802 LOCAL BUSINESS ENTERPRISE REQUIREMENTS

802.1 An applicant for certification as a local business enterprise must demonstrate, inter alia, that the principal office of the business enterprise is located in the District of Columbia. To be considered the principal office:

(a) The space must be a dedicated suite, office, or desk that the applicant owns, or that the applicant leases for a minimum of twelve (12) months;

(b) To the extent that the space is an office space that the applicant shares with other businesses:

(1) There must be a clear separation between the businesses;

(2) The applicant must have a dedicated office or desk for exclusive use of the business seeking certification;

(3) Assets and business functions of the business shall not be commingled with other businesses; and

(4) The lease or addendum to the membership agreement must identify the desk or office number the applicant is occupying; and

(c) Legal documents, and if applicable, the website, insignia, signs, printed material, business cards, and letterhead where the principal office or headquarters is identified, must indicate that the office, located in the District of Columbia, is the applicant's principal office.

802.2 In determining the principal office for the business enterprise, the Department may also consider:

(a) The totality of the business activities in which routine and essential business functions occur such as the following:

(1) Bookkeeping and other recordkeeping;

(2) Payroll maintenance;

(3) Receipt of business telephone calls;

(4) Receipt of correspondence and bills;

1. (5) Storing of books and records; and
2. (6) Directing, controlling and coordinating activities and policies by officers, principals and managers; and
3. (b) The number of vehicles owned by the applicant that are registered in jurisdictions outside of the District of Columbia in comparison to the number of such vehicles registered in the District of Columbia. The Department reserves the right to request copies of the vehicle registrations for all company-owned vehicles.802.3 - (a) An applicant for certification as a local business enterprise must also demonstrate that its chief executive officer and the highest-level managerial employees perform their managerial functions in their principal office located in the District.
4. (b) The principal office in the District must be a dedicated space with size and functionality that enables the chief executive officer and highest-level managerial employees to perform their managerial functions.802.4 The Department will rely on an applicant's filed District and federal taxes, among other things, to calculate the applicant's gross receipts and to determine whether the applicant meets the requirements of Section 2331(2A)(C) and (D) of the Act (D.C. Official Code § 2-218.31(2A)(C) and (D)).- (a) Pursuant to Section 2331(2A)(C) of the Act (D.C. Official Code § 2-218.31(2A)(C)), in determining whether the applicant has more than fifty percent (50%) of the assets of the business enterprise located in the District, the Department will consider:
5. (1) The location of fixed assets, including property, plant, and equipment, and exclude bank accounts, accounts receivable, and intangible assets, such as goodwill, patents, copyrights, or trademarks; and
6. (2) The number of vehicles owned by the applicant and used for the business enterprise that are registered in jurisdictions inside and outside of the District of Columbia.
7. (b) The Department will evaluate whether the applicant meets the local business enterprise category pursuant to Section 2331(2A)(C) of the Act (D.C. Official Code § 2-218.31(2A)(C)) by relying on the following:

(1) The applicant's detailed list of fixed assets in the District to include:

(A) Type, quantity, location and value of equipment owned;

(B) Real estate properties and corresponding recent property tax bills; and

(C) List of vehicles, year, make and model and Kelley Blue Book® values;

(2) The Department's site visit(s) to verify fixed assets located in the District; and

(3) The Department may require an audited or certified financial statement by an independent auditor that attests to the statement's compliance with generally accepted accounting principles.

SOURCE: Final Rulemaking published at 39 DCR 9052 (December 4, 1992); as amended by Final Rulemaking published at 56 DCR 8439 (October 23, 2009), incorporating by reference text of Proposed Rulemaking published at 56 DCR 5622, 5623 (July 10, 2009); as amended by Final Rulemaking published at 70 DCR 010970 (August 11, 2023).