The District of Columbia (DC) has a graduated individual income tax, with rates ranging from 4.00 percent to 10.75 percent. The District of Columbia has an 8.25 percent corporate income tax rate, a 6.00 percent state sales tax rate, and an average combined state and local sales tax rate of 6.00 percent. The District of Columbia has a 0.60 percent effective property tax rate on owner-occupied housing value. The District of Columbia has an estate tax. DC’s gas tax is 35.7 cents per gallon, and its cigarette excise tax is $5.07 per pack of 20 cigarettes.
The District of Columbia raises tax revenue primarily through individual income taxes (29.8 percent of total state and local tax revenue), property taxes (29.3 percent), and general sales taxes (18.7 percent). The District of Columbia collects $15,009 in tax collections per capita, carries $32,166 in debt per capita, and has a 118 percent funded ratio of public pension plans. The District of Columbia’s tax system ranks 48th overall on the 2026 State Tax Competitiveness Index.
Each tax code is a multifaceted system with many moving parts, and the District of Columbia is no exception. Use the tabs below to compare DC taxes with other states and to see how the District of Columbia raises tax revenue. You can also browse our tax maps, which are compiled from our annual publication, Facts & Figures 2026: How Does Your State Compare?
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The State Tax Competitiveness Index enables policymakers, taxpayers, and business leaders to gauge how their states’ tax systems compare. While there are many ways to show how much state governments collect in taxes, the Index evaluates how well states structure their tax systems and provides a road map for improvement.
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Facts & Figures serves as a one-stop state tax data resource that compares all 50 states on over 40 measures of tax rates, collections, burdens, and more.
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Individual income taxes are a major source of state government revenue, accounting for more than a third of state tax collections. How do income taxes compare in your state?
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Retail sales taxes are an essential part of most states’ revenue toolkits, responsible for nearly a quarter of combined state and local tax collections.
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Forty-four states levy a corporate income tax, with top rates ranging from a 2 percent flat rate in North Carolina to an 11.5 percent top marginal rate in New Jersey. Four states—Georgia, Nebraska, North Carolina, and Pennsylvania—reduced their corporate income tax rates effective January 1, 2026.
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Property taxes are the primary tool for financing local governments. While no taxpayers in high-tax jurisdictions will be celebrating their yearly payments, property taxes are largely rooted in the benefit principle of taxation: the people paying the property tax bills are most often the ones benefiting from the services.
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Imposing sales taxes on rental car companies’ fleet purchases, in addition to the sales and rental car excise taxes levied when those cars are rented, yields double taxation and causes harmful tax pyramiding.
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In addition to the federal estate tax, which has a top marginal rate of 40 percent, 12 states and the District of Columbia impose estate taxes, while five states levy inheritance taxes.
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Corporations in the United States pay federal corporate income taxes levied at a 21 percent rate. Forty-four states and DC also levy taxes on corporate income, with top marginal rates ranging from 2.5 percent in North Carolina to 11.5 percent in New Jersey.
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High property taxes levied not only on land but also on buildings and structures can discourage investment in infrastructure, which businesses would have to pay additional tax on.
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Applying the sales tax, a traditional broad-based consumption tax, is perfectly appropriate, but excessive targeted taxation of wireless services lacks the traditional justifications—a user-pays system or the internalization of social costs—for excise taxation, raising consumer costs and discouraging investment.
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Oral nicotine pouches have rapidly become a popular option for consumers who want nicotine without the harmful combustion and chemicals of traditional cigarettes. As these alternative nicotine products (ANPs) successfully draw smokers to non-combustible nicotine consumption, many states have scrambled to incorporate these new products into their tax regimes.
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California levies the highest tax on gasoline at 73.6 cents per gallon (cpg), followed by Illinois at 70.4 cpg and Indiana at 63.1 cpg.
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Privacy concerns are a primary driver of opposition to vehicle miles traveled (VMT) tax systems, but VMT taxes do not need to invade drivers’ privacy to efficiently fund the roads.
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As the market share of electric vehicles (EVs) on the road grows, the gas tax’s ability to fund road projects and decrease traffic congestion erodes. Both federal and state real tax revenue per vehicle mile traveled has been on a steady decline for decades, creating a fiscal gap for road expenditures even as the demand for road infrastructure improvements has grown.
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The highest state tax on cigarettes is levied by New York at $5.35 per pack of 20. The next highest tax jurisdiction is the District of Columbia at $5.07 per pack of cigarettes, followed closely by Maryland at $5.00 per pack, Rhode Island at $4.50 per pack, and Connecticut at $4.35 per pack.
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