First, you must submit an application for a Basic Business License (BBL) to the Department of Consumer and Regulatory Affairs (DCRA) in order to become a vendor in the District of Columbia. Any company conducting business in the District of Columbia, including vendors, must have a BBL. Both online and in-person applications for the BBL are accepted at the DCRA Business Center.
Filling out a BBL application, paying a fee, and submitting supporting paperwork like a lease agreement or proof of ownership of your business location and a certificate of occupancy are all necessary steps in the application procedure for a vendor’s license. You will get your vendor’s license after your application is accepted.
You must submit taxes with the Internal Revenue Service (IRS) and the District of Columbia Office of Tax and Revenue (OTR) if you run your business as a Limited Liability Company (LLC). The District of Columbia recognizes LLCs as pass-through entities, which implies that its members individually share in its profits and losses.
The Unincorporated Business Franchise Tax Return, or DC Form D-30, must be completed in order to file taxes for an LLC in the District of Columbia. A DC Form D-65, known as the Unincorporated Business Estimated Tax Payment Voucher, may also be required to be submitted. Pass-Through Entity Tax in Washington, D.C.
As was already mentioned, DC regards LLCs as pass-through businesses for taxation. A Pass-Through Entity Tax (PTET) is also in place in DC and it affects S corporations, limited liability companies, and partnerships. The PTET is a tax on the portion of income that is distributed to the owners by the entity. Taxation of Stipends in DC
Stipends are sums of money given to someone in exchange for services provided but not paid as salary or wages. As taxable income, stipends must be shown on your tax return. You must record and pay taxes on any stipends you receive in the District of Columbia on your DC tax return.
Owners of S corporations are not regarded as independent contractors. Instead, you are regarded as a member of the company’s staff and are entitled to a fair wage in exchange for the services you render. You must report the salary you get on your personal tax return since it is subject to payroll taxes.
In conclusion, applying for a Basic Business License from the DCRA is necessary to receive a vendor’s license in DC. LLCs based in the District of Columbia must file taxes with the IRS and OTR and are liable to the pass-through entity tax. Stipends must be included on your tax return since they constitute taxable income in DC. Last but not least, if you are a S corporation owner, you are regarded as an employee and are entitled to a fair wage.