Selling a business in District of Columbia: what the state takes (2026)
District of Columbia’s top individual income tax rate is 10.75%. Here is what an owner selling company stock pays, with 2026 rules from official sources and worked examples at $10 million, $25 million and $50 million.
- 10.75%
- Top District of Columbia income tax rate (2026)
- $2,687,500
- State tax on a $25M long-term gain
- 34.5%
- Combined federal and state rate on $25M
- 3 of 51
- Rank by total tax on $25M (1 = highest)
How District of Columbia taxes a business sale
- Income tax
- Top rate 10.75%: Over $1,000,000 (all filers).
- Long-term capital gains
- Capital gains are taxed as ordinary income with no exclusion. Income over $1M is taxed at 10.75% (9.75% from $500k to $1M).
- Relief that applies only in some sales
- None current. DC's reduced capital gains rate for Qualified High Technology Company investments (DC Code 47-1817.07 and 47-1817.07a) was repealed by D.C. Law 23-149 (2020).
- Entity-level taxes
- DC does not recognize S corporation status. S corporations are 'corporations' under DC Code 47-1801.04(10) and pay the 8.25% corporate franchise tax, and unincorporated businesses pay an 8.25% unincorporated business franchise tax. Gain on an asset sale can therefore be taxed at the entity level before it reaches the owner.
Three worked examples
| Long-term gain | $10,000,000 | $25,000,000 | $50,000,000 |
|---|---|---|---|
| Federal capital gains tax (20%) | $2,000,000 | $5,000,000 | $10,000,000 |
| Net investment income tax (3.8%) | $380,000 | $950,000 | $1,900,000 |
| District of Columbia tax | $1,075,000 | $2,687,500 | $5,375,000 |
| Total tax | $3,455,000 | $8,637,500 | $17,275,000 |
| Effective combined rate | 34.55% | 34.55% | 34.55% |
| Net proceeds after tax | $6,545,000 | $16,362,500 | $32,725,000 |
| Extra tax versus Texas | $1,075,000 | $2,687,500 | $5,375,000 |
Seller’s tax calculator
Estimate federal and state tax on a stock sale and what is left before fees and debt.
- Long-term capital gain
- $25,000,000
- Federal capital gains tax (20%)
- $5,000,000
- Net investment income tax (3.8%)
- $950,000
- District of Columbia tax
- $2,687,500
- Taxable gain at 10.75%
- $2,687,500
- Total tax
- $8,637,500
- Effective rate on the gain
- 34.55%
- Net proceeds after tax
- $16,362,500
Illustration, not tax advice. Assumes a resident individual, the whole gain long-term, top marginal rates, no state credits, installment terms, QSBS exclusion or other planning, and no local taxes. Net proceeds are before transaction fees, debt repayment, escrows and earn-outs. Rates are for tax year 2026 where published; see the methodology.
Compare with other states
Common comparisons
- California37.1% combined, $15.72M net
- New York34.1% combined, $16.48M net
- Texas23.8% combined, $19.05M net
- Florida23.8% combined, $19.05M net
- Nevada23.8% combined, $19.05M net
- Washington33.5% combined, $16.63M net
- Tennessee23.8% combined, $19.05M net
Methodology and sources
District of Columbia figures are for tax year 2026. The DC Code 47-1806.03(a)(11) schedule applies to taxable years beginning after Dec 31, 2021 and is not indexed, so it applies to 2026. The examples assume a resident individual selling privately held stock for a long-term gain equal to the sale price (zero basis), with every dollar taxed at the top marginal rates, the federal 20% capital gains rate and the 3.8% net investment income tax, and no planning, credits or local taxes. Full assumptions are in the report methodology.
All 50 states and DC with source URLs.
- 1DC OTR individual and fiduciary income tax rates
- 2DC Code 47-1806.03 (rate schedule)
- 3DC Code 47-1817.07 (QHTC capital gains provision, repealed)
- 4DC Code 47-1801.04 (definition of corporation includes S corporations)
- 5DC Code 47-1807.02 (corporate franchise tax 8.25%)
- 6DC Code 47-1808.03 (unincorporated business franchise tax 8.25%)
- 7Tax Foundation, State Individual Income Tax Rates and Brackets, 2026. Secondary source
Data last updated October 26, 2026.
Cite this research
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Citation
Laurent Capital Research, “The Seller’s Tax Map: What Selling a Business Costs in Every State (2026): District of Columbia,” 2026, https://laurent.capital/research/seller-tax-map/district-of-columbiaLink (HTML)
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