--- title: "DC Tax Commission Plan Includes Services Tax on City Employers" id: "21749" type: "post" slug: "dc-tax-commission-plan-includes-services-tax-on-city-employers" published_at: "2014-02-18T20:16:35+00:00" modified_at: "2026-03-16T03:39:19+00:00" url: "https://associationsnow.com/2014/02/18/dc-tax-commission-plan-includes-services-tax-on-city-employers/" markdown_url: "https://associationsnow.com/2014/02/18/dc-tax-commission-plan-includes-services-tax-on-city-employers.md" excerpt: "The DC Tax Revision Commission presented its final plan to the DC Council to revamp the District’s tax code, including a new services tax on city businesses based on the number of people they employ." taxonomy_category: - "Advocacy" taxonomy_post_tag: - "AssociationsNow" - "Business" - "tax policy" - "Tax Reform" taxonomy_content_format: - "Article" taxonomy_role: - "Association CEO / Executive Director" taxonomy_persona: - "Executive Leadership" --- [Home](https://associationsnow.com/) » [Articles](https://associationsnow.com/format/article/) » DC Tax Commission Plan Includes Services Tax on City Employers After of months of hearings, testimony, and public deliberation, the DC Tax Revision Commission last week presented the DC Council its [final plan (opens in a new tab)](http://media.wix.com/ugd/ddda66_f34192a62b654606850ef05b223c7ae4.pdf) [PDF] to reform the city’s tax code. As expected, it contains a new services tax that would impose a $100 annual fee per employee on all city employers. Employers with fewer than four employees would be exempt. There would be no exemptions for lower-income workers employed by the organization, an option initially considered by the commission. Last fall, the [commission was directed by the council to reform the tax code](http://associationsnow.com/2013/10/dc-commission-considering-business-tax-on-all-employers/) to increase revenues and counter a negative perception of the city’s tax structure. The local services tax was one of 63 options the commission considered. In justifying the fee in its report, the commission explicitly noted that a “commuter tax” would not pass legal muster and said “the District is home to many nonprofits organizations, all of which are exempt from the District’s business income tax. … These limitations have forced the District to disproportionately shift its tax burden to a smaller base of residents and for-profit businesses.” The fee would apply to both for-profit and nonprofit employers and to employees regardless of their state of residence. ASAE met with the commission before the final report was drafted and [expressed concern with the proposal](http://associationsnow.com/2013/11/asae-opposes-dcs-option-36-in-tax-code-revisions/) on two fronts. First, ASAE argued that it was false to assume that the city’s associations do not contribute to the city’s infrastructure, noting that associations incorporated in DC are required to pay at least nine different taxes and fees. Second, ASAE said that such a fee, while nominal now, could be expanded to cover any budget shortfalls unrelated to the purpose of the fee, which the council has done in the past with other fees. In a [letter (opens in a new tab)](https://www.asaecenter.org/files/FileDownloads/PublicPolicy/ASAE%20Letter%20to%20DCTRC%20and%20COuncil%20on%20Option%20%2336.doc) to the commission last November, ASAE President and CEO John H. Graham IV, FASAE, CAE, noted the nontax economic contributions that associations make to the city, including economic development through employment and benefits for residents, as well as association educational meetings. “If the District ultimately assessed a ‘service’ tax on associations within the city, it would not only hurt its revenue stream long-term but completely misunderstand how much of a financial commitment associations already have made to the District,” Graham wrote. (iStock/Thinkstock) [Chris Vest, CAE](https://associationsnow.com/author/chris-vest-cae/) Chris Vest, CAE, is director of public policy at ASAE. [More articles by this author](https://associationsnow.com/author/chris-vest-cae/) Tags: [#Business](https://associationsnow.com/tag/business/) [#tax policy](https://associationsnow.com/tag/tax-policy/) [#Tax Reform](https://associationsnow.com/tag/tax-reform/) **Stay Informed** [Subscribe to our free newsletter](https://associationsnow.com/newsletter/) , *Associations Now Daily News*, to find out what’s happening in the association world every business day. ## You Might Like - [PodcastNavigating Tax Reform: Advocacy for Associations and NonprofitsDecember 19, 2024](https://associationsnow.com/2024/12/19/navigating-tax-reform-advocacy-for-associations-and-nonprofits/) - [VideoThe Career Moves Every Association Leader Needs Right NowSeptember 24, 2026](https://associationsnow.com/2026/09/24/the-career-moves-every-association-leader-needs-right-now/) - [VideoUrban Land Institute- Project Recovery: Rebuilding Los Angeles After the January 2025 WildfiresSeptember 24, 2026](https://associationsnow.com/2026/09/24/urban-land-institute-project-recovery-rebuilding-los-angeles-after-the-january-2025-wildfires/) - [VideoNCRA: Safeguarding Cancer Surveillance: An Advocacy Response to FY26 Budget ThreatsSeptember 24, 2026](https://associationsnow.com/2026/09/24/ncra-safeguarding-cancer-surveillance-an-advocacy-response-to-fy26-budget-threats/) ## Comments **Comments are for ASAE members.** [Learn more about comments on this site.](https://associationsnow.com/comments/) [Log in](https://associationsnow.com/login?redirect_to=https%3A%2F%2Fassociationsnow.com%2F2014%2F02%2F18%2Fdc-tax-commission-plan-includes-services-tax-on-city-employers%2F%23comments) to your member account or [join ASAE](https://my.asaecenter.org/select-a-membership-type/) !