DC Personal Property Tax: Exemption, Form FP-31, and Deadlines

If your business owns tangible property used in the District of Columbia, the DC personal property tax applies at $3.40 per $100 of assessed value above a $225,000 exemption, reported on Form FP-31 and filed electronically through MyTax.DC.gov by July 31 each year.¹ Even if your property falls below the exemption and you owe nothing, you still have to file.

Who Has to File

The tax reaches any individual, corporation, partnership, trust, estate, or other entity that owns tangible personal property used in a trade or business within the District.¹ “Any business” is broad on purpose. A sole proprietor consulting from a home office with a laptop and a desk has reportable property. So does a nonprofit, unless it has a certificate of exemption on file (more on that below).

Taxable items include office furniture, computers, printers, manufacturing equipment, restaurant fixtures, construction machinery, signage, and professional tools. One item often missed: computer software is explicitly included in the District’s definition of tangible personal property, which is unusual compared to jurisdictions that treat software as intangible.²

What falls outside the tax: personal belongings kept in your home for private use, since the statute limits taxable property to items used or held for use in a business, activity, or occupation.² Motor vehicles and trailers registered with DC under the standard vehicle registration system are also exempt, because they are already subject to registration fees. Special equipment mounted on a vehicle that is not primarily used for transporting people or goods, such as a crane on a truck bed, is taxed separately as personal property.³

Leased Equipment

When equipment is leased, the filing obligation falls on the owner, not the business using it. The FP-31 instructions require filing by any entity that owns tangible personal property “held for rent or lease or similar business arrangement with third parties, government agencies or non-profit entities.”⁴ If you lease a copier from a national equipment company, the leasing company reports and pays the tax on it. Own the copier yourself and lease only the office space? Then it’s on your return.

Nonprofits

Organizations with 501(c)(3) status that have obtained a certificate of exemption from the DC Office of Tax and Revenue by filing Form FR-164 through MyTax.DC.gov are exempt from personal property tax. Property used in activities generating unrelated business income under IRC Section 511 remains taxable even if the organization otherwise qualifies.⁴

The $225,000 Exemption

The District only taxes personal property value that exceeds $225,000. A business with $300,000 in assessed personal property pays tax on $75,000.¹ Most small businesses with modest furniture and equipment end up owing nothing.

The exemption eliminates the tax, not the return. You still file Form FP-31 and report your property every year, regardless of value.

How the District Values Your Property

The valuation date is July 1. Whatever you own or hold in trust on that date is what you report for the tax year, which runs July 1 through the following June 30.² You enter the original cost of each item and apply the District’s prescribed depreciation rates to arrive at a current taxable value.

Each asset falls into a category with a fixed annual depreciation rate and a cap on total depreciation. Most assets cannot be depreciated below 25% of their original cost (a 75% maximum), while qualified technological equipment can be depreciated down to 10% of original cost (a 90% cap).⁵ The main categories:

Category A, 10% per year over a 10-year life: office furniture, restaurant equipment, hotel fixtures, banking equipment, medical and dental office equipment, printing machinery, signs, solar panels, and most general commercial fixtures.
Category B, 6.67% per year over a 15-year life: longer-lived items like transmitting towers, fiber optic cables, satellite dishes, safes, pianos and organs, and watercraft.
Category C, 12.5% per year over an 8-year life: construction equipment, car wash equipment, and building and lawn maintenance equipment.

Technological equipment, meaning computers, servers, and networking hardware, depreciates on its own faster schedule with the higher 90% cap. The FP-31 instructions each year carry the full itemized list. Property that is fully depreciated but still in use must still appear on your return at its minimum value floor.

Calculating the Tax

The rate is $3.40 for every $100 of taxable personal property value above the $225,000 exemption.¹ If your total depreciated personal property comes to $400,000, subtract the $225,000 exemption for $175,000 in taxable value, then multiply by 0.034. The tax is $5,950.

Filing Form FP-31

Form FP-31 must be filed electronically through MyTax.DC.gov. The District no longer prints or mails paper booklets.⁵ You’ll need a taxpayer identification number: an FEIN, SSN, ITIN, or PTIN depending on your entity type.

The return requires a detailed schedule of every tangible asset, with acquisition date, original cost, and depreciation category. The system applies the rates to produce your total taxable value. You also report property disposed of during the prior year so it comes off your account, and you list fully depreciated property still in use. A running inventory kept throughout the year, with digital copies of purchase invoices and disposal records, is much easier than reconstructing everything in July.

Payment is made by ACH debit or credit card through MyTax.DC.gov at the time of filing.⁶ Save the confirmation number or email receipt as proof of filing and payment.

Deadline, Extensions, and Penalties

The filing window opens July 1 and closes before August 1, making July 31 the effective deadline. The full tax is due at the time you file; there is no installment option.⁷

If you need more time, you can request an extension in writing before August 1, but you must include payment of the tax with the request. The maximum extension is three months past July 31, so the latest possible filing date is October 31.⁷ An extension to file is not an extension to pay.

Miss the deadline and the charges stack up:

Late filing or payment penalty of 5% of unpaid tax per month or partial month, up to 25%.
Interest at 10% per year, compounded daily, on any unpaid balance.⁸
A one-time collection fee of 10% of the tax balance if it remains unpaid 90 days after a notice of enforcement.
Negligence penalty of 20% of any underpayment caused by failure to make a reasonable attempt to comply, including failure to keep adequate records.
Valuation misstatement penalty of 20% of the underpayment if the correct value is 200% or more of what you reported, rising to 40% if the correct value is 400% or more of what you reported.

The negligence and valuation penalties are the ones that punish sloppy reporting hardest. Thorough acquisition records are the simplest defense.

Disputing an Assessment

If the Office of Tax and Revenue adjusts your reported values upward, or you believe an error was made in assessing your property, start by contacting OTR through MyTax.DC.gov or by phone to discuss the discrepancy. Personal property tax disputes are handled administratively through OTR rather than through a separate appeals commission. Bring documentation supporting your reported values: original purchase invoices, appraisals, and records of disposed assets. If informal resolution fails, you may need to pursue the matter through the DC Office of Administrative Hearings or consult a tax professional familiar with District procedures.

1
D.C. Law Library. District of Columbia Code 47-1522 – Levy of Annual Tax on Personal Property
2
D.C. Law Library. District of Columbia Code 47-1521 – Definitions
3
D.C. Law Library. District of Columbia Code 47-1508 – Exemptions
4
District of Columbia Office of the Chief Financial Officer. FP-31 District of Columbia Personal Property Tax Instructions
5
Office of the Chief Financial Officer. FP-31 District of Columbia Personal Property Tax Instructions
6
District of Columbia Office of Tax and Revenue. How to File a Personal Property Tax Return (FP-31)
7
D.C. Law Library. District of Columbia Code 47-1524 – Form of Tax Return; Filing; Extensions
8
D.C. Law Library. District of Columbia Code 47-4201 – Interest on Underpayments