*Note, this only applies to Action Network partners based in Washington, DC*
Previously, we (Action Squared) received an exemption from sales taxes as a DC-based Qualified High Technology Company, so no one in DC using our tools was subject to sales tax. That changed in August, when the District of Columbia Office of Tax and Revenue (OTR) announced that this exemption would terminate and, as of October 1, 2019, services provided by QHTCs (like Action Squared) are no longer exempt from sales and use tax.
So, short version: If your organization is based in Washington, DC and is a paid partner of Action Network, your payments to Action Network may now be subject to sales tax. The sales tax in Washington, DC is 6%, and we’re responsible for collecting that tax on your behalf and giving it to the DC government.
Your organization may still be exempt from paying sales tax, however. Most 501(c)(3) organizations qualify for a sales tax exemption, and exempt and nonprofit organizations must establish and maintain their District tax-exempt status. You can find more information on exemption and nonprofit organizations at the Office of Tax and Revenue website.
If your organization is exempt, please email Partners@ActionNetwork.org with a copy of your exemption form.
If you do not know if your organization is exempt, you will need to apply for an exemption by filing Form FR-164 (Application for Exemption) with the District of Columbia Office of Tax and Revenue. You can find the details on that process here. If your organization elects to apply for an exemption, please email Partners@ActionNetwork.org and let us know.
When we migrate payments over to our new system, we will also start collecting the DC Sales Tax from partners based in Washington, DC. More information will be available closer to the migration date.