On June 24, the Council passed the Budget Support Act, which included a substantial package of tax reforms that will benefit most District businesses and residents as they are phased in over the next few years. How much can your business expect to save each year, once the tax cuts are fully implemented? The chart below will show you.
* The Budget Support Act as passed by the Council will lead to a 17% reduction in the District’s business franchise tax – from 9.975% to 8.25%. On January 1, 2015 the rate will drop to 9.4%. Beginning January 1, 2016, additional decreases in the rate (in 0.2% to 0.25% increments) will be triggered based on revenue growth realized after each fiscal year’s budget is approved. The projected annual franchise tax savings shown in the chart above are based upon a fully implemented decrease in the business franchise tax rate to 8.25%, which is anticipated in the next 3 to 5 years.