Volume 1 - Executive Summary - Office of the Chief Financial Officer

Property tax changes:
Repeal subject to appropriation sections from existing law. Legislation providing tax abatements for United House
of Prayer for All People, Samuel J Simmons NCBA Estates, Washington Ballet, Carver 2000 Low-Income and
Senior Housing Project, and Friendship Place were made subject to inclusion in the financial plan. The proposal is
to remove those sections of the law and recognize the cost in the budget.
Nonprofit affordable housing relief fund. This subtitle allows non-profit affordable housing developers to maintain
their exempt status from real property taxation, deed recordation tax, and payments in lieu of taxes offered for qualified
affordable housing projects during the time period the project is being developed for, or continues to be used
for, affordable housing and is under the applicable restrictions of the federal low-income housing tax credit (LIHTC)
compliance period.
DCRA vacant property program enhancement. DCRA will add two additional inspectors to certify vacant
properties.
Index homestead exemption from 2011. Under current law, the homestead exemption will increase by inflation from
a base year 2007. This proposal would change the base year to 2011 and the current homestead exemption will be
indexed by one year of inflation.
Sales and use tax changes:
Expansion of hours for alcohol sales. These subtitles allow liquor stores to open at 7:00am and allow alcohol service
until 4:00am and food service around the clock for the week before the Inauguration, on holidays and on weekends
leading up to Memorial Day, Labor Day and, if occurring on Friday through Monday, New Year’s Day and Independence
Day.
Increase recovery of unpaid sales taxes through the credit card merchant payment reporting requirement. This would
allow OTR to hire 8 audit staff to follow up on a new report that the IRS is requiring. Beginning in 2013, the IRS
will share with OTR 1099-K forms which have been submitted by credit card companies and which report the total
credit card transactions for a merchant. The new reporting requirement is expected to increase compliance with the
sales tax collections.
Annual use tax returns. This proposal will require companies to file an annual use tax return. Companies are only
able to file use tax through the sales tax program so this would allow companies who do not have sales tax liability to
pay the use tax they owe on purchases made outside the District for goods and services that are used in the District.
OTR reports that this will increase use tax compliance.
Vendor sales tax collection. This line recognizes revenue from A19-0355, Vendor Sales Tax Collection And Remittance
Act Of 2012, recently passed by the Council and signed by the Mayor and which requires licensed street or
mobile vendors (these include food trucks, sidewalk food carts, and merchandise vendors) to collect sales taxes, and
each quarter, make a minimum sales tax payment of $375 to the Office of Tax and Revenue. Vendors that collect
more than $375 per quarter in sales taxes would be required to remit the full amount collected.
Income tax changes:
Index personal exemption and standard deduction from 2011. Under current law, the personal exemption and
standard deduction will increase by inflation from a base year 2007. This proposal would change the base year to 2011.
Delay out of state municipal bond tax. This line recognizes a reduction in revenue caused by a provision in the
FY 2012 Revised Budget Support Emergency Amendment Act that changed the effective tax year from 2012 to
2013. With this provision, the interest on out-of-state municipal bonds acquired after January 1, 2013, will be
taxable.
FY 2013 Proposed Budget and Financial Plan
Revenue
4-19