Tax & Accounting Blog

District of Columbia Issues Guidance on Sales Tax on Armored Car, Private Investigation, and Security Services

Indirect Tax, ONESOURCE, Sales and Use Tax September 8, 2011

As was mentioned in an earlier post effective October 1, 2011, the District of Columbia sales and use tax will apply to sales of armored car, private investigation, and security services at the general 6% rate. These changes were enacted as part of the budget support legislation.

Guidance issued by the Office of Tax and Revenue explains how to apply the tax to these services. Service providers who are not currently registered to collect sales and use tax must either register online on the Office of Tax and Revenue website or file a Form FR-500. ( Dist. of Columbia Revenue Notice 2011-03, 09/01/2011; News Release, Office of Tax and Revenue, 09/02/2011 .)

The District tax is patterned after the Maryland sales and use tax imposed on armored car, private investigation, and security services. Businesses providing these services in the District, who have been collecting the Maryland tax, can apply Maryland’s existing rules and guidance to determine transactions taxable in the District on and after October 1.