DC Exemptions May Be At Risk

This alert may impact your organization or any organization you are affiliate with that has an exemption from franchise, sales, or property taxes in the District of Columbia.

The District of Columbia’s Office of Tax and Revenue has issued a notice announcing that all franchise, sales, and personal property tax exemptions will now have a 5 year renewal requirement. This impacts not only new nonprofits filing for exemption in the District for the first time, but also those that received their tax exemptions years ago. Many of our clients have been receiving letters from the District notifying them of this change and informing them that another notice will be sent 30 days prior the expiration date. Due to the length of time necessary to complete this renewal process, including the need for requesting an IRS Affirmation Letter related to their federal tax exemption, we recommend starting on this renewal as soon as possible.

We’ve developed a process to assist you through this change using the following steps:

1. Create a MyTax DC online account.
2. Sign and return the Power of Attorney provided by your Marcum team contact.
3. Approve our third party access request to your MyTax DC online account.
4. Marcum will request, on your behalf, an IRS Affirmation Letter of your tax-exempt status with the IRS. In some cases, this request can take the IRS several months to process.
5. Your Marcum team will monitor your renewal date and complete the online renewal on your behalf. When the renewal is being processed, we will follow up if any additional documentation is needed to process the renewal request.

Your Marcum contact will be reaching out to schedule a call to go through this and answer any questions you might have. If we can be of additional assistance, or if you have received one of the 30 day notices, please reach out to your Marcum contact directly.