the total tax used in this study 30.12 cents per

gallon. In 2015, Maryland’s gas tax increased from 23.5 cents per gallon to 32.1 cents per gallon

and has further increased to 36.79 cents per gallon at the end of 2019.

Table 5: Automobile Tax Assumptions 2019

Market

Values

Estimated

Engine

Mileage

Annual

Income

Size

Retail

Trade-In

Loan

Per

Gasoline

Level

Description of

Auto

Liters 1/

Weight

Year

Price 2/

Value 2/

Gallon 1/

Usage 3/

$ 25,000

Sedan, 4 Door

1.8

2,920 lbs.

2016

$13,575

$10,300

$13,439

517 gallons

4-cylinder, Auto

$ 50,000

Sedan, 4 Door

1.4

2,930 lbs.

2018

$14,100

$10,950

$13,959

441 gallons

4 Cylinder, Manual

$ 75,000

Sedan, 4 Door

2.5

3,340 lbs.

2018

$20,175

$16,400

$19,973

455 gallons

4 Cylinder, Automatic

4WD Utility, 4 Door

3.5

4,464 lbs.

2013

$18,050

$14,875

$17,870

395 gallons*

6 Cylinder, Automatic

$100,000

Sedan, 4 Door

2.5

3,906 lbs.

2018

$22,925

$18,725

$22,696

500 gallons

6 Cylinder, Automatic

4WD Utility, 4 Door

3.5

4,697 lbs.

2013

$17,675

$14,250

$17,498

375 gallons*

6 Cylinder, Automatic

$150,000

Sedan, 4 Door

2.0

3,814 lbs.

2019

$54,220

$50,580

$53,678

600 gallons

6 Cylinder, Automatic

AWD Utility, 4 Door

3.5

4,095 lbs.

2015

$18,550

$15,150

$18,365

313 gallons*

6 Cylinder, Automatic

1/ Gas Mileage Guide, EPA fuel economy estimates for city driving, US Department of Energy. http://www.fueleconomy.gov/

2/ National Automobile Dealers Association Used Car Guide. http://www.nadaguides.com

3/ Assumes 15,000 miles driven for primary car; 7,500 for secondary car (secondary car denoted with an asterisk).

A surcharge went

into effect for fiscal year 2021. The surcharge will be $0.103 per gallon, and will be increased annually, beginning on

October 1, 2022, by the cost-of-living adjustment

Part I: A Comparison of Tax Burdens in Selected Washington Metropolitan Area Jurisdictions

2019 Tax Rates and Tax Burdens – Washington Metropolitan Area

Page 18

Auto Tax Burdens

Virginia localities have the highest auto tax burdens at all income levels, with Fairfax

City ranking highest at all levels except the $150,000 level, where Arlington is highest. DC has

the lowest auto tax burdens at all levels, with Montgomery and Prince George’s Counties in

Maryland ranking sixth and seventh at all levels. The District and Maryland jurisdictions do not

levy a personal property tax on automobiles, as do Virginia localities.

Part I: A Comparison of Tax Burdens in Selected Washington Metropolitan Area Jurisdictions

2019 Tax Rates and Tax Burdens – Washington Metropolitan Area

Page 19

Table 6: 2019 Major State & Local Tax Burdens for a Family of Three

In Selected Washington Metropolitan Area Jurisdictions

TAX

DISTRICT

COLUMBIA

MONTGOMERY

COUNTY

PRINCE

GEORGE’S

COUNTY

ALEXANDRIA

ARLINGTON

COUNTY

FAIRFAX

COUNTY

FAIRFAX

CITY

FALLS

CHURCH

$25,000 INCOME LEVEL

Income 1/

-2572

-526

Real Property

2,772

Sales and Use

945

844

853

954

840

954

Automobile

193

258

419

595

389

645

470

TOTAL

1,339

3,348

3,357

4,145

4,321

4,001

4,371

4,196

RANK

$50,000 INCOME LEVEL

Income

1,338

2,704

1,940

Real Property

682

948

2,193

1,701

1,508

1,703

1,607

1,996

Sales and Use

1,115

992

1,004

1,111

967

1,111

Automobile

176

230

413

591

378

649

466

TOTAL

3,311

4,874

6,132

5,165

5,150

4,989

5,307

5,512

RANK

$75,000 INCOME LEVEL

Income

2,891

4,691

3,377

Real Property

1,333

1,767

3,290

2,552

2,262

2,554

2,411

2,993

Sales and Use

1,370

1,228

1,250

1,294

1,135

1,294

Automobile

387

475

1,056

1,535

923

1,680

1,194

TOTAL

5,980

8,161

9,706

8,278

8,467

7,990

8,762

8,858

RANK

$100,000 INCOME LEVEL

Income

4,827

6,679

5,311

4,155

4,193

4,150

4,131

4,128

Real Property

1,983

2,587

4,386

3,403

3,016

3,406

3,215

3,991

Sales and Use

1,643

1,481

1,514

1,530

1,341

1,530

Automobile

436

510

1,148

1,627

962

1,758

1,250

TOTAL

8,889

11,257

11,721

10,235

10,366

9,859

10,633

10,899

RANK

$150,000 INCOME LEVEL

Income

8,745

8,675

8,488

6,471

6,518

6,458

6,371

6,383

Real Property

3,285

4,227

6,580

5,104

4,524

5,109

4,822

5,987

Sales and Use

2,030

1,842

1,893

1,826

1,607

1,826

Automobile

445

524

2,987

3,256

2,411

3,122

2,195

TOTAL

14,505

15,268

17,484

16,388

16,124

15,585

16,142

16,391

RANK

Source: ORA Analysis. Note: Numbers may not add to totals due to rounding.

1/ Negative numbers result from refundable income tax credits.

Part I: A Comparison of Tax Burdens in Selected Washington Metropolitan Area Jurisdictions

2019 Tax Rates and Tax Burdens – Washington Metropolitan Area

Page 20

Table 7: Summary of Average Tax Burdens for Selected Washington

Metropolitan Area Jurisdictions and DC, 2019

INCOME

TAX BURDENS

PERCENT OF INCOME

AREA

AVERAGE

(excluding DC) 1/

DISTRICT

COLUMBIA

AREA

AVERAGE

(excluding DC) 1/

DISTRICT

COLUMBIA

OVERALL BURDEN

$ 25,000

3,963

1,339

15.85%

5.35%

$ 50,000

5,304

3,311

10.61%

6.62%

$ 75,000

8,603

5,980

11.47%

7.97%

$100,000

10,710

8,889

10.71%

8.89%

$150,000

16,197

14,505

10.80%

9.67%

INDIVIDUAL INCOME

$ 25,000

(150)

(2, 572)

-0.60%

-10.29%

$ 50,000

2,158

1,338

4.32%

2.68%

$ 75,000

3,752

2,891

5.00%

3.85%

$100,000

4,678

4,827

4.68%

4.83%

$150,000

7,052

8,745

4.70%

5.83%

REAL PROPERTY

$ 25,000

2,772

11.09%

$ 50,000

1,665

682

3.33%

1.36%

$ 75,000

2,547

1,333

3.40%

1.78%

$100,000

3,429

1,983

3.43%

1.98%

$150,000

5,193

3,285

3.46%

2.19%

SALES AND USE

$ 25,000

908

945

3.63%

3.78%

$ 50,000

1,058

1,115

2.12%

2.23%

$ 75,000

1,255

1,370

1.67%

1.83%

$100,000

1,494

1,643

1.49%

1.64%

$150,000

1,807

2,030

1.20%

1.35%

AUTOMOBILE

$ 25,000

434

193

1.73%

0.77%

$ 50,000

422

176

0.84%

0.35%

$ 75,000

1,048

387

1.40%

0.52%

$100,000

1,109

436

1.11%

0.44%

$150,000

2,145

445

1.43%

0.30%

Source: ORA Analysis. Note: Numbers may not add to totals due to rounding.

1/ Negative numbers result from a refundable Earned Income Tax Credit in DC and MD (and additionally DC has a refundable renter’s property tax credit represented in the

income tax burden).

Part I: A Comparison of Tax Burdens in Selected Washington Metropolitan Area Jurisdictions

2019 Tax Rates and Tax Burdens – Washington Metropolitan Area

Page 21

Chart 4: DC’s Combined Tax Burdens Compared

With Average of Other Metro Areas, 2019

Source: ORA.

Part I: A Comparison of Tax Burdens in Selected Washington Metropolitan Area Jurisdictions

2019 Tax Rates and Tax Burdens – Washington Metropolitan Area

Page 22

Chart 5: Estimated Tax Burdens for

Five Hypothetical Families, 2019

(Axis scaled to highest income level)

Income = $25,000/Year

Income = $50,000/Year

Income = $75,000/Year

Part I: A Comparison of Tax Burdens in Selected Washington Metropolitan Area Jurisdictions

2019 Tax Rates and Tax Burdens – Washington Metropolitan Area

Page 23

Chart 5: Estimated Tax Burdens for

Five Hypothetical Families, 2019,

Continued

Income = $100,000/Year

Income = $150,000/Year

Source: ORA Analysis. Jurisdictions are sorted by highest combined burden.

Part I: A Comparison of Tax Burdens in Selected Washington Metropolitan Area Jurisdictions

2019 Tax Rates and Tax Burdens – Washington Metropolitan Area

Page 24

Map 1: Combined 2019 Metropolitan Area Tax Burdens

(Income, Property, Sales, & Auto) as a % of Income (Family

Earning $75,000/Year)

Source: ORA Analysis. Note: The lighter green shading represents a lower tax burden.

Montgomery County

Fairfax County

Alexandria

Falls Church

Arlington

Fairfax City

Prince

George’s

County

Part I: A Comparison of Tax Burdens in Selected Washington Metropolitan Area Jurisdictions

2019 Tax Rates and Tax Burdens – Washington Metropolitan Area

Page 25

Table 8: Selected State and Local Tax Rates in the

DC Metropolitan Area as of December 31, 2019

TAX

DISTRICT

COLUMBIA

CHARLES

COUNTY

MONT-

GOMERY

COUNTY

PRINCE

GEORGE’S

COUNTY 1/

ALEX-

ANDRIA

ARLING-

TON

COUNTY

FAIRFAX

CO.

FALLS

CHURCH

LOU-

DOUN

CO.

PRINCE

WILLIA

CO.

FAIRFAX

CITY

PROPERTY

Nominal Rate

(/$100 of value)

$0.850

$1.317

$1.091

$1.465

$1.130

$1.026

$1.18

$1.355

$1.045

$1.208

$1.075

Assessment

Level

100.0%

Effective

Assessment level

(incl. Median Sales

Ratio)

97.50%

92.90

95.70%

95.30%

95.84%

93.56%

91.87%

93.75%

91.49%

90.28%

95.19%

Effective Rate

(per $100 of value)

$0.8288

$1.2235

$1.0437

$1.3961

$1.0830

$0.9572

$1.0841

$1.2703

$0.9561

$1.0906

$1.0233

SALES AND USE

General Rate

6.0%

INDIVIDUAL

INCOME

(State Rates)

4.0% -

8.95%

2% -

5.75%

2% -

5.75%

2% -

5.75%

2% -

5.75%

2% -

5.75%

2% -

5.75%

2% -

5.75%

2% -

5.75%

2% -

5.75%

2% -

5.75%

(Local Rates)

3.03%

3.2%

PERSONAL

PROPERTY 5/

(per $100 of value)

$3.40

$3.01

$2.43

$3.38

$5.33

$5.00

$4.57

$5.00

$4.20

$3.70

$4.13

AUTO REGISTRATION

3,499 lbs. Or less

$72.00

$67.50

$30.75

$63.75

$55.75

$63.75

3,500 –4,000 lbs.

$115.00

$67.50/

$93.50

$67.50/

$93.50

$67.50/

$93.50

$30.75

$63.75

$55.75

$63.75

4,001– 4,999 lbs.

$115.00

$93.50

$35.75

$68.75

$73.75

$68.75

$60.75

$68.75

Over 4,999 lbs.

$155.00

$93.50

$35.75

$68.75

$73.75

$68.75

$60.75

$68.75

GASOLINE TAX

(Cents/ Gallon)

23.5

10/

36.79

11/

36.79

11/

36.79

11/

30.12

12/

30.12

12/

30.12

12/

30.12

12/

30.12

12/

30.12

12/

30.12

12/

Source: Survey of local government officials and local government web sites.

1/ Real estate rates shown include the Maryland state real property tax rate of 11.2 cents per $100 of assessed value. Rate for

Montgomery County, Maryland is a weighted rate that includes transit tax, fire district tax, municipal district taxes and Maryland -

National Capital Park and Planning Commission (MNCPPC). Prince George’s County rate includes rates for MNCPPC, transit,

and stormwater districts. Arlington rate includes stormwater fee.

2/ Effective tax rates listed here are net of assessment value and include median assessment sales ratios, but do not reflect any exemptions or

credits. See page 12-13 for a discussion of the addition of median assessment sales ratios for this year.

3/ There is a $74,850 homestead exemption for property that is owner-occupied. The exemption amount increased to $75,700 on October 1,

2019 (effective for DC's Real Property Tax Year 2020).

4/ State rate is 5% and local rate is 1%.

5/ Effective rate per $100. Applicable to private autos in Northern Virginia jurisdictions. Also, boats, trailers, and motorcycles.

6/ First $225,000 of value is exempt from tax.

7/ Fairfax City, and Arlington, Fairfax, and Loudon Counties use the NADA Used Car Guide clean trade-in value as basis for assessing tax.

Alexandria uses the loan value.

8/ Class IV, clean fuel or electric vehicle, the fee is $36.

9/ Includes $30.75 state registration fee for vehicles 4,000 pounds or less; $35.75 for vehicles over 4,000 pounds.

10/ The tax is 8 percent of the average wholesale price of a gallon of regular unleaded gasoline. The floor on the wholesale price for the

calculation of the tax is $2.94, or 23.5 cents per gallon. This is the average wholesale price in effect as of October 1, 2019. As of Oct. 1, 2020, there is a

surcharge of $0.053 per gallon, which will increase to $0.103 per gallon Oct. 1, 2022, and increase annually thereafter with a cost of living adjustment.

11/ This represents a combined rate of the motor fuel tax and the sales and use tax equivalent (SUTE).

12/ In December 2019, the fuel tax in Virginia was $0.162/gallon, plus a $0.006/gal storage tank fee, plus a $0.076 state MV excise tax. There is

an additional 2.1 percent sales tax on the total sales price, which based on a sales price of $2.61/gal in December 2019, brings the state +

local total gas tax in Virginia to $0.3012/gal. Note: The fuel tax increased from $0.162/gal to $0.212/gal on July 1, 2020.

Part I: A Comparison of Tax Burdens in Selected Washington Metropolitan Area Jurisdictions

2019 Tax Rates and Tax Burdens – Washington Metropolitan Area

Page 26

Table 9: Demographic Statistics for Selected

Metropolitan Area Jurisdictions, 2019

Montgomery

County

Prince

George’s

County

Alexandria

Arlington

County

Fairfax

County

2019 Total Population 1/

705,749

1,050,688

909,327

159,428

236,842

1,147,532

Number of Households

291,570

368,897

316,361

71,005

111,887

400,186

Average Household Size

2.29

2.83

2.81

2.23

2.08

2.84

Number of Married

Couples with Own

Children <18

27,589

93,053

50,153

10,739

18,282

109,626

Households w/ children

<18

47,438

118,203

80,298

15,570

22,502

129,150

Owner-Occupied

Housing Rate

41.5%

64.8%

62.6%

44.6%

41.8%

67.4%

Median Value - Owner

Occupied Units w/ a

Mortgage

643,800

497,500

337,700

581,800

761,800

583,600

Median Gross Rent

1,603

1,788

1,469

1,781

1,993

1,900

Median Household

Income

92,266

110,389

86,290

103,284

119,755

128,374

Median Family Income

130,291

135,141

100,654

138,441

160,454

151,028

Poverty Rate,

(Population for whom

Poverty Status is

determined)

13.5%

7.4%

8.6%

6.0%

School System

Enrollment (3 years and

over)

169,418

266,131

233,171

31,328

52,004

299,576

% High School Graduate

or Higher

91.9%

90.2%

86.6%

95.7%

94.5%

92.7%

Population >16 in Labor

Force

587,819

836,379

728,050

133,122

197,403

910,302

Number of Government

Workers (federal, state,

and local)

96,542

122,240

118,633

26,227

38,095

126,476

Unemployment Rate

(June 2019) 2/

5.9%

3.3%

4.1%

2.2%

2.0%

2.4%

Source: All figures from U.S. Census Bureau, 2019 American Community Survey 1-Year Estimates, unless otherwise noted.

1/ Total Population from: U.S. Census Bureau, Population Division; Annual Estimates of the Resident Population: April 1,

2010 to July 1, 2019. Release date May 2019.

2/ U.S. Bureau of Labor Statistics. “Unemployment in the Washington Area by County – June 2019.”

Retrieved from: https://www.bls.gov/regions/mid-atlantic/news-release/2019/unemployment_washingtondc_20190814.htm

2019 Tax Rates and Tax Burdens – Washington Metropolitan Area

Page 27

Part II

A Comparison of Tax Rates in

the Washington Metropolitan

Area as of January 1, 2020

(Unless otherwise noted)

Part II: A Comparison of Tax Rates in the Washington Metropolitan Area as of January 1, 2020

2019 Tax Rates and Tax Burdens – Washington Metropolitan Area

Page 28

ALCOHOLIC BEVERAGE TAX

District of Columbia

The tax is imposed on all alcoholic beverages manufactured by a holder of a

manufacturer’s license and on all alcoholic beverages brought into the District by the holder of a

wholesaler’s or retailer's license.

Maryland

The tax is imposed on all alcoholic beverages sold by manufacturers and wholesalers to

retail dealers and sold by out-of-state dealers to wholesalers. The tax also applies to seized

liquors.

Virginia

The tax is imposed on the sale of all alcoholic beverages in Virginia. Persons who have a

mixed beverage carrier license are subject to tax on mixed drinks sold.

Table 10: Metropolitan Area Tax Rates on Alcohol

ITEMS

DISTRICT OF

COLUMBIA 1/

MARYLAND 1/

VIRGINIA 2/

Beer (per barrel)

$2.79

$8.06

Spirits (per gallon)

1.50

20%

of retail price

Wine (per gallon)

14% or less alcohol

More than 14% alcohol

.30

.40

1.51 3/

Champagne and Sparkling

Wine (per gallon)

.45

.40

1.51 3/

Source: Survey of local government officials and local government web sites.

1/ An additional 10.25% and 10% sales tax applies in DC, off-and on-premises, respectively, and an additional 9% sales tax

applies in MD.

2/ Sales at ABC Stores in Northern Virginia are subject to the 6.0% sales tax rate in addition to the rate listed.

3/ Some localities may apply additional tax. In addition, state sales tax applies. This includes a $.40 per liter wine tax, and 6%

state sales tax (state sales tax plus local sales tax) applied at ABC stores in Northern Virginia and Hampton Roads. Wines with

under 4% alcohol: $0.2565/gallon.

Part II: A Comparison of Tax Rates in the Washington Metropolitan Area as of January 1, 2020

2019 Tax Rates and Tax Burdens – Washington Metropolitan Area

Page 29

CIGARETTE TAX

District of Columbia

The District's cigarette tax is imposed on the sale or possession of all cigarettes in the

District. Exemptions from the tax are as follows: (1) cigarette sales to or by the federal or District

governments; (2) possession of cigarettes by licensed wholesalers for sale outside the District or

to licensed wholesalers; (3) possession of cigarettes bearing stamps of other jurisdictions by

vending machine operators who are licensed in the other jurisdictions; (4) possession by a

consumer of up to 200 cigarettes which were transported into or manufactured in the District by

the consumer; and (5) possession of cigarettes being transported under conditions such that the

cigarettes are not deemed to be contraband.

Maryland

The Maryland tax is imposed on all cigarettes possessed or held in the state by any

person. Cigarettes for sale to Army, Air Force, Navy, or Coast Guard exchanges or commissaries

are exempt.

Virginia

The Virginia tax is imposed upon the sale, storage or receipt of cigarettes for purposes of

distribution within the state. In addition to the state tax, certain Virginia localities impose a

cigarette tax. An exemption from taxation is provided for the free distribution of sample

cigarettes in packages containing five or fewer cigarettes and for cigarettes customarily donated

by manufacturers to cigarette factory employees (where such cigarettes are not subject to federal

taxation).

Table 11: Metropolitan Area Tax Rates per 20 Cigarettes

JURISDICTION

STATE

LOCAL

COMBINED RATE

District of Columbia

$4.98 1/

----

$4.98

Maryland

$2.37 2/

----

$2.37

Virginia

$0.54 3/

----

Alexandria

$1.26

$1.80

Arlington County

$0.30

$0.84

Fairfax

$0.85

$1.39

Fairfax County

$0.30

$0.84

Falls Church

$0.85

$1.39

Prince William County

$0.00

$0.54

Source: Survey of local government officials and local government web sites.

1/ Includes a per pack surtax in lieu of a retail sales tax calculated every March 31. The current rate is 48 cents.

2/ Includes retail sales tax ($0.37 per pack).

3/ Tax increased to $0.60/per pack on July 1, 2020. Includes retail sales tax ($0.24 per pack).

Part II: A Comparison of Tax Rates in the Washington Metropolitan Area as of January 1, 2020

2019 Tax Rates and Tax Burdens – Washington Metropolitan Area

Page 30

FINANCIAL INSTITUTION TAXES

District of Columbia

Financial institutions are subject to the corporate franchise tax. The franchise tax has

been reduced from 9.2 percent on January 1, 2016 to 8.25 percent for tax year 2018 and

thereafter. The minimum tax payable is $250 if gross receipts are less than $1 million. If District

gross receipts are greater than $1 million, the minimum tax payable is $1,000. Financial

institutions in the District are not subject to single sales factor apportionment, rather they have a

special formula.

Maryland

In the past, Maryland imposed a franchise tax on the net earnings of financial institutions

in lieu of the Maryland Corporate Income Tax. Financial institutions formerly subject to the

financial institution franchise tax are now subject to the corporate income tax, with special

apportionment rules based on a three-factor formula of property, payroll, and receipts. Financial

institutions are not subject to personal property taxes except on property leased to others.

Virginia

The Commonwealth of Virginia imposes a tax on the net taxable capital of banks and

trust companies at the rate of $1 per $100 of net capital, with a prorated schedule for new banks.

Net capital is determined in two steps. First, capital, surplus, and undivided profits of the

institution are added. Next, the following are subtracted from this amount: the assessed value of

real estate; the book value of tangible personal property; the pro rata share of government

obligations; the capital accounts of any bank subsidiaries; the amount of any reserve for loan

losses allowed by the Internal Revenue Service for income tax purposes (which amount is

included in the definition of capital, surplus and undivided profits); and the amount of any

reserve for marketable securities valuation that is included in capital, surplus and undivided

profits to the extent that such reserve reflects the difference between the book value and the

market value of such marketable securities. On July 1, 2016, an $18 million cap was set on the

maximum total annual bank franchise tax liability per bank; the cap will increase to $20 million

if at least 5 banks pay the maximum tax for 3 consecutive calendar years, and it will increase by

3 percent annually after 2 years at $20 million.

Virginia has authorized its cities and counties to levy a tax not to exceed 80 percent of the

state rate. The counties of Arlington, Fairfax, Loudoun, and Prince William, and the cities of

Alexandria, Fairfax, and Falls Church levy the maximum of 80 cents per $100 of net capital.

The local tax is not in addition to the state tax, but rather creates a redistribution of 80 percent of

the state tax to the localities.

Part II: A Comparison of Tax Rates in the Washington Metropolitan Area as of January 1, 2020

2019 Tax Rates and Tax Burdens – Washington Metropolitan Area

Page 31

INCOME TAXES

CORPORATE FRANCHISE

District of Columbia

Foreign and domestic corporations and financial institutions engaging in a trade or

business within the District or receiving income from District sources are subject to tax. The

franchise tax has been reduced from 9.2 percent on January 1, 2016 to 8.25 percent for tax year

2018 and thereafter. The minimum tax payable is $250 if gross receipts are less than $1 million.

If District gross receipts are greater than $1 million, the minimum tax payable is $1,000.

Businesses that do not operate entirely within the District and/or receive income from

sources not entirely within the District must allocate or apportion their income in accordance

with general allocation or apportionment rules and regulations. Apportionment of business

income is based on a single sales factor effective January 1, 2015. Special formulas may be

applied to businesses where this formula does not fairly represent the corporation's business

within the District and financial institutions. Companies with multiple entities must file a

combined or unitary report and cannot file as a separate entity.

Federal conformity is maintained pursuant to Public Law 105-100.

Maryland

In Maryland a tax is imposed upon the net income of corporations and financial

institutions at the rate of 8.25 percent.

The net income of a corporation is allocated as detailed in state rules and regulations. A

single-sales factor apportionment formula is being phased in beginning in 2018. (In 2017, the

three-factor formula was based on property, payroll, and double-weighted sales. In 2018, a three-

factor formula was based on property, payroll, and triple-weighted sales.) In 2019 the sales factor

was quadruple-weighted; in 2020 the sales factor was quintuple-weighted; in 2021 the sales

factor will be sextuple-weighted; and in 2022 and thereafter a single-sales factor will apply.

Virginia

A tax of 6 percent is imposed on the Virginia taxable income of corporations.

Professional corporations are also subject to the tax. Corporations having income from business

activity taxable both within and outside of Virginia must allocate and apportion their Virginia

taxable income as detailed by state rules and regulations. Multi-state corporate income is

generally apportioned to Virginia by a three-factor formula based on property, payroll, and

double-weighted sales.

Part II: A Comparison of Tax Rates in the Washington Metropolitan Area as of January 1, 2020

2019 Tax Rates and Tax Burdens – Washington Metropolitan Area

Page 32

INCOME TAXES

INDIVIDUAL INCOME

District of Columbia

Individuals who maintain a permanent home in the District at any time during the taxable

year, or who maintain a place of residence for an accumulative total of 183 days or more, are

subject to the individual income tax (see rates in Table 1). Nonresidents who are employed in the

District are not liable for the tax.

Because the District of Columbia selectively conforms to federal provisions, whenever

federal law changes with respect to federal individual income taxation, in many cases District tax

structure mirrors the federal changes automatically. As a result of the 2017 Tax Cuts and Jobs

Act and DC’s federal conformity provisions, DC’s personal exemptions reduced to zero and the

federal standard deduction was increased significantly (in 2019: married filing jointly - $24,400;

head of household - $18,000, single - $12,200; for 2020 see table 1 on page 7). There is an

additional standard deduction $1,300 for age 65+ or blind taxpayers (and/or spouse/registered

domestic partner).

A credit to relieve property tax burdens is provided under the DC income tax law. This

credit, called Schedule H, authorizes qualified homeowners and renters to claim a credit against

their income tax liability, or a refund if no tax is due, for a portion of property taxes or rent paid

when these payments exceed a certain percentage of household income. Renters use 20 percent

of rent paid (property tax equivalent of rent) as the assumed percentage for the District. To

qualify for the credit or refund, the homeowner or renter must have lived in the District the entire

taxable year, and the household income cannot exceed $51,000 ($62,600 if taxpayer is over 70).

For 2019, the income limit increased to $55,000, and the maximum credit was $1,200.

Other personal income tax credits are those for: individual income taxes required to be

paid to another state on income derived from sources outside the District and child and

dependent care (32 percent of federal credit for full-year residents, or qualified expenses divided

by number of months on returns filed for less than calendar year or fiscal year). In addition, the

District has an earned income tax credit. This credit is currently 40 percent of the federal credit

and like the federal credit is refundable, meaning any amount more than tax liability is refunded

to the tax filer.

The District exempts all income of U.S. Senators, Representatives, Presidential

Appointees, and Supreme Court Justices, provided such officials primary residence is not in the

District. Also exempted is the income of personal staff and employees of members of Congress

who remain bona fide residents of the congressperson's home state. Presidential appointees, to be

exempt, must be subject to approval by the Senate and serve at the pleasure of the President.

However, appointees are not exempt if they live in the District on the last day of the taxable year,

even though they meet the other conditions. Congressional staff members are not exempt if their

salaries are paid from committee funds.

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Maryland

Persons who are Maryland residents on the last day of the tax year, or who have lived in

the state for at least six months, are subject to the individual income tax. In addition,

nonresidents are taxed on income earned in Maryland. Maryland's income tax law about income

and deductions conforms closely to that of the federal government. Individuals carrying on

business in a partnership are responsible for the tax only on their individual shares, that is, no tax

is assessed on the partnership entity.

In addition to the state individual income tax, Charles, Montgomery, Prince George's, and

other Maryland counties impose a local income tax. Until tax year 1998, this local tax

(piggyback) was a share of the state tax. However, effective for tax year 1999, counties levy a

tax using an income tax rate and state taxable income. The local rate generally ranges between

3.2 percent in Montgomery and Prince George’s Counties to 3.03 percent in Charles County.

In addition, Montgomery County passed legislation making it the first local jurisdiction

in the country with a local refundable earned income credit. This credit went into effect for tax

year 1998.

Virginia

Virginia residents are subject to the individual income tax. In addition, nonresidents are

taxed on income earned in Virginia, but a credit is allowed for taxes paid to their home states.

Members of the armed forces are not subject to the tax on their active-duty military income when

stationed in Virginia, if they had no place of domicile in the state. A spouse of a service member

shall neither lose nor acquire a residence or domicile for purposes of taxation with respect to the

person, personal property, or income of the spouse by reason of being absent or present in any

tax jurisdiction of the United States solely to be with the service member in compliance with the

service member’s military orders if the residence or domicile is the same for the service member

and the spouse.

Virginia's income tax law conforms very closely to that of the federal government. The

tax is based on an individual's federal adjusted gross income with modifications, if applicable,

personal exemptions and standard or itemized deductions. In Virginia, as in the District of

Columbia, if taxpayers use itemized deductions on their federal return, they must itemize on their

state return. If they use the standard deduction for federal purposes, then they must use it for

state purposes.

Virginia generally allows the same itemized deductions as the federal government.

However, no deduction is allowed for income taxes imposed by the state or any other taxing

jurisdiction in determining the amount of the taxpayer's income subject to tax. Instead of

allowing a credit for child and dependent care expenses (necessary for gainful employment),

Virginia provides for a deduction equal to the amount allowed under federal law in computing

the child and dependent care credit.

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Table 1 on page 7 compares tax rates, personal exemption amounts, and deduction

amounts for the District, Maryland, and Virginia as of January 1, 2020.

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INCOME TAXES

UNINCORPORATED BUSINESS FRANCHISE

District of Columbia

The District's franchise tax on unincorporated businesses is imposed on enterprises with

gross income over $12,000. The franchise tax has been reduced from 9.2 percent on January 1,

2016 to 8.25 percent for tax year 2018 and thereafter. The minimum tax payable is $250 if gross

receipts are less than $1 million. If District gross receipts are greater than $1 million, the

minimum tax payable is $1,000. The tax is payable by the person or persons jointly or severally

conducting the unincorporated business.

Unincorporated businesses pay the franchise tax on 70 percent of net profits, less a

$5,000 exemption. Owners who participate in the operation of the business are allowed 30

percent of the net profit as a salary deduction. When 80 percent or more of income is derived

from services, the unincorporated business income is taxed under the individual income tax.

Maryland

Unincorporated business income is taxed under the individual income tax.

Virginia

Unincorporated business income is taxed under the individual income tax.

Several Virginia jurisdictions also levy a license tax on the gross receipts derived from

various businesses. Table 12 on the following page details the business license tax rates per $100

of gross receipts imposed by metropolitan area jurisdictions on several occupations.

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Table 12: Unincorporated Business Franchise and Business

License Taxes

OCCUPATION 1/

DISTRICT

COLUMBIA

ALEXANDRIA

ARLINGTON

COUNTY 3/

FAIRFAX

COUNTY

FALLS

CHURCH

LOUDOUN

COUNTY 6/

PRINCE

WILLIAM

COUNTY 7/

AMUSEMENTS/

RECREATIONAL SERVICES

$.36/$100

$.25/$100

$.27/$100

$.26/$100

$.36/$100

$30 or

$.21/$100

BUSINESS SERVICES

$.35/$100

$.27/$100

$.19/$100

$.36/$100

$30 or

$.17/$100

$.21/$100

PERSONAL SERVICES

$.35/$100

$.27/$100

$.19/$100

$.36/$100

$30 or

$.23/$100

$.21/$100

PROFESSIONALS

---

$.58/$100

$.36/$100

$.40/$100

$.31/$100

$.52/$100

$30 or

$.33/$100

REPAIR SERVICES

$.35/$100

$.27/$100

$.19/$100

$.36/$100

$30 or

$.16/$100

$.21/$100

RETAIL SERVICES

$.20/$100

$.17/$100

$.19/$100

$30 or

$.17/$100

WHOLESALE MERCHANTS

$.05/$100

on gross

purchases

$.08/$100

$.05/$100

on gross

purchases

$.04/$100

on gross

purchases

$.08/$100

$30 or

$.05/$100

on gross

purchases

$.05/$100

on gross

purchases

FILLING STATIONS

$.20/$100

$.10/$100

$.20/$100

$.17/$100

$.19/$100

$30 or

$.17/$100

CONTRACTORS

$.16/$100

$.11/$100

$.16/$100

$30 or

$.13/$100

VENDING MACHINE SALES

$.20/$100

$.17/$100

$.19/$100

$30 or

$.17/$100

FEDERAL CONTRACTORS

---

$.03/$100

$30 or

$.03/$100

---

FINANCIAL AND REAL

ESTATE SERVICES

$.58/$100

10/

$.36/$100

$.40/$100

$.31/$100

$.50/$100

$30 or

$.33/$100

RENTAL BY OWNER –

RESIDENTIAL

$.50/$100

$.28/$100

$.50/$100

---

$.38/$100

---

RENTAL BY OWNER –

COMMERCIAL

$.35/$100

$.43/$100

$.23/$100

$.26/$100

$.52/$100

$30 or

$.16/$100

---

Source: Survey of local government officials and local government web sites.

1/ Categories shown are not a comprehensive listing.

2/ Less than $10,000 gross receipts-no tax; greater than $10,000, but less than $100,000-$50.00 minimum.

3/ Rates apply to businesses having gross receipts exceeding $100,000. Businesses having gross receipts less than $10,000 owe no tax; businesses grossing between

$10,000-$50,000 pay $30.00; between $50,001and $100,000 pay $50.00.

4/ If gross receipts are less than $10,000, there is no fee or license requirement; businesses with gross receipts from $10,001 to $50,000, a flat fee of $30 is assessed;

businesses with gross receipts from $50,001 to $100,000, a flat fee of $50 is assessed; and businesses with gross receipts of $100,001 or greater, the tax rate is

determined by the business classification.

5/ Less than $10,000 gross receipts-no tax; $10,000-$50,000 pays $30.00.

6/ $30 fee when gross receipts are under $200,000. The rate applies to total of gross receipts.

7/ Rates apply to business gross receipts of $250,000 or more for the license year. No license tax shall be imposed when gross receipts are less than $250,000. Rates

are for FY17.

8/ As of January 1, 2018 a rate of 8.25% is imposed on the taxable income of businesses, if not incorporated, with gross receipts over $12,000. A 30% salary allowance

for owners and a $5,000 exemption are deductible from net income to arrive at taxable income.

9/ No separate category for federal contractors, they are taxed according to service provided.

10/ Financial only.

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INHERITANCE AND ESTATE TAXES

INHERITANCE TAX

District of Columbia

The District of Columbia's inheritance tax was abolished for any deaths after April 1,

1987.

Maryland

Effective for decedents who died on or after July 1, 2000, Maryland does not tax property

passing to a child or other lineal descendant, spouse of a child or other lineal descendant, spouse,

parent, grandparent, stepchild or stepparent, siblings or a corporation having only certain of these

persons as stockholders. The rate of 10 percent applies to property passing to all others.

Virginia

Virginia does not levy an inheritance tax. However, Virginia does levy a tax on the

probate of wills and grants of administration equal to 10 cents per $100 of the value of the estate

more than $15,000. Localities may impose a local probate tax equal to 1/3 of the state probate

tax.

ESTATE TAX

District of Columbia

The estate tax is imposed on the estate of every decedent who died while still a resident

of the District, and on the estate of every nonresident decedent owning property having a taxable

situs in the District at the time of his or her death.

In response to the Federal Economic Growth and Tax Relief Reconciliation Act

(EGTRRA) of 2001, the District decoupled from federal estate tax. By decoupling, the District

chose to create its own estate tax threshold. Hence, some District estate taxpayers may be

required to file and pay District estate taxes even when no federal filing or tax is due. The

District’s estate tax rates are derived from the federal estate tax credit that was available prior to

the enactment of EGTRRA. The highest rate of 16.0 percent applies to estates valued at more

than $10,000,000 (after allowable federal credits are taken).

The FY 2015 Budget Support Act instituted a revenue trigger for implementation of tax

policy changes recommended by the District’s Tax Revision Commission beyond FY 2015, one

of which raised the estate tax threshold from $1 million to $2 million. The FY 2015 Budget

Support Act additionally set a path for the District to recouple with federal estate tax rules. These

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Page 38

changes were stipulated upon meeting some revenue triggers that would go into effect before the

increase in the estate tax threshold. This increase in the estate tax threshold from $1 million to $2

million became effective at the beginning of FY 2017.

Effective January 1, 2018, the Estate tax statute was amended to conform with the federal

rules. That is, the estate tax exclusion will be equal to the basic exclusion amount prescribed in

section 2010(c)(3)(A) of the Internal Revenue Code and any cost-of-living adjustments made

pursuant to section 2010(c)(3)(B) of the Internal Revenue Code. The Estate Tax Clarification

Amendment Act of 2018 included in the FY 2019 Budget Support Act of 2018 decoupled the

District of Columbia’s estate tax exclusion threshold from the federal level that was set by Public

Law 115-97, the Tax Cuts and Jobs Act of 2017 at $11.18 million and establishes the District’s

threshold to $5.6 million in 2018. The estate tax threshold will be increased annually, subject to

inflation. Estates of decedents who died January 1, 2020 - December 31, 2020 have an exclusion

amount of $5,762,400

Maryland and Virginia

The Maryland estate tax is based on the maximum credit for state estate taxes allowable

under § 2011 of the Internal Revenue Code as it existed before EGTRRA.

The credit used to

determine the Maryland estate tax cannot exceed 16 percent of the amount by which the

decedent’s taxable estate exceeds the Maryland estate tax exemption amount for the year of the

decedent’s death ($5 million).

Legislation enacted by the 2006 General Assembly, House Bill 5018, repeals the Virginia

estate tax for the estates of decedents whose date of death occurs on or after July 1, 2007. The

estates of decedents whose date of death occurs before July 1, 2007 remain subject to the estate

tax provisions.

MD Tax-Gen Code § 7-309 (2018)

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INSURANCE PREMIUMS TAX

District of Columbia

All domestic and foreign insurance companies, except those specified below, pay tax on

the premiums received in lieu of all other taxes, except taxes upon real property. The basis of this

tax is gross premiums received less the following items: dividends paid to policyholders;

premiums received for reinsurance assumed; and returned premiums.

Nonprofit relief associations composed solely of members of the armed services or

employees of the United States, District of Columbia, or of any individual company, as well as

fraternal organizations that issue contracts of insurance exclusively to their own members, are

exempt from the tax.

Maryland

All insurance companies except nonprofit hospital service plan corporations, fraternal

beneficiary associations, and domestic mutual fire insurance companies pay an annual tax on

gross direct premiums. The tax is based on all new and renewal gross premiums allocable to

Maryland. Deductions are allowed for returned premiums, dividends paid to policyholders, and

refunds made to policyholders.

Virginia

A tax is imposed on all insurance companies transacting insurance business in Virginia,

except local mutual fire insurance and fraternal beneficiary companies. The tax replaces all other

taxes, except the tax on real estate and tangible personal property. No tax is imposed on

premiums received by an insurer to provide group insurance for its employees. The basis of the

tax is gross premiums from business in Virginia, except premiums received for reinsurance

assumed from licensed insurance companies. The basis is reduced for premiums returned upon

canceled or reduced policies; however, deduction for dividends paid or deduction for any other

account is not allowed.

Table 13 on the following page presents various insurance premiums tax rates for DC,

Maryland, and Virginia.

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Table 13: Insurance Premiums Tax Rates

TAX

DISTRICT

COLUMBIA

MARYLAND

VIRGINIA

Life Insurance

Companies

1.70%

2.00%

2.25%

Life Insurance

Special Benefits

1.70%

2.00%

2.25%

Domestic Mutual

Companies

1.70%

2.00%

1.00%

Industrial Sick

Benefit Companies

1.70%

2.00%

1.00%

Workman’s

Compensation

1.70%

2.00%

2.50%

Legal Service

Insurance Companies

---

2.25%

Other

2.00%

2.25%

Source: Survey of local government officials and local government web sites.

1/ The rate is 2% on accident and health insurance policies, on surplus line brokers, and on health insurance premiums and HMO’s.

2/ The rate is 3% on unauthorized insurers and surplus line brokers.

3/ Includes surplus line brokers.

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MOTOR VEHICLE TAXES

MOTOR VEHICLE EXCISE

All three jurisdictions impose fees on cars, trucks, buses, and trailers based on weight.

District of Columbia

The District imposes a titling tax based on the manufacturer’s shipping weight at the time

the title is issued at the following rates: up to 3,499 pounds - 6 percent of fair market value;

3,500 pounds to 4,999 pounds – 7 percent of fair market value; and 5,000 pounds and over – 8

percent. Since October 1, 1998, vehicles previously titled by individuals moving into the District

are no longer subject to the motor vehicle excise tax.

Maryland

Maryland imposes an excise tax of 6 percent of fair market value on each motor vehicle

at the time the title is issued.

Virginia

Virginia taxes motor vehicles at the time of sale at 4.15 percent.

MOTOR VEHICLE REGISTRATION

Annual registration fees for the District of Columbia, Maryland, and Virginia are

presented on the following page in Table 14.

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Table 14: Annual Registration Fees for Passenger Cars

JURISDICTION

WEIGHT

FEES

DISTRICT OF COLUMBIA 1/2/

Vehicles

0 to 3,499 pounds

3,500 to 4,999 pounds

5,000 pounds or more

Motorcycles

Clean fuel or electric vehicle

$ 72.00

$115.00

$155.00

$ 52.00

$ 36.00

MARYLAND

Vehicles

3,700 pounds or less

Over 3,700 pounds

$ 67.50

$ 93.50

VIRGINIA (State)

Vehicles

4,000 pounds or less

Over 4,000 pounds

Electric car

Motorcycles

$ 30.75

$ 35.75

$ 88.20

$ 24.75

Alexandria 5/

Vehicles 3/

Motorcycles

NA 6/

Arlington County

Vehicles 3/

Motorcycles

+$ 33.00

+$ 18.00

Fairfax

Vehicles 3/

Motorcycles

+$ 33.00

+$ 18.00

Fairfax County 4/

Vehicles

4,000 pounds or less

Over 4,000 pounds

Motorcycles

+$ 33.00

+$ 38.00

+$ 18.00

Falls Church 5/

Vehicles

Motorcycles

+$ 33.00

+$ 28.00

Loudoun County 5/

Vehicles 3/

Motorcycles

+$ 25.00

+$ 16.00

Prince William County 5/

Vehicles 3/

Motorcycles

+$ 33.00

+$ 20.00

+ In addition to state rate.

Source: Survey of local government officials and local government web sites.

1/ The fee for motorized bicycles is $25.00.

2/ An additional fee of $35.00 is charged for vehicle inspection every two years.

3/ Flat rate applied regardless of weight.

4/ Businesses and citizens residing in the towns of Vienna, Herndon, and Clifton pay vehicle registration fees set by those jurisdictions in lieu of the Fairfax County

fee.

5/ Taxpayers who satisfy certain household gross income and net worth limitations (these requirements are the same as those applicable to the county's real property

tax relief program) may exempt one vehicle from the annual registration fee.

6/ Decal (registration) fee repealed for Tax Year 2019 and personal property tax increased to $5.33 per $100 of assessed value.

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MOTOR VEHICLE FUEL TAX

District of Columbia

This tax is imposed on every importer or user of motor vehicle fuels, including gasoline,

diesel fuel, benzol, benzene, naphtha, kerosene, heating oils, all liquefied petroleum gases, and

all combustible gases and liquids suitable for the generation of power for motor vehicles. Fuel

exported from the District is exempt.

Effective October 1, 2013, the District levies the motor fuel vehicle tax at the wholesale

level, equal to 8 percent of the average wholesale price of a gallon of regular unleaded gasoline.

The average wholesale price is calculated, based on the average wholesale rate for regular

gasoline in the Central Atlantic Region (PADD 1B), for adjustment twice a year. As a result, the

tax rate may change each year. The average wholesale price will be determined by the District

and published by February 1 and August 1 of each year. The floor on the wholesale price for the

calculation of the tax is $2.94, or 23.5 cents per gallon. This is the average wholesale price that

was in effect as of October 2019. As of Oct. 1, 2020, there is a surcharge of $0.053 per gallon,

which will increase to $0.103 per gallon Oct. 1, 2022, and increase annually thereafter with a

cost of living adjustment.

Maryland

Every dealer pays a tax on all motor vehicle fuels sold or used in Maryland. Motor

carriers with commercial vehicles having seats for more than nine passengers or having more

than two axles are subject to a tax on the amount of motor fuel used in their operations in

Maryland. Credit is allowed for taxes paid on all motor fuel purchased in Maryland.

Virginia

A motor fuel tax is imposed on all dealers and other persons selling motor fuel in the

Commonwealth. A 2.1 percent sales tax is imposed on retail sales of fuels sold within a city or

county that is a member of any transportation district in which a commuter mass transportation

system is operated.

RATE PER GALLON

DISTRICT

MARYLAND

VIRGINIA

23.5 cents

36.79 cents

30.12 cents

1/ This represents a combined rate of the motor fuel tax and the sales and use tax equivalent (SUTE).

2/ As of December 2019, the rate was 16.2 cents per gallon plus a $0.006/gal storage tank fee and $0.076 Motor Vehicle Excise tax. An

additional 2.1 percent local tax is applied in the Northern Virginia jurisdictions of Alexandria, Arlington County, Fairfax, Fairfax County, Falls

Church, Manassas, Loudoun County, Prince William County, and Stafford County. This is charged by fuel distributors to retail dealers in the

Northern Virginia Transportation District for commuter mass transit systems. This local rate is included in the tax burdens calculated in this

study.

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PROPERTY TAXES

REAL PROPERTY

District of Columbia

All real and personal property is subject to taxation unless expressly exempt by statute.

The District of Columbia real property tax is based on four classifications:

(a) Class One Property - improved residential real property that contains five or

fewer dwelling units (whether as a row, detached, or semi-detached structure), or

a single dwelling unit owned as a condominium and used exclusively for

non-transient residential dwelling purposes. Improved residential real property

owned by a cooperative housing association also shall be classified as Class One

Property, provided that at least 50 percent of the dwelling units are occupied by

the shareholders or members of the cooperative housing association. The Class

One property tax rate is $0.85 per $100 of taxable assessed value.

Unimproved (vacant) property that abuts and has identical ownership with a Class

One Property also shall be considered Class One Property. A $74,550 homestead

deduction was applied to property that was owner-occupied for 2019. The

homestead deduction increased to $75,700 for 2020.

(b) Class Two Property - improved commercial property. Hotels, motels, and inns are

included in this class. For properties assessed below $5 million the rate is $1.65 per

$100 of assessed value; for properties with assessed values between $5 million and $10

million the rate is $1.77 per $100 on properties; and for properties with assessed values

above $10 million the rate is $1.89.

(d) Class Four Property – improved blighted property.

All property in the District is annually assessed at a statutory level of 100 percent of its

estimated market value.

To limit the increase of real property taxes for homeowners, eligible homeowners are

provided an Assessment Cap Credit. The Assessment Cap Credit provides that a real property

tax bill will not increase by more than 10 percent above the prior year’s real property tax bill.

The credit only applies to the principal residence of the property owner (homestead property) and

is based on the total assessment for the dwelling and land associated with the dwelling. Senior

citizens (age 65 and older) now receive additional real property tax relief with the senior

homestead 5 percent cap on real property tax increase that was effective October 1, 2018, as well

as a property tax credit that reduces a qualified property owner's property tax.

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Maryland

The state property tax rate of 11.2 cents per $100 of assessed market value applies to real

property only. It is imposed annually on all taxable land and improvements. The tax is applied to

an assessed value. (Also, see table 15 below for Maryland county rates applicable in this study.)

The Maryland Department of Assessments and Taxation makes assessments. Real

property for state and county tax purposes is assessed according to a three-year assessment

schedule. A physical review of each property is made every three years. Reassessments are

updated based on an analysis of sales, cost, and rental data in the area. The amount of the

increase in the established market value of one-third of the properties reassessed each year is

phased in over a three-year period. A decline in assessed value, however, becomes effective in

the first year. Real property is assessed at 100 percent of its value.

Residential property owners are entitled to an assessment limitation tax credit. For state

tax purposes, this is a credit against property taxes equal to the tax rate, times that part of the

2019 total assessment greater than 110 percent of the 2018 assessment. County and municipal

governments may choose a percentage amount lower than 110 percent of assessment.

Virginia

The Commonwealth of Virginia does not levy a real property tax. However, local

jurisdictions are required to tax real property at 100 percent of estimated market value.

Tax rates for the jurisdictions of the Washington Metropolitan Area are presented in

Table 15.

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Table 15: Real Property Tax Rates

As of December 31, 2019, 1/ 2/

JURISDICTION

NOMINAL RATE

(PER $100 OF TAXABLE

ASSESSED VALUE)

STATUTORY

ASSESSMENT LEVEL

(% OF MARKET

VALUE)

EFFECTIVE

ASSESSMENT

LEVEL

(INCL. MEDIAN

ASSESSMENT

SALES RATIO) 13/

EFFECTIVE

RATE

(PER $100 OF

TAXABLE

ASSESSED

VALUE)

DISTRICT OF COLUMBIA

Class I (residential) $ 0.85

Class II (commercial) $ 1.89 4/

Class III (vacant) $ 5.00

Class IV (blighted) $10.00

100%

97.50%

$0.8288

MARYLAND 5/

Charles County

$1.317 6/

($0.04 - 0.320)

100%

92.90%

$1.2235

Montgomery County

$1.091

($0.01 - $0.622) 7/

100%

95.70%

$1.0437

Prince George’s County

$1.465

($0.895-$1.069) 8/

100%

95.30%

$1.3961

VIRGINIA

Alexandria

$1.130

100%

95.84%

$1.0830

Arlington County

$1.026

100%

93.56%

$0.9599

Fairfax City

$1.075

100%

96.19%

$1.0233

Fairfax County

$1.180

9/ 10/

100%

91.87%

$1.0841

Falls Church

$1.355

100%

93.75%

$1.2703

Loudoun County

$1.045

10/ 11/

100%

91.49%

$0.9561

Prince William County

$1.208

12/

100%

90.28%

$1.0906

Source: Survey of local government officials and local government web sites.

1/ In the District of Columbia the 2019-2020 real property tax year is October 1, 2019 - September 30, 2020. For the Maryland area

jurisdictions, the 2019-2020 real property tax year is July 1, 2010 to June 30, 2020. The rates presented are those in effect as of December 31,

2019, which is FY 2020 for each jurisdiction.

2/ Rates are per $100 of value. Special area rates in effect are shown in parentheses.

3/ Effective tax rates listed here are net of assessment value and do not reflect any exemptions or credits, nor does they incorporate median sales

ratios, as in Table 3 for the property tax calculations in the report.

4/ 1

$5(M) rate is $1.65 per $100 of assessed value; a rate of $1.77 per $100 assessed value applies to value over $5 million up to $10,000,000;

and a rate of $1.89 per $100 of assessed value applies over $10 million in value.

5/ Rates shown include the Maryland state rate of $0.112 per $100 of assessed value.

6/ Rate includes fire and rescue tax of $0.064/ per $100 of assessed value.

7/ Rate includes weighted average of municipal taxes, fire and transit district taxes, and Maryland - National Capital Park and Planning

Commission (MNCPPC) taxes.

8/ Includes MNCPPC taxes, transit taxes, and stormwater taxes.

9/ Relatively few residential properties in three areas pay an additional $0.02, 0.023, and 0.047 cents per $100 of assessed value for community

centers. Those in tax districts with a special assessment for leaf collection pay an additional $0.012 cents per $100 of assessed value.

10/ Loudoun County and Fairfax County have a Route 28 taxing district. Residents of this district are subject to an additional $0.18 cents per

$100 of assessed value.

11/ Loudoun County has a Dulles Rail service district. Residents of this district are subject to an additional $0.20 per $100 of assessed value.

12/ Rates ranging from $0.02 to $.201 are applied in special tax districts for recreation, and roads improvements. Includes $0.0025 per assessed

value of $100 is applied for Mosquito and Forest Pest Management and $0.08 Fire and Rescue levies (except in the Town of Quantico).

13/ See page 9 for an explanation of the addition of the median sales ratio statistic for this year.

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PROPERTY TAXES

PROPERTY TAX RELIEF PROGRAMS

District of Columbia

Class One (owner-occupied residential) property owners may obtain a homestead

deduction. DC Law 4-129, effective July 24, 1982, requires the filing of the homestead deduction

application once every five years. This deduction eliminates property taxes on the first $74,850

of assessed value for homeowners in 2019 ($75,700 in 2020, equivalent to a $643.45 credit) and

has been indexed annually (by the CPI) since October 1, 2012. In addition to the homestead

deduction, senior citizens age 65 or older with total household adjusted gross income below

$133,100 (for 2019) may have their real property tax payments reduced by half.

Owner-occupied residential properties are also subject to a 10 percent property tax cap

whereby a property may not be taxed on more than a 10 percent increase in the property’s

assessed value each year. Effective beginning in 2019, there will be a 5 percent cap annually on

taxable assessed value on real properties owned and occupied by senior citizens and person with

disabilities.

The District provides several property tax relief programs for qualified homeowners and

renters who live in the District during the entire taxable year. A Schedule H property tax credit

can be claimed against their individual income tax liability (with a refund if the credit exceeds

any tax due) for a portion of the property taxes paid or rent paid constituting property taxes that

exceeds a stated percentage of household income. The specific percentages are presented in

Table 16, below. For the taxable year beginning January 1, 2019, the income eligibility limit is

$75,000 for eligible senior claimants and $55,000 for all other claimants, increased annually

pursuant to the cost-of-living adjustment, and the maximum credit is 1,200.

Eligible homeowners who meet the income level requirement and whose property is less

than $479,066 (as of 2019) in value may be eligible for abatement of real property taxes for a 5-

year period beginning October 1 following the recordation of the homeowner's deed as well as

abatement of deed recordation and transfer taxes. Application must be made at the time the deed

conveying the real property involved is offered for recordation with the Recorder of Deeds.

The District also has a special tax relief program for qualified historic properties

approved by the Joint Committee on Landmarks of the National Capital. Owners of the property

must be willing to enter into an agreement with the DC government to preserve the building as

historic property for at least 20 years.

Maryland

The Maryland homeowner's property tax credit program (circuit breaker) is designed to

provide relief for property tax burdens more than a certain percentage of income. The maximum

assessment that can be used to calculate the credit is $300,000. Applications must be filed by

September 1 of each year.

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The state of Maryland also makes available a refundable renter's tax credit of up to $1,000

a year for renters who are age 60 or over, or who are permanently and totally disabled and will

qualify based on income. Renters under 60 years of age, with at least one dependent under the

age of 18, who receive no federal or state housing subsidies or reside in public housing, and meet

certain income limits, may be eligible. The applicant's entitlement to the credit is tied to a

flexible scale that relates the annual rent paid to the applicant's annual gross income. In

comparing the applicant's gross income to his or her annual rent paid, an allowance is made for

utilities paid by the renter. For example, if the renter pays for gas only, it is assumed that 6

percent of his or her gross income is dedicated to that item. By way of contrast, if the renter must

pay for heat, gas, and electricity, it is assumed that 18 percent of income is devoted to these

items. (Note: the income limits preclude the hypothetical family earning $25,000 in this report

from receiving a renter’s credit).

The Renter's Tax Credit Program is independent of the state individual income tax.

Applications must be filed by September 1 of each year. The applicant must, however, submit a

copy of his or her most recent Federal Tax Form 1040 and all the accompanying forms with the

renter's tax credit application.

Virginia

In Arlington County each owner of property for which exemption or deferral or both are

claimed must be age 65 or older during the current taxable year and occupy such property as

their sole dwelling or be permanently and totally disabled. A dwelling jointly held by a husband

and wife shall qualify if either spouse is or becomes 65 years old or is or becomes permanently

and totally disabled during the current taxable year.

Income cannot be more than $86,029 and the value of assets may not exceed $413,714 for

an exemption (or $558,513 for a deferral) (2021 levels). Total financial worth shall include the

value of all assets, including equitable interest, of the owner(s) and the owner’s relatives living in

the dwelling for which the exemption or deferral or both are claimed, and shall exclude the fair

market value of the dwelling and the land upon which it is situated, not exceeding one acre, for

which the exemption is claimed.

Fairfax and Prince William Counties, and Falls Church provide an exemption from, or

deferral of, real property taxes on dwellings owned and occupied by persons who are age 65 or

older, or who are permanently and totally disabled and whose income is not more than $72,000

(Fairfax County), $89,900 (Prince William County), and $100,800 (Falls Church). In Falls

Church, those with incomes from $63,701 - $100,800 are eligible for a deferral only. Income of

$7,500 may be excluded by a permanently and totally disabled applicant. Household gross

income includes the income of all relatives residing therein. From this amount, the homeowner

excludes the first $6,500 of income for each relative residing in the household other than the

spouse of the owner. In Falls Church and Prince William County, the homeowner may deduct

$10,000 for non-spouse income (caregiver income). The combined financial net worth of the

owner and spouse cannot exceed $340,000 up to one acre of land in Fairfax County and

$340,000 in Prince William County, up to 25 acres of land, excluding the value of the home. The

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asset limit is $400,000 in Falls Church (There was a change in 2019 to lower the asset limit from

$540,000 to $400,000, but current recipients with assets over $400,000 but below $540,001 who

would otherwise qualify for relief can continue in the program for 2 years).

Loudoun County provides a tax relief program that exempts real property taxes on the

dwelling and up to three acres of land on which the dwelling is situated. The dwelling must be

owned and occupied as the full-time residence of the applicant(s) seeking tax relief. Applicants

must be 65 years or older or certified permanently and totally disabled by January 1

of the

current tax year. Loudoun County’s gross household income limitation is $72,000 to receive a

full exemption. The first $7,500 of disability income may be excluded by applicants who are

permanently and totally disabled. Not including the spouse of the applicant, the first $10,000 of

income of each relative residing in the dwelling may be excluded when computing gross

household income. Loudoun County’s net worth limitation is $440,000, which does not include

the value of the dwelling, and up to ten acres of land on which the dwelling is situated. The value

of land more than three acres is not eligible for tax relief.

The City of Alexandria has two programs for real estate tax relief: First, tax relief for the

elderly and permanently and totally disabled. This program allows for both exemption from and

deferral of real estate taxes. To qualify for relief, the total combined household income of the

applicant cannot exceed $100,000 for the calendar year immediately preceding the year in which

the application is made. Total household assets may not exceed $430,000. For household

incomes up to $40,000, taxes are exempted in full. For household incomes between $40,001 and

$55,000, up to 50 percent of the applicant’s real estate tax bill is exempted. For household

incomes between $55,001 and $72,000, up to 25 percent of the applicant’s real estate bill is

exempt. Up to $10,000 in income of any relative (not a spouse) living in the property is

excluded, as well as up to $10,000 in income of any owner residing in the property who is

permanently disabled is also excluded. To qualify for deferral, the total household income of

Alexandria city applicants cannot exceed $72,000 for the calendar year immediately preceding

the year in which the application is made. The date of deferral of taxes is the date the taxes

would ordinarily be due.

The second program provides a full real estate tax exemption for veterans with 100

percent service-connected disability: The veteran must be rated at 100 percent or service-

connection is rated at less than 100 percent, but the veteran is paid at the 100 percent disability

rate due to un-employability under either standard. The disability must be considered total and

permanent. Veterans with temporary disability, no matter how severe, do not qualify.

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Table 16: Property Tax Relief Programs

FILING UNIT

GROSS INCOME

TAX CREDIT EQUALS:

DISTRICT OF COLUMBIA 1/

Regular Property Tax Circuit Breaker (Schedule H renters’ credit)

$ 0 - 24,999

100% of property tax equivalent exceeding 3.0% of household income – up to $1,200

$ 25,000 – 51,999

100% of property tax equivalent exceeding 4.0% of household income – up to $1,200

$ 52,000 – 55,000

100% of property tax equivalent exceeding 5.0% of household income – up to $1,200

Senior (Age 70 and Over) Circuit-Breaker Relief (Schedule H renters’ credit)

$ 0 – 75,000

100% of property tax exceeding 3.0% of household income – up to $1,200

Senior Citizen or Disabled Owner Property Tax Relief

$ 134,550

Reduces qualified owners’ property tax by 50%

JURISDICTION

HOUSEHOLD

GROSS INCOME

LESS THAN:

NET WORTH

LESS THAN:

RELIEF

AMOUNT:

TAX LIMIT:

Rates

MARYLAND 2/

$60,000

$200,000

Determined by

state

$4,380

1/ Renters use 20 percent of rent paid as a property tax equivalent of rent. Income and credit limits are for Tax Year 2019.

2/ Maryland counties may provide county supplemental programs. Prince George's County does not offer a supplement to the homeowners' tax

credit program. However, several Prince George's County municipalities offer a supplemental program including the cities of Bowie, College

Park, Greenbelt, Hyattsville, and Mount Rainier.

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Table 16: Property Tax Relief Programs, Continued

JURISDICTION

HOUSEHOLD

GROSS

INCOME

LESS THAN:

NET WORTH

LESS THAN:

RELIEF AMOUNT:

VIRGINIA

Alexandria 3/ 4/

$100,000

$430,000

Arlington County 6/

$99,472

$413,714

Fairfax 3/ 4/

$72,000

$340,000

Fairfax County 3/ 4/

$72,000

$340,000

Falls Church 3/

$72,000

$400,000

Loudoun County

$72,000

$440,000

10/

Prince William County 3/

$89,900

$340,000

11/

Source: Survey of local government officials and local government web sites.

3/ Tax relief program is for residents 65 years of age or older, or permanently and totally disabled. Disabled applicants may exclude the first

$10,000 of income. For each relative other than a spouse residing in the household, the first $7,500 may be excluded.

4/ Excludes home and one acres of land from net worth calculation.

5/ Household income less than $40,000 receives full exemption; income $40,001 to $55,000 receives a 50 percent partial exemption; income

$55,001 to $72,000 receives 25 percent partial exemption; income not more than $72,000 can receive deferral of tax. Those with income over

$72,000 but not more than $100,000 may defer their taxes, also subject to repayment with interest.

6/ For Seniors 65 and older, or homeowners with a total and permanent disability. For deferrals, asset level cannot exceed $558,518; income

cannot exceed $106,969.

7/ The asset level excludes the value of the residence. The amount of relief received, if eligible, is based on household income and the value of

the household's assets. Net worth limit is $558,513 for a deferral.

8/ Incomes up to $52,000 receive 100% relief. Incomes of $52,001 to $62,000 50% relief; incomes $62,001 - $72,000 receive 25% relief, with

a deferral of the balance.

9/ Incomes $38,840 and below (0-40% AMI) receives 100% relief; $38,841 to $58,260 (41-60% AMI) receives 75% relief; $58,261 to $62,100

(61-80% AMI) receives 50% relief; $62,101 to $97,100 (81-100% AMI) deferral only.

10/ Total exemption is granted for home and up to three acres. Those with net worth up to 920,000 and income up to $46,00 may receive a partial

exemption up to 50%.

11/ Total exemption of the tax on a home and up to one acre of land it occupies is granted to applicants whose gross household income does not

exceed $62,000 annually. Partial exemption of the tax on a home and up to twenty-five acres of land it occupies is

granted to applicants whose gross household income is greater than $62,000 but does not exceed $89,900.

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PROPERTY TAXES

TANGIBLE PERSONAL PROPERTY

District of Columbia

The tax is imposed on all tangible personal property, except inventories, used in a trade or

business. Such property includes machinery, equipment, furniture, fixtures, and supplies.

Tangible personal property leased to another business or individual located in the District of

Columbia is taxable to the owner. Tangible personal property must be assessed at full and true

value. Renters under a "lease purchase" or a "security purchase" agreement who are obligated to

become the owner must report the property on the personal property tax return. The first

$225,000 of taxable value is exempt from tax.

Maryland

The state of Maryland exempts business property (including commercial inventory,

manufacturing R&D inventory, and manufacturing R&D machinery) from tangible personal

property taxation. The state is responsible for the assessment, at full cash value, of corporate

tangible personal property.

A county rate may apply to commercial and manufacturing inventories; most, but not all,

Maryland counties levy a personal property tax. The county rates of tax on tangible personal

property are 2.5 times those for real property.

Virginia

The tax on tangible personal property is a local tax in Virginia. The rates shown in Table

17, page 54 are nominal. Counties and cities impose different rates on tangible personal property

and classify certain items separately from other tangible personal properties.

Virginia jurisdictions are the only ones in the Washington Metropolitan Area that tax

automobiles (as well as motorcycles, recreational vehicles, boats, airplanes, and trailers) under

the tangible personal property tax. Mobile homes are taxed at the real property tax rate. Motor

vehicles must be listed separately and are assessed at trade-in value according to the January 1

(of each year) National Automobile Dealers Association handbook in Alexandria, Falls Church,

Fairfax City, Fairfax County, and Prince William County. The clean loan value is the basis used

in Arlington County and Loudoun County. All Northern Virginia jurisdictions included in the

report prorate vehicle personal property taxes based on the length of time the vehicle is in their

locality.

Beginning in 1999, Virginia adopted a personal property tax relief program on the first

$20,000 of a vehicle’s assessed value. For calendar year 2016, personal property taxes paid by

citizens were reduced by various percentages based on the 2015 level of state reimbursement in

which the state reimbursed the locality for that reduced assessment amount. Owners of vehicles

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valued at less than $1,000 pay no tax (the state pays 100 percent). In Arlington County, vehicles

that are valued at $3,000 or less, and are PPTR eligible have no tax liability and pay only an

annual decal fee. Each vehicle that is PPTR eligible pays no tax on the first $3,000 of value.

Several counties offer additional relief for taxpayers meeting income, age, or other

eligibility criteria. Prince William County allows an exemption of personal property taxes on one

automobile per qualifying applicant for the low-income elderly and the permanently and totally

disabled. County tax relief applicants who meet the income and net worth requirements may

qualify for a reduced tax rate on one vehicle per qualifying applicant. Qualifications for personal

property tax relief for the low-income elderly and disabled are as follows:

• Gross income of the applicant may not exceed $89,900 (as of December 2019).

• The combined net assets of the applicant and spouse may not exceed $340,000.

• Personal property relief for this program is limited to one vehicle.

• Disabled applications may exclude the 1

$7,500 of income from the calculation of total

income, i.e., an effective gross income of $29,500.

Loudoun County provides an alternative personal property tax rate on one vehicle per

qualified applicant who is age 65 or over or declared permanently and totally disabled by

January 1

of the current year. The vehicle must be used primarily by or for the applicant, and if

co-owned, the gross income limitation includes income from all sources of the owners of the

vehicle and the spouse of the applicant. The gross income limit for the alternative tax rate is

$52,000. The applicant’s net worth cannot exceed $195,000, which may exclude the value of the

applicant’s Loudoun County residence and up to one acre of land on which it is situated. The

alternative tax rate is established annually by the Board of Supervisors. The current rate is $2.10

per $100 of assessed value for qualified applicant’s vehicles.

Falls Church allows an exemption of up to the first $25.00 of personal property taxes plus

$33 of decal relief (total $58) on one automobile per household for the low-income elderly and

the permanently and totally disabled (income limit is $20,000 per year).

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Table 17: Tangible Personal Property

Tax Year 2019– 2020 (FY 2020) 1/

RATE PER $100 OF VALUE

DISTRICT OF COLUMBIA

$3.40 2/

MARYLAND 3/

Charles County

$3.01

Montgomery County

$2.43

Prince George’s County

$3.38 4/

VIRGINIA

Alexandria

$5.33 5/ ($4.50) 6/ ($3.55) 7/

Arlington County

$5.00 5/

Fairfax

$4.13 5/

Fairfax County

$4.57 5/ ($1.09) 8/ ($0.01) 9/

Falls Church

$5.00

Loudoun County

$4.20 5/ 10/ ($2.75) 6/ ($1.205) 8/ ($1.00) 11/

($0.01) 9/ ($4.00) 12/ ($2.10) 13/

Prince William County

$3.70 4/ 12/ ($0.00) 13/ ($1.25) 14/ ($1.00) 15/

($1.125) 16/

Source: Survey of local government officials and local government web sites.

1/ The personal property tax year in Virginia area jurisdictions is on a calendar year basis. The rates submitted by Virginia jurisdictions for this

report are applicable to calendar year 2019. In the District of Columbia and the Maryland area jurisdictions, the 2019 personal property tax

year is July 1, 2019 to June 30, 2020. The rates presented are those in effect for this period. Rates in parentheses apply to specific items

detailed in the corresponding footnote.

2/ First $225,000 of value is exempt from tax.

3/ Maryland property tax rate is not levied against personal property. Rates listed for all three counties are unweighted county rates.

4/ Includes MNCPPC, WSTC, and stormwater rates. Rate applies to non-town businesses. The county rate for municipalities ranges from $2.012

to $2.294.

5/ Rate applied to regular individual personal property and business tangible personal property. Alexandria offers 100% relief on the total

assessed value of vehicles valued $1,000 and under; 53% relief on the total assessed value for vehicles valued between $1,001 and $20,000.

For CY 2019, Arlington County provided 100% tax relief for assessed vehicle value at or below $3,000. For assessed value between $3,001

and $20,000 for conventional vehicles, the taxpayer paid 72% of the tax liability, with the State block grant funds contributing the remaining

28%. For calendar year 2019, taxpayers in Fairfax County received a 60.% tax relief on their Personal Property tax liability on the first

$20,000 of the value for vehicles owned by individuals. Vehicles valued less than $1,000 received a 100% tax relief. Taxpayers in Falls

Church received tax relief of 43%. For CY 19, taxpayers in Loudoun County received 38% tax relief on their Personal Property tax liability

on the first $20,000 of the value for vehicles owned by individuals. Vehicles valued less than $1,000 received a 100% tax relief. Prince

William County taxpayers received 46% tax relief on assessed values under $20,000.

6/ Rate applied to machinery and tools, personal property used in a research and development business, and Interstate Motor Carrier vehicles.

7/ Vehicles with special equipment designed to aid the handicapped are assessed at a rate of $3.55 per $100 of value.

8/ Rate applied to mobile homes and public service corporation non-vehicular personal property.

9/ Rate applies to vehicles specifically equipped for the handicapped, privately-owned vans used for van pools, and vehicles belonging to

volunteer fire and rescue squad members, vehicles owned by reserve deputy sheriffs and auxiliary police officers. The same rate also applies

to boats, antique automobiles, aircraft and flight simulators, and property owned by homeowners' associations. One vehicle owned by a fully

disabled veteran is included in this special subclass.

10/ Vehicles using clean special fuels.

11/ Rate applied to four-wheeled electrically powered low-speed vehicles.

12/ Rate applied to heavy construction machinery.

13/ Rate applied to vehicles specially equipped for use by the handicapped and vehicles owned by certain elderly and disabled individuals.

14/ Rate applied to computer equipment and peripherals used in a trade/business.

15/ Rate applied to property used for research and development.

16/ Rate applied to mobile homes.

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PUBLIC UTILITIES TAX

District of Columbia

The District imposes a gross receipts tax on utilities operating in the District of Columbia.

The rate is 10 percent of gross receipts from sales to residential customers and 11 percent of

gross receipts from sales to nonresidential customers. In addition, similar taxes are assessed on

heating oil companies, natural and artificial gas marketers, long distance telephone companies,

and subscription television, video, and radio service providers. Under provisions of the

Telecommunications Competition Act of 1996, the District assesses an 11 percent gross receipts

tax on local telephone companies, including wireless telecommunications providers. The

regulated utilities pay the bulk of the revenues associated with these taxes.

Maryland

Called the franchise tax in Maryland, the public utilities tax applies to any company

engaged in a telegraph, telephone, oil pipeline, electric, or gas business in the state. The tax is

based on gross receipts for the preceding calendar year. The rate is 2 percent and receipts subject

to this tax are not subject to state income tax except for long distance phone companies, which

surcharge the tax to their customers.

In addition, retail sales of natural or artificial gas, oil, electricity, coal, nuclear fuel

assemblies, and steam for nonresidential use are also taxed by several local subdivisions.

Virginia

Electric and gas; water or heat; light and power companies; and telegraph and telephone

companies are subject to tax at different rates. Telephone and telegraph taxes are based on

mileage of poles or conduits, including mileage of buried cable; an additional charge is

applicable to gross receipts from intrastate business.

Virginia exempts consumers from tax for the use or consumption of gas, electricity, and

water delivered through mains, lines, or pipes. However, some Virginia localities do tax

consumers for these services at different rates.

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Table 18: Public Utilities Tax to Residential Consumers

JURISDICTION

ELECTRICITY

MAXIMUM

MONTHLY

TAX

TELEPHONE

MAXIMUM

MONTHLY

TAX

GAS

MAXIMUM

MONTHLY

TAX

WATER

MAXIMUM

MONTHLY

TAX

DISTRICT OF COLUMBIA

$0.0070/kwh

---

$.0707/

therm

---

MARYLAND

$0.00062/kwh

---

$0.00402/therm

---

Montgomery County

$0.01106/

kwh 1/

---

$2.00

---

$.09515/

therm 1/

---

Prince George’s County

$0.0099/kwh 1/

---

$0.084949/therm

---

VIRGINIA

$0.00155/kwh 6/

$0.0135/ccf

Alexandria

$ 1.12 plus

$0.012075/kwh

$3.00

---

$ 1.28 plus

$0.124444/ccf

$3.00

15.0%

Arlington County

$0 plus

$0.0111/kWh

with first 400

kwh exempt

$3.00

---

$0 plus

$1.038/ccf with

first 20 ccf

exempt

$3.00

---

Fairfax

$1.05 plus

$0.01136/kwh

$2.25

---

$1.05 plus

$0.05709/ccf

$2.25

15.0%

$15.00

Fairfax County 4/

$ 0.56 plus

$0.00605/kwh

$ 4.00

---

$ 0.56 plus

$0.05259/ccf

$ 4.00

---

Falls Church

$0.70 plus

$0.007535/kwh

$ 5.00

$0.70 plus

$0.0039/ccf

$ 5.00

10.0%

$ 5.00

Loudoun County

$0.63 plus

$0.06804/kwh

$ 2.70

---

$0.63 plus

$0.06485/ccf

$ 2.70

---

Prince William County

$1.40 plus

$0.01509/kwh

$ 3.00

$1.60 plus

$0.06/ccf

$ 3.00

---

Source: Survey of local government officials and local government web sites.

1/ This energy tax is levied upon every person transmitting, distributing, manufacturing, producing, or supplying electricity, gas, steam, coal, etc., in Montgomery and Prince George's Counties.

Although the tax is levied upon the distributor, it is effectively borne by the consumer.

2/ Montgomery County telephone tax per line and $3.50 per wireless telephone each month.

3/ All local telephone utility taxes in Virginia are taxed with 5 percent statewide communications sales and use tax.

4/ Per month maximum shown is for residential consumers only; separate rates are in effect for commercial consumers.

5/ Maximum monthly tax for commercial consumers is $100.

6/ For up to 2,500 kwh used. Between 2,500 and 50,000 kwh, the rate is $0.00099; and over 50,000 kwh, the rate is $0.00075.

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Table 19: Public Utilities Tax to Suppliers

JURISDICTION

UTILITIES

SUBJECT TO TAX

RATE

BASIS

DISTRICT OF COLUMBIA

Telecommunications

Residential

Non-residential

10.0%

11.0%

Gross receipts

Residential

Non-residential

MARYLAND

Telegraph, telephone,

oil pipeline, light and

power, electric, or gas

companies

2.0%

Gross Receipts

VIRGINIA

Water

2.0%

Gross Receipts

Telephone

Source: “DC Tax Facts, 2020.” Government of the District of Columbia, Office of the Chief Financial Officer, Office of Revenue Analysis,

p. 26.

1/ Local consumption tax rates and a special regulatory tax rate may also apply.

2/ All local telephone utility taxes in Virginia are taxed with 5 percent statewide communications sales and use tax.

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RECORDATION AND TRANSFER TAXES

District of Columbia

A tax of 1.1 percent of the consideration is imposed on each deed when it is submitted for

recording if the fair market value is under $400,000; otherwise, the rate is 1.45 percent on fair

market value $400,000 and above.

The minimum recordation tax is $1.00.

The Fiscal Year 2018 Budget Support Act of 2017 provides a reduced recordation tax rate

of 0.725 percent or reduced economic interest in a cooperative unit tax rate to qualified first-time

District homebuyers, based on their residency status and income, provided that the entire benefit

of the reduced recordation tax rate is allocated to the first-time District homebuyer, as shown on

the settlement statement, or closing disclosure form.

Another tax of 1.1 percent of the consideration paid is imposed on each transferor for

each transfer if the fair market value is under $400,000 and is payable at the time the deed is

submitted for recording; otherwise, the rate is 1.45 percent on fair market value $400,000 and

above. The minimum transfer tax is $1.00.

Transfers of economic interests in the District of Columbia are subject to a 2.9 percent tax

based on consideration paid (2.2 percent for cooperatives valued less than $400,000). For

qualified first-time home buyers, the rate for an economic interest in a cooperative unit is: (i)

1.825 percent when consideration allocable to the real property is less than $400,000; or (ii)

2.175 percent when consideration allocable to the real property is $400,000 or greater.

Maryland

The Maryland state realty transfer tax is 0.5 percent of the consideration, there is a 0.25

percent rate for first-time homebuyers. Recordation taxes differ by county and range from a rate

of $2.50/$500 of consideration (0.5%) in Baltimore and Howard Counties, to a high of

$6.00/$500 of consideration (1.2%) in Frederick and Talbot Counties.

Charles County

The recordation tax in Charles County is 1.00 percent. A new county transfer tax took

effect on August 8, 2016, the rate of which is 0.5 percent of the purchase price of the property.

First-time homebuyers who will live in their home are exempt from paying the tax on the first

$50,000 of the purchase price.

Montgomery County

Montgomery County's recordation tax is $8.90 per thousand of consideration rounded up

Effective fiscal year 2020, new rates of 2.5 percent for deed recordation and deed transfer taxes respectively, were added for commercial

properties sold for more than $2 million.

Part II: A Comparison of Tax Rates in the Washington Metropolitan Area as of January 1, 2020

2019 Tax Rates and Tax Burdens – Washington Metropolitan Area

Page 59

to the next increment of $500 up to $500,000 of consideration (this is a rate of 0.89 percent).

(For property valued over $500,000 it is computed at 1.35 percent). A $890 exemption may be

available for owner occupied residential property.

The county transfer tax is typically 1 percent of the selling price of a property.

Prince George's County

The recordation tax rate in Prince George's County is $5.00 per $1,000 of consideration

(0.50%). In addition, the county imposes a transfer tax of 1.4 percent of the selling price.

Virginia

The state recordation tax is $0.25 per $100, or fraction thereof, of the consideration of the

deed or the actual value of the property conveyed, whichever is greater. The state also levies a

tax on the grantor of $0.50 per $500, excluding any liens or encumbrances, on the purchase

price. In the Northern Virginia region, an additional grantor's tax of $0.15 per $100 (or portion of

$100) of the purchase price or fair market value of the property is levied and revenue goes to the

Northern Virginia Transportation District Fund. In addition, the state allows cities and counties

to impose a recordation tax of up to one-third of the state tax. The cities of Alexandria, Fairfax,

Falls Church, and the counties of Arlington, Fairfax, Loudoun, and Prince William impose this

tax at the rate of $0.0833 per $100.

The state transfer tax is $0.50 for each $500 of consideration, or fraction thereof,

exclusive of any lien or encumbrance remaining thereon when the consideration or the value of

the interest exceeds $100. One half of the conveyance tax collected is returned to the state

treasury and one half goes into the treasury of the locality of the property. The land transfer fee is

one dollar and is collected whenever improved or unimproved land of any amount of acreage is

transferred between two parties.

Part II: A Comparison of Tax Rates in the Washington Metropolitan Area as of January 1, 2020

2019 Tax Rates and Tax Burdens – Washington Metropolitan Area

Page 60

SALES AND USE TAXES

District of Columbia

The District of Columbia has six tax categories that fall under the general sales and use

tax. The retail sales tax rate of 6 percent is imposed on all tangible personal property sold or

rented at retail in the District and on certain selected services. Grocery-type foods, prescription

and non-prescription drugs, and professional services such as consulting, engineering, legal, and

physician services, are among the items exempt from the sales tax. Construction materials and

business purchases of public utility services are among those included. The Tax Revision

Commission Implementation Amendment Act of 2014 (BSA Subtitle (VII) (B)) expanded the

sales tax base to include some services not taxed in the District of Columba. These include

bottled water delivery services and other direct selling establishments, carpet and upholstery

cleaning services, fitness and recreational sports centers, and other personal care services such as

tanning, car washes, bowling centers and billiard parlors. The other rate categories apply to

goods and services as indicated below.

The FY 2020 Budget Support Act of 2019, effective October 1, 2019 exempts sales of

diapers and incontinence products from the retail sales tax. Additionally, the Act amends the

definition of soft drinks to only exclude any beverages that are 100 percent fruit or vegetable

juice or are at least 50 percent milk, including soy, rice, or similar milk substitutes and increases

the general gross receipts tax on sales of soft drinks to 8 percent from 6 percent.

The use tax is imposed at the same rate on property sold or purchased outside the District

and then brought into the District to be used, stored, or consumed. Vendors who are subject to

the jurisdiction of the District are required to collect and pay the sales or use tax. When the

vendor is not subject to the jurisdiction of the District, or when the purchaser brings the property

into the District, the purchaser is required to pay the tax. Beginning January 1, 2019, remote

vendors selling goods (including digital) will be required to collect tax from DC purchasers and

in April 2019 marketplace facilitators will be required to collect tax from all its hosted vendor

transactions with DC purchasers.

ITEMS

2020 SALES

TAX RATE

Retail rate for sales of certain tangible personal property and selected services; food or

drinks sold in vending machines

6.0%

Medical marijuana

6.0%

Soft drinks. A "soft drink" is defined as a beverage with a natural or artificial

sweetener that contains less than 100% juice; or a beverage that is less than 50% milk,

soy or other milk substitutes; or coffee, coffee substitutes, cocoa, or tea.

8.0%

Prepared meals for immediate consumption, restaurant meals, liquor prepared for

immediate consumption on the premises, and prepaid telephone cards,

10.0%

Off-premises alcohol, rental vehicles, tickets sold for games and events at the ballpark,

merchandise sold at the baseball stadium, tickets sold for games and events at the

Capital One Center and merchandise sold at the Capital One Center

10.25%

Hotels (transient accommodations)

14.95%

Parking motor vehicles in commercial lots

18.0%

Source: “DC Tax Facts 2020.” Government of DC, Office of the Chief Financial Officer, Office of Revenue Analysis, p. 33.

Part II: A Comparison of Tax Rates in the Washington Metropolitan Area as of January 1, 2020

2019 Tax Rates and Tax Burdens – Washington Metropolitan Area

Page 61

Maryland

A 6 percent tax is imposed on retail sales, including the rental, lease or royalty of tangible

personal property, including: (a) sales of food and drink on purchases over $1.00; (b)

production, fabrication or printing of tangible personal property on special order; (c) sales of

tangible personal property to contractors, builders or landowners for use or resale in the form of

real estate; (d) lodgings or accommodations; and (e) sales of tangible personal property and/or

services to persons who will use them as facilities, tools, machinery or equipment, even though

the intention is to transfer title to the property. Alcoholic beverage sales are subject to a 9 percent

tax.

Rental of passenger cars for 180 days or less is taxed at the rate of 11.5 percent, while

certain short-term truck rentals are taxed at 8 percent.

Residential public utilities (natural or artificial gas, electricity, steam, and coal) are

exempt from the sales tax. This exemption covers residential properties containing not more than

four units, including cooperative housing, condominiums, and other similar residential living

arrangements.

In addition to the state rate of 6 percent, Maryland localities impose a tax ranging from

0.5 percent to 10 percent on admissions to movie theaters, concerts, amusement parks, and

various other events.

Virginia

A 5.0 percent state tax and a state-administered 1.0 percent local tax is imposed on retail

sales, proceeds from leases and rentals, and proceeds from transient accommodations. Among

the exempt items are gas, electricity, home heating fuel, water, alcoholic beverages sold by the

state, certain medical supplies, and charitable purchases.

Vending machine dealers are taxed at 6.3 percent (there is an additional 0.7 percent state

tax imposed in the localities that make up Northern Virginia and Hampton Roads, making the

rate in these regions 7 percent, and the sales tax rate on groceries is 2.5 percent.

Part II: A Comparison of Tax Rates in the Washington Metropolitan Area as of January 1, 2020

2019 Tax Rates and Tax Burdens – Washington Metropolitan Area

Page 62

Table 20: Metropolitan Area Sales and Use Tax Rates

JURISDICTION

GENERAL RATE

ADMISSIONS

TRANSIENT

ACCOMMODATIONS

RESTAURANT

MEALS

STATE

LOCAL

STATE

LOCAL

STATE

LOCAL

STATE

LOCAL

DISTRICT OF

COLUMBIA

6.0%

---

10.25%

---

14.95%

---

10.0%

---

MARYLAND

6.0%

---

10.0%

---

6.0%

---

6.0%

---

Charles County

---

10%

---

5.0%

---

Montgomery County

---

7.0%

---

7.0%

3/ 4/

---

Prince George’s County

---

10.0%

---

7.0%

---

VIRGINIA

5.0%

---

2.0%

---

6.0%

---

Alexandria

---

+1.0%

---

10.0%

---

+6.5% plus

$1.00 per

night/room

---

+5.0%

Arlington County

---

+1.0%

---

+5.25%

---

+4.0%

Fairfax

---

+1.0%

---

+4.0%

---

+4.0%

Fairfax County

---

+1.0%

---

+4.0%

---

Falls Church

---

+1.0%

---

+8.0% 9/

---

+4.0%

Loudoun County

---

+1.0%

---

+5.0%

---

Prince William County

---

+1.0%

---

+5.0%

---

Source: Survey of local government officials and local government web sites.

+ In addition to state rate.

1/ Permanent residents of 120 days or more are exempt from the tax.

2/ Rates are limited to 5% when the state sales tax is applied, since the combination of the two taxes may not exceed 10%.

3/ Rates range from 5 to 10%.

4/ 3.5% is allocated to the Montgomery County Conference and Visitors Bureau, and Convention Center.

5/ This is called the “state transient occupancy tax.”

6/ This is the state general sales tax rate for the Northern Virginia area (5% state + 1% local add-on).

7/ Alexandria admissions tax not to exceed $0.50 per person.

8/ There is a $0.05 tax per admission for bowling.

9/ Includes a 2% transportation tax.

Part II: A Comparison of Tax Rates in the Washington Metropolitan Area as of January 1, 2020

2019 Tax Rates and Tax Burdens – Washington Metropolitan Area

Page 63

WATER AND SEWERAGE USER CHARGES (RESIDENTIAL)

Charges for water and sanitary sewerage and basic rates for each jurisdiction are

presented in Table 21, on the following page. Average cost per 1,000 gallons is the common

standard used. Special charges for service connections, availability, demand and account service

and front foot (a foot measured along the front of a piece of property) assessments are not

included in Table 21.

The rates for Loudoun and Prince William Counties are those that exist in the town of

Leesburg. This is done to simplify the rates because rates differ throughout these counties

according to the city or town of residency.

In Virginia and Maryland jurisdictions, billing is quarterly, while the District of Columbia

bills monthly.

Part II: A Comparison of Tax Rates in the Washington Metropolitan Area as of January 1, 2020

2019 Tax Rates and Tax Burdens – Washington Metropolitan Area

Page 64

Table 21: Water and Sewerage User Charges

(Residential), 2019 (unless noted)

JURISDICTION

WATER

SEWERAGE

MINIMUM

DISTRICT OF COLUMBIA

$4.09/1,000 gal.

$11.89/1,000 gal.

None

MARYLAND

Charles County

$4.61/1,000 gal.

$8.70/1,000 gal.

None

18,000 gallons or less per

quarter for Residential

Customers

single family residential

capped at 24,000 gallons

Montgomery County

Low $5.09 /1,000 gal.

Usage 49 gal. or less/day

High $ 8.34 /1,000 gal.

Usage 9,000 gal./day

or more

$ 6.80 /1,000 gal.

49 gal. or less/day

$ 11.89 /1,000 gal.

Usage 9,000 gal./day

or more

None

Prince George’s County

Low $5.09/1,000 gal.

Usage 49 gal. or less/day

High $8.34/1,000 gal.

Usage 9,000 gal./day

or more

$6.80/1,000 gal.

49 gal. or less/day

$11.89/1,000 gal.

9,000 gal./day or more

None

VIRGINIA

Alexandria

$29.55 flat fee

up to 6,000 gal./qtr.

$6.36/1,000 gal. +

$4.51/bill

+ sewer service charge

None

Arlington County 2/

$14.20/1,000 gal.

None

Fairfax 3/

$3.20/1,000 gal.

$8.22/1,000 gal

$17.49 water

$15.67 sewer

Part II: A Comparison of Tax Rates in the Washington Metropolitan Area as of January 1, 2020

2019 Tax Rates and Tax Burdens – Washington Metropolitan Area

Page 65

Table 21: Water and Sewerage User Charges

(Residential) 2019, Continued

JURISDICTION

WATER

SEWERAGE

MINIMUM

Fairfax County

$3.20/1,000 gal.

$7.28/1,000 gal.

None

Falls Church 4/

$5.00/1,000 gal.

over 5,000 gal.

$9.87/1,000 gal.

None

Loudoun County

$2.53/1,000 gal.

$4.97/1,000 gal.

None

Prince William County

(Service Authority)

$4.33/1,000 gal.

$6.65/1,000 gal.

None

Source: Survey of local government officials and local government web sites.

1/ As of July 1, 2019, these rates represent the first of two rate increases and include $7.63/1,000 gal for wastewater charge, and $2.28/1,000 gal

for a City Sanitary Sewer System Capital Investment and Maintenance Fee.

2/ Rate for FY21.

3/ Residential customers are taxed on water and sewer at a rate of 10 percent each, with a maximum of $15 each.

4/ As of January 3, 2014, water service is provided to City of Falls Church residents and businesses by Fairfax Water. All customers of the Falls

Church Water Utility automatically became customers of Fairfax Water on January 3. The rates originally effective with service rendered July

1, 2016 were effective through June 30, 2019.

Part II: A Comparison of Tax Rates in the Washington Metropolitan Area as of January 1, 2020

2019 Tax Rates and Tax Burdens – Washington Metropolitan Area

Page 66

Miscellaneous Taxes

District of Columbia

911 Emergency

Wireless/Wireline Subscribers $0.76 per line per month

Centrex Lines $0.62 per line per month

Private Branch Exchange (PBX) Station $0.62 per line per month

Bag Tax

The District requires all businesses that sell food or alcohol to charge five cents for every

carryout paper or plastic disposable bag. The business retains one cent (or two cents if it offers a

rebate when customers bring their own bag), and the remaining three or four cents goes to

the Anacostia River Clean Up and Protection Fund.

Maryland

Montgomery County:

911 Emergency $1.00 per bill per month

Telephone Service $0.75 to county

Charge $0.25 to state trust fund

Prince George's County:

911 Emergency $1.00 per line per month

Telephone Service $0.75 to county

Charge $0.25 to state trust fund

Charles County:

911 Emergency $1.00 per line per month

Telephone Service $0.75 to county

Charge $0.25 to state trust fund

Virginia

VA E-911 All local E-911 fees have been

replaced with a statewide $0.75

per line per month fee. Also, all

local mobile telecommunications

taxes in Virginia have been

replaced with a 5 percent

statewide communications sales

and use tax.

Part II: A Comparison of Tax Rates in the Washington Metropolitan Area as of January 1, 2020

2019 Tax Rates and Tax Burdens – Washington Metropolitan Area

Page 67

Alexandria:

Daily Rental Tax 1 percent on the gross proceeds

of a short-term rental business

1.5 percent on the gross proceeds

of the rental on heavy equipment

Public Rights-of-Way Use Fee $1.20 per line per month

Arlington County:

Short-term Rental Tax 1 percent on the gross proceeds

of short-term rental receipts

Solid Waste & Recycling Fee $319 per year

Fairfax County:

Short-term Daily Rental 1 percent on the gross proceeds

of a short-term rental business

Falls Church:

Short-term Rental 1 percent on gross proceeds of

a short-term rental business

Loudoun County:

Daily Short-term Rental Tax 1 percent on gross proceeds of

a short-term rental business

Prince William County:

Daily Rental Tax 1 percent daily rental tax; 1.5

percent of the proceeds from

heavy equipment

Business Litter Tax

Virginia imposes an annual $10 litter tax on each business establishment that produces

litter. An additional $15 tax is levied on each business operating as a manufacturer, wholesaler,

distributor, or retailer of groceries, soft drinks, carbonated water, beer, or other malt beverages.

Part II: A Comparison of Tax Rates in the Washington Metropolitan Area as of January 1, 2020

2019 Tax Rates and Tax Burdens – Washington Metropolitan Area

Page 68

Uniform Disposition of Unclaimed Property

District of Columbia

The District of Columbia is authorized to act as conservator over property presumed

abandoned and held by businesses and financial corporations by mandating the reporting and

delivery of such property into the custody of the Mayor.

The Uniform Disposition of Unclaimed Property Act includes all tangible and/or

intangible personal property and requires that reports be filed annually. Banks, businesses, and

other financial corporations must report on or before November 1 for property abandoned by the

preceding June 30. Life insurance companies must report by May 1 for property abandoned by

the preceding December 31.

Maryland

Maryland's unclaimed property law is custodial in nature. The law covers tangible and

intangible personal property and requires holders to file a report annually.

The reporting period for an insurance company is from January 1 through December 31,

of each year and the report is due no later than April 30 of the following year. Reports for all

other entities (banks, financial organizations, utilities, and corporations) cover the period of July

1 through June 30 of each year and must be filed no later than October 31 of that year.

Virginia

All unclaimed property is subject to the custody of the Commonwealth of Virginia,

including funds or other property, tangible and intangible, including any income or increments

thereon, less any lawful charges that are held, issued, or owing in the ordinary course of the

holder's business and have remained unclaimed by the owner.

Banking organizations, business associations and financial organizations must file an

unclaimed property report before November 1 of each year as of June 30 preceding. Insurance

corporations must file a report before May 1 of each year as of the preceding December 31.

Appendix

2019 Tax Rates and Tax Burdens – Washington Metropolitan Area

Page 69

Appendix: Additional Maps

Appendix

2019 Tax Rates and Tax Burdens – Washington Metropolitan Area

Page 70

Map 2: DC Metropolitan Area Map

Montgomery County, MD

Arlington,

Alexandria,

Fairfax County, VA

Fairfax

City, VA

Falls Church,

Prince George’s

County, MD

Appendix

2019 Tax Rates and Tax Burdens – Washington Metropolitan Area

Page 71

Map 3: Combined 2019 Metropolitan Area Tax Burdens

(Income, Property, Sales, & Auto) as a % of Income

(Family Earning $25,000/ Year)

Source: ORA Analysis. Note: The lighter green shading represents a lower tax burden.

Appendix

2019 Tax Rates and Tax Burdens – Washington Metropolitan Area

Page 72

Map 4: Combined 2019 Metropolitan Area Tax Burdens

(Income, Property, Sales, & Auto) as a % of Income

(Family Earning $50,000/ Year)

Source: ORA Analysis. Note: The lighter green shading represents a lower tax burden.

Appendix

2019 Tax Rates and Tax Burdens – Washington Metropolitan Area

Page 73

Map 5: Combined 2019 Metropolitan Area Tax Burdens

(Income, Property, Sales, & Auto) as a % of Income

(Family Earning $75,000/Year)

Source: ORA Analysis. Note: The lighter green shading represents a lower tax burden.

Appendix

2019 Tax Rates and Tax Burdens – Washington Metropolitan Area

Page 74

Map 6: Combined 2019 Metropolitan Area Tax Burdens

(Income, Property, Sales, & Auto) as a % of Income

(Family Earning $100,000/ Year)

Source: ORA Analysis. Note: The lighter green shading represents a lower tax burden.

Appendix

2019 Tax Rates and Tax Burdens – Washington Metropolitan Area

Page 75

Map 7: Combined 2019 Metropolitan Area Tax Burdens

(Income, Property, Sales, & Auto) as a % of Income

(Family Earning $150,000/ Year)

Source: ORA Analysis. Note: The lighter green shading represents a lower tax burden.

Office Locations and Telephone Numbers

Office of the Chief Financial Officer

The John A. Wilson Building

1350 Pennsylvania Avenue, NW, Suite 203

Washington, DC 20004

Office hours: Monday through Friday, 8:00 a.m. – 6:00 p.m.

(202) 727-2476

Office of the Chief Financial Officer

Fitzroy Lee, Interim Chief Financial Officer

Angell Jacobs, Chief of Staff and Deputy Chief Financial Officer

David Tseng, General Counsel

Alok Chadda, Chief Information Officer

Paul Lundquist, Executive Director for Management and Administration

David Umansky, Public Affairs Officer

Timothy Barry, Executive Director for Integrity & Oversight

Marshelle Richardson, Chief Risk Officer

Jeffrey Gander, Continuous Improvement Officer

Office of Revenue Analysis (ORA)

Norton Francis, Interim Deputy Chief Financial Officer

1101 4

Street, SW, Suite W770, Washington, DC 20024

(202) 727-7775

Office of Budget and Planning (OBP)

Eric Cannady, Deputy Chief Financial Officer

1350 Pennsylvania Avenue, NW, Suite 229, Washington, DC 20004

(202) 727-6234

Office of Finance and Treasury (OFT)

Carmen Pigler, Deputy Chief Financial Officer and Treasurer

1101 4

Street, SW, Suite W800, Washington, DC 20024

(202) 727-6055

Office of Financial Operations and Systems (OFOS)

Bill Slack, Deputy Chief Financial Officer

1100 4

Street, SW, Suite E800, Washington, DC 20024

(202) 442-8200

Office of Tax and Revenue (OTR)

Keith Richardson, Deputy Chief Financial Officer

1101 4

Street, SW, Suite W750, Washington, DC 20024

(202) 442-6200

DC Lottery

Ridgely Bennett, Interim Executive Director

Economic Development and Regulation

Leroy Clay III, Associate Chief Financial Officer

EventsDC

Henry Mosley, Associate Chief Financial Officer

Government Operations

Angelique Hayes Rice, Associate Chief Financial Officer

Government Services

George Dines, Associate Chief Financial Officer

Human Support Services

Delicia Moore, Associate Chief Financial Officer

Not-for-Profit Hospital Corporation

Lilian Chukwuma, Chief Financial Officer, United

Medical Center

Primary and Secondary Education

Deloras Shepherd, Associate Chief Financial Officer

Public Safety and Justice

David Garner, Associate Chief Financial Officer

Prepared By:

Government of the District of Columbia

Office of Revenue Analysis

1101 4

Street, S.W.

Suite W770

Washington, DC 20024

(202) 727-7775