D.C. Mun. Regs. tit. 9, r. 9-121

Current through Register 71, No. 45, November 7, 2024

Rule 9-121 - FRANCHISE TAX

121.1

As defined in Title 1 of the Act, the words "trade or business" include the engaging in or carrying on of any trade, business, profession, vocation, vocation, calling, or commercial activity in the District, except as otherwise provided in this chapter.

121.2

The Act provides that the words "trade or business" shall not include, for the purposes of the Act, any of the following:

(a) Sales of tangible personal property whereby title to the property passes within or outside the District by a corporation, financial institution, or unincorporated business which does not physically have or maintain an office, warehouse, or other place of business in the District, and which has no officer, representative, or agent with an office or other place of business in the District during the taxable year;

(b) The words "agent" and "representative," as used in § 121.2(a), shall not include any independent broker engaged independently in regularly soliciting orders in the District for sellers and who holds himself or herself out as such; and

(c) While it is not the purpose of this chapter to give specific definitions which may cover most conceivable kinds of employment or activity which come within the statutory definition of "trade or business," the following general definitions are important:

(1) A "business" is that which occupies the time, attention, and labor of persons for the purpose of livelihood or profit. Engaging in business involves the investment of time or capital, or both, on the future outcome of the enterprise, whether it be successful or unsuccessful; and

(2) "Commerce" consists of intercourse and traffic, and includes the transportation of persons and property as well as the purchase, sale, and exchange of commodities.

121.3

A corporation, financial institution, or unincorporated business may derive income from the sale of real property located in the District, from services performed in the District, from rental of real or personal property located in the District, from investments made or other capital employed in the District, and in other ways, and thus be liable for the tax upon that income, even though it maintains no office or other place of business in the District.

121.4

Income from sales of tangible personal property shall be taxable (except as set forth in § 121.1) if the taxpayer has or maintains an office, warehouse, or other place of business in the District, or has an officer, agent, or representative having an office or other place of business in the District during the taxable year.

D.C. Mun. Regs. tit. 9, r. 9-121

Commissioners' Order 56-1431 effective July 24, 1956, 16 DCRR §§ 309.1 and 309.3; as amended by the Third Amendment to the Revenue Act of 1975 Act, D.C. Law 1-61, 22 DCR 4383 (February 12, 1976); and by Final Rulemaking published at 28 DCR 5393 (December 18, 1981), incorporating text of Proposed Rulemaking published at 28 DCR 4112 (September 18, 1981)