DC Sales and Use Tax Protest — OAH / Refund Claim

DC SALES AND USE TAX PROTEST — OAH PETITION OR REFUND CLAIM

TABLE OF CONTENTS

1. Caption and Filing Information
2. Introduction and Statement of Timeliness
3. Statement of Facts
4. Issues Presented
5. Argument
6. Refund Claim (If Applicable)
7. Relief Requested
8. Reservation of Rights
9. Verification
10. Certificate of Service
11. DC Practice Notes
12. Sources and References

1. CAPTION AND FILING INFORMATION

DISTRICT OF COLUMBIA

OFFICE OF ADMINISTRATIVE HEARINGS

441 4th Street NW, Suite 450N, Washington, DC 20001

OAH Case No.: [________________________________] (assigned upon filing)

OTR Notice No.: [________________________________]

Notice Date: [__/__/____]

Tax Type: ☐ Sales Tax (FR-800) ☐ Use Tax ☐ Marketplace Facilitator Tax ☐ Streamlined Remote Seller

Tax Period(s) at Issue: [________________________________]

Filing Frequency: ☐ Monthly ☐ Quarterly ☐ Annual

Total Amount in Dispute: $[________________________________] (tax $[____]; penalty $[____]; interest $[____])

PETITION FOR HEARING AND PROTEST OF PROPOSED ASSESSMENT — SALES / USE TAX (D.C. Code §§ 47-4312, 47-2021)

2. INTRODUCTION AND STATEMENT OF TIMELINESS

Petitioner [TAXPAYER NAME] (the "Taxpayer"), by and through undersigned counsel, hereby files this Protest of the Proposed Assessment of Sales and/or Use Tax dated [__/__/____] (the "Notice") issued by the District of Columbia Office of Tax and Revenue ("OTR"), and petitions the Office of Administrative Hearings ("OAH") for a hearing pursuant to D.C. Code § 47-4312.

2.1. Timeliness. The Notice was sent on [__/__/____]. This Protest is filed within thirty (30) calendar days of that date as required by D.C. Code § 47-4312(a). Service is being made simultaneously on the Mayor through OTR's General Counsel.

2.2. Forum Election. Taxpayer elects OAH as the forum for adjudication of the proposed assessment, in lieu of pre-payment appeal to the Superior Court of the District of Columbia, Tax Division, under D.C. Code §§ 47-2021 and 47-3303.

2.3. Stay of Collection. Pursuant to D.C. Code § 47-4312(c), the timely filing of this Protest stays collection of the disputed deficiency, interest, and penalties pending OAH adjudication.

3. STATEMENT OF FACTS

3.1. Taxpayer. Taxpayer is [a District retailer / a remote seller / a marketplace facilitator / a marketplace seller] with a principal place of business at [ADDRESS], FEIN ending in [____], registered with OTR as Sales Tax Account No. [NUMBER].

3.2. Nature of Business. Taxpayer [describe business — e.g., operates an e-commerce platform selling tangible personal property; provides taxable services; operates a brick-and-mortar restaurant in DC].

3.3. Nexus / Registration Status. Taxpayer [is / is not / disputes that it is] subject to DC sales tax collection obligations because:

• ☐ Taxpayer maintains a physical presence in DC at [ADDRESS].
• ☐ Taxpayer's DC gross receipts exceeded $100,000 in [YEAR] (economic nexus per § 47-2202.01).
• ☐ Taxpayer made more than 200 DC retail transactions in [YEAR] (economic nexus).
• ☐ Taxpayer is a marketplace facilitator collecting on behalf of marketplace sellers under § 47-2202.01.
• ☐ Taxpayer disputes that any nexus or threshold has been met.

3.4. Returns Filed. Taxpayer filed Form FR-800 sales/use tax returns for [PERIOD(S)] reporting taxable sales of $[AMOUNT] and remitting tax of $[AMOUNT].

3.5. OTR Audit / Adjustment. On [__/__/____], OTR commenced a sales/use tax audit covering [PERIODS]. OTR issued [Information Document Requests / a Notice of Proposed Adjustment] on [DATES], to which Taxpayer responded on [DATES].

3.6. The Proposed Assessment. On [__/__/____], OTR issued the Notice proposing additional sales/use tax of $[AMOUNT], penalties of $[AMOUNT], and interest of $[AMOUNT], based on the following adjustments:

3.7. Substantive Background. [Describe the operative facts. For exemption disputes, identify each exemption certificate (Form OTR-368) and the underlying transaction. For nexus disputes, document gross receipts and transaction counts by year. For use-tax disputes, document where tangible personal property was first used and any tax paid to other jurisdictions.]

4. ISSUES PRESENTED

4.1. Whether Taxpayer is subject to DC sales tax collection obligations under D.C. Code §§ 47-2002 and 47-2202.01 for the periods at issue (nexus / economic threshold / marketplace facilitator status).

4.2. Whether the transactions reclassified by OTR are exempt from sales tax under [applicable exemption — e.g., resale exemption (§ 47-2005); sale for use in interstate commerce; nontaxable services not enumerated in § 47-2001(n)].

4.3. Whether the use-tax assessment is duplicative of sales tax already paid to [State / District / foreign jurisdiction], or otherwise barred by the credit provisions of D.C. Code § 47-2202.

4.4. Whether the imposition of penalties is supported by clear and convincing evidence and not subject to the reasonable-cause defense under D.C. Code § 47-4221.

4.5. Whether interest has been correctly computed under D.C. Code § 47-4201.

5. ARGUMENT

5.1. Burden of Proof.

OTR's proposed assessment is presumed correct, but the presumption is rebuttable upon Taxpayer's production of credible evidence. See D.C. Code § 47-4312; 1 DCMR § 2822. For exemption disputes, the taxpayer initially bears the burden of demonstrating exemption, but acceptance of a properly executed exemption certificate in good faith generally satisfies that burden.

5.2. Issue 1 — Nexus and the Wayfair Threshold.

Following South Dakota v. Wayfair, Inc., 138 S. Ct. 2080 (2018), DC enacted economic-nexus rules requiring remote sellers to collect sales tax only when they exceed $100,000 in DC gross receipts OR 200 separate DC retail transactions in the previous or current calendar year. See D.C. Code § 47-2202.01; OTR Notice 2019-01.

[Apply facts: identify the precise gross-receipts figures and transaction counts for each calendar year, show that Taxpayer either fell below the threshold or that OTR has miscounted. Distinguish marketplace-facilitated transactions (which the facilitator collects on) from direct sales.]

5.3. Issue 2 — Exemption.

[Develop exemption argument. For the resale exemption, attach the Form OTR-368 certificates and demonstrate that the buyer in fact resold the property. Cite 9 DCMR Chapter 4 (Sales and Use Tax) and any applicable OTR rulings.]

5.4. Issue 3 — Use-Tax Credit and Duplication.

D.C. Code § 47-2202(a) imposes use tax on tangible personal property used or stored in the District but credits sales or use tax already paid to another jurisdiction at a rate equal to or greater than the DC rate. [Apply credit; cite specific transactions.]

5.5. Issue 4 — Marketplace Facilitator Defense.

If Taxpayer is a marketplace seller, marketplace-facilitated transactions are statutorily collected and remitted by the facilitator under D.C. Code § 47-2202.01 (effective April 1, 2019), and Taxpayer is not separately liable for those transactions. [Identify each facilitator and the transactions covered.]

5.6. Penalty Mitigation — Reasonable Cause.

Even if any deficiency is sustained, all penalties should be abated under D.C. Code § 47-4221 because Taxpayer acted with reasonable cause and in good faith based on [reliance on professional advice / contemporaneous exemption certificates / pre-Wayfair industry practice / good-faith ambiguity in OTR guidance].

6. REFUND CLAIM (IF APPLICABLE)

6.1. Pursuant to D.C. Code § 47-3310, Taxpayer hereby claims a refund of $[AMOUNT] in sales and/or use tax overpaid for the period [__/__/____] through [__/__/____].

6.2. Timeliness. This refund claim is filed within the limitations period set forth in D.C. Code § 47-3310 — [2 years from the date of payment / 3 years from the date the return was filed], whichever applies — as the original payment(s) were made on [__/__/____].

6.3. Grounds for Refund.

• [Ground 1 — e.g., tax was collected on exempt resale transactions];
• [Ground 2 — e.g., tax was double-collected by the marketplace facilitator and the marketplace seller];
• [Ground 3 — e.g., Taxpayer is below DC's economic-nexus threshold and was not required to collect].

6.4. Customer Refunds. [If applicable: confirm that any tax paid by customers has been refunded to those customers, as required by OTR practice for retailer refund claims.]

6.5. Interest on Overpayment. Pursuant to D.C. Code § 47-3310(c), interest on the overpayment accrues at the statutory rate from the date of payment until the date of refund.

6.6. Appeal of Denial. If OTR denies this claim in whole or in part, Taxpayer reserves the right to appeal to the Superior Court Tax Division under D.C. Code § 47-2021 within six (6) months of the denial, or after the expiration of six months from filing if no decision has issued (§ 47-3310(b)).

7. RELIEF REQUESTED

WHEREFORE, Taxpayer respectfully requests that OAH (and/or OTR with respect to any refund claim):

• A. Schedule a hearing pursuant to D.C. Code § 47-4312 and 1 DCMR Chapter 28;
• B. Cancel or substantially reduce the Proposed Assessment dated [DATE], Notice No. [NUMBER];
• C. Allow the refund claim of $[AMOUNT] under D.C. Code § 47-3310, with statutory interest;
• D. Abate all penalties and recompute interest accordingly;
• E. Order OTR to issue a corrected Notice and/or refund check consistent with the OAH Final Order; and
• F. Grant such other relief as may be just and proper.

8. RESERVATION OF RIGHTS

8.1. Taxpayer reserves the right to amend or supplement this Protest, raise additional issues, and file additional motions as permitted by 1 DCMR Chapter 28.

8.2. Taxpayer reserves all rights to judicial review by the Superior Court of the District of Columbia, Tax Division, under D.C. Code §§ 47-2021 and 47-3303, and by the District of Columbia Court of Appeals under D.C. Code § 2-1831.16.

8.3. Taxpayer reserves all constitutional defenses, including the Commerce Clause and Due Process Clause limitations on state taxation of remote sellers, as confirmed (and constrained) by South Dakota v. Wayfair, Inc.

8.4. Nothing in this Protest constitutes a waiver of any right, claim, or defense, including statute-of-limitations or jurisdictional defenses.

9. VERIFICATION

DISTRICT OF COLUMBIA

I, [TAXPAYER NAME / AUTHORIZED OFFICER], declare under penalty of perjury under the laws of the District of Columbia that I have read the foregoing Protest and that the factual statements contained herein are true and correct to the best of my knowledge, information, and belief.

Date: [__/__/____]

[________________________________]

[TAXPAYER NAME / TITLE]

Date: [__/__/____]

Respectfully submitted,

[LAW FIRM NAME]

By: [________________________________]

[ATTORNEY NAME], DC Bar No. [####]

Counsel for Petitioner

[STREET ADDRESS]

[CITY, STATE ZIP]

Telephone: [NUMBER]

Email: [EMAIL]

10. CERTIFICATE OF SERVICE

I hereby certify that on [__/__/____], a true and correct copy of the foregoing PETITION FOR HEARING AND PROTEST OF PROPOSED ASSESSMENT — SALES / USE TAX was served upon the following by [first-class U.S. mail / certified mail, return receipt requested / electronic service via the OAH e-filing portal]:

Office of the General Counsel
District of Columbia Office of Tax and Revenue
1101 4th Street SW, Suite 750W
Washington, DC 20024

[________________________________]

[ATTORNEY NAME]

11. DC PRACTICE NOTES

• Sales tax rates. General sales tax rate is 6% under D.C. Code § 47-2002. Specialty rates (verify current): 8% on soft drinks; 10% on prepared food and alcoholic beverages for on-premises consumption; 10.25% on rental vehicles; 15.95% on hotel/transient lodging; 18% on parking. Streamlined remote sellers and marketplace facilitators apply the destination rate.
• Use tax. D.C. Code § 47-2202 imposes use tax at the same rate on tangible personal property purchased outside DC and used or stored in DC. A credit is allowed for sales/use tax properly paid to another jurisdiction at an equal or higher rate.
• Wayfair / economic nexus. Effective January 1, 2019, remote sellers must register and collect if (i) DC gross receipts exceed $100,000, OR (ii) DC retail transactions exceed 200, in the previous or current calendar year. Marketplace facilitator collection became effective April 1, 2019. See D.C. Code § 47-2202.01; OTR Notice 2019-01.
• Marketplace facilitator vs. seller. The facilitator is the statutory collector for marketplace-facilitated transactions. A marketplace seller's direct (non-marketplace) sales count separately toward its own nexus thresholds.
• Two-track appeal. Sales/use tax assessments may be challenged via (i) 30-day OAH protest (D.C. Code § 47-4312, no pre-payment), or (ii) 6-month pre-pay appeal to the Superior Court Tax Division (D.C. Code §§ 47-2021, 47-3303). The election is generally exclusive.
• Refund claims. D.C. Code § 47-3310 governs sales/use tax refund claims. Time limits: 3 years from filing or 2 years from payment, whichever is later (verify against OTR guidance for the specific tax type). Denials are appealable to the Superior Court Tax Division within 6 months under § 47-2021. For retailer refunds of tax collected from customers, OTR generally requires that the retailer first refund the customer (or post a bond to do so).
• Interest. Pre-judgment interest on overpayments at the statutory rate (6% per annum historically; verify current rate under § 47-3310(c)). Deficiency interest accrues at the rate set under § 47-4201.
• Recordkeeping. D.C. Code § 47-4310 and 9 DCMR Chapter 4 require retention of exemption certificates (Form OTR-368) and transaction records sufficient to verify the return. Best practice: retain 7 years.
• Confidentiality. D.C. Code § 47-2018 imposes confidentiality on sales tax return information held by OTR officers, employees, and contractors, with criminal penalties for unauthorized disclosure.
• Tax liens. A final, unprotested sales tax assessment becomes a lien under D.C. Code § 47-4421. A timely OAH protest avoids finality.

12. SOURCES AND REFERENCES

• D.C. Code § 47-2002 (Imposition of sales tax) — https://code.dccouncil.gov/us/dc/council/code/sections/47-2002
• D.C. Code § 47-2018 (Secrecy of returns) — https://code.dccouncil.gov/us/dc/council/code/sections/47-2018
• D.C. Code § 47-2021 (Sales tax appeals) — https://code.dccouncil.gov/us/dc/council/code/sections/47-2021.html
• D.C. Code § 47-2202 (Use tax) — https://code.dccouncil.gov/us/dc/council/code/sections/47-2202
• D.C. Code § 47-2202.01 (Marketplace facilitator) — https://code.dccouncil.gov/us/dc/council/code/sections/47-2202.01
• D.C. Code § 47-3303 (Superior Court appeal) — https://code.dccouncil.gov/us/dc/council/code/sections/47-3303
• D.C. Code § 47-3310 (Refund claims) — https://code.dccouncil.gov/us/dc/council/code/sections/47-3310
• D.C. Code § 47-4312 (Protest of assessment) — https://code.dccouncil.gov/us/dc/council/code/sections/47-4312
• D.C. Code § 47-4421 (Lien for taxes) — https://code.dccouncil.gov/us/dc/council/code/sections/47-4421
• South Dakota v. Wayfair, Inc., 138 S. Ct. 2080 (2018)
• DC Office of Tax and Revenue — Sales and Use Tax FAQs — https://otr.cfo.dc.gov/page/sales-and-use-tax-faqs
• DC Office of Tax and Revenue — Taxpayer Rights, Appeals and Reconsiderations — https://otr.cfo.dc.gov/page/taxpayer-rights-appeals-and-reconsiderations
• DC Office of Administrative Hearings — https://oah.dc.gov/
• DC Superior Court Tax Division — https://www.dccourts.gov/superior-court/tax-division
• 9 DCMR Chapter 4 (Sales and Use Tax Regulations)

Disclaimer: This template is provided for informational purposes only and does not constitute legal advice. An attorney licensed in the District of Columbia must review and customize this document before filing. Sales/use tax statutes, OTR economic-nexus thresholds, marketplace-facilitator rules, and refund procedures change frequently — verify all citations, rates, and dollar thresholds independently before use.