The District of Columbia (DC) Office of Tax and Revenue (OTR) provides an exemption from tax for organizations organized and operated exclusively for exempt purposes set forth in the D.C. Code Ann. section 47-2005(3)(C). However, the OTR does not automatically grant such an exemption even if an organization has a federal tax exemption from the IRS. Furthermore, such exemptions granted by the OTR are required to be updated and renewed every five years.

Due to regulations published in the D.C. Register (65 DCR 8411) on August 10, 2018, the OTR began requiring a renewal process for exemption certificates issued on or after August 15, 2018, which did not go into practice until early 2019. The OTR began requiring the renewal process for exemption certificates during 2019, which means organizations should be expecting to renew in the year 2024.

Annual five-year renewal – what to know

Exempt organizations are required to register with the DC OTR every five years to receive tax exemption. The DC OTR will provide a notice to taxpayers 180 days prior to expiration. If no action is taken, taxpayers will receive a second notice 30 days prior to expiration.

The OTR website shares that exempt organizations which have filed within the last five years may continue to use their old exemption certificates without an expiration date to be exempt from taxes.

If an organization’s tax exemption certificate does not include dates, the exemption will expire only upon notice from the OTR.

New exemption certificates will include dates moving forward.

What does CohnReznick think?

• Expect correspondence from the OTR:
  • Exempt organizations in DC should be on the lookout for correspondence from the OTR to renew their exempt status at least 30 days prior to the expiration date. The notice may come through mail or email. If either the mailing address of the organization or the contact persons of the organization have changed, taxpayers should go to the DC website to update so that correspondence does not get lost.
• Review your current exemption certificate:
  • If it has a date on it, you will know when it expires.
  • If not, watch for correspondence from the OTR.
• Review the helpful FAQ here. 
• Organizations can proactively renew their exemptions online at MyTax.DC.gov. OTR’s e-Service Unit is available for assistance to answer any questions at e-services.otr.dc.gov

_{Any advice contained in this communication, including attachments and enclosures, is not intended as a thorough, in-depth analysis of specific issues. Nor is it sufficient to avoid tax-related penalties. This has been prepared for information purposes and general guidance only and does not constitute legal or professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice specific to, among other things, your individual facts, circumstances and jurisdiction. No representation or warranty (express or implied) is made as to the accuracy or completeness of the information contained in this publication, and CohnReznick LLP, its partners, employees and agents accept no liability, and disclaim all responsibility, for the consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.}