From the Forum – Do I have to pay sales tax on my rent?

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Do I have to pay sales tax on my rent?

“I have rented in DC for years in different places, but have never experienced any landlord to make me pay sales tax on top of my rent. Can this be true? It seems a topic that has not been discussed.”

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21 Comment

  • No, you don’t pay sales tax on top of your rent. Your landlord, however, must pay taxes on the income s/he makes from renting a unit to you (the taxable amount for him is the delta between what you pay and what his costs are – mortgage, repairs, marketing, etc).
    Perhaps your landlord is trying to pass of their own tax liability to you?

    • +1. Sounds like the landlord is trying to pass on the tax burden to you. But honestly, any “tax” he or she collects from you is in actuality just more income which would also be taxable. Either they’re completely shady or an idiot (or both).

  • lol.

    That’s a new one!

  • Ya been had!
    Ya been took!
    Ya been hoodwinked!
    Led astray!
    Run amok!

  • Find a new landlord asap. This person is SHADY

    • Yup. The landlord should be factoring in his expected tax liability into the rent he/she charges.
      This person sounds like a shady amateur.

  • Ask to see the documentation showing this sales tax has been remitted to the city.

    • Except as others have pointed out, it isn’t sales tax the landlord would owe. This isn’t a sale or rendering of services. It is income for the landlord and they would be subject to income tax. That said, no landlord with any sense passes that one because it simply becomes more income on which they are taxed.

      • That was my point. Perhaps I should have said “sales tax” in quotes because it clearly isn’t a taxable sale and clearly isn’t being remitted as it would be if the landlord were just mistaken.

  • Yes, you do. To me. Send me an email with your details, bank info, social security number, and authorization to withdraw your tax liability on a monthly basis. While at it, you can also authorize voluntary donations to contribute to my fun fund.

  • Report this shady-ass character to the city.

  • If you’ve ever rented a tool, a rental car, or even a hotel room, sales tax is usually an additional charge on top of the daily rental price. I’ve never heard of it for housing rentals though. It sounds like your landlord is just trying to raise the actual cost while still only advertising the rental cost. I don’t know about the legality of it, but I wouldn’t be surprised if it’s legal based in my experience with long term hotel stays.

    • It’s very illegal to levy a tax that’s fake.

    • Hotel tax is a real thing. “Sales tax” on regular monthly rental accommodation is not.

    • I’m not a tax lawyer, so I don’t know the sales tax rules and whether or not it is legal. I agree with everyone else though, it sounds fishy, but I don’ know. In the end, my guess is that what the landlord calls it and how they break it down may not matter, the renter only owes what the lease states. And most important, is that rent reasonable or not?

  • In the District, sales tax does not apply to rent. The relevant statue is D.C. Code sec.47-2002:

    “a. A tax is imposed upon all vendors for the privilege of selling at retail certain tangible personal property and for the privilege of selling certain selected services (defined as “retail sale” and “sale at retail” in this chapter). The rate of such tax shall be 6% of the gross receipts from sales of or charges for such tangible personal property and services…”

  • Technically the terms of your lease are going to control. If your lease says $1000/mo then you owe $1000 a month, period. If your lease says $1000 + 5% tax then I would say you owe 1050. If it says $1000/month plus applicable taxes then you owe $1000 as there are no applicable taxes.

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