100 GENERAL PROVISIONS

100.1 The provisions of this chapter are adopted under authority of § 1 of Title 16 of the 'District of Columbia Income and Franchise Tax Act of 1947,' 61 Stat. 359 (Also referred to in this chapter as the 'Act'), as amended by § 601 of Title 6 of the 'District of Columbia Revenue Act of 1956,' 70 Stat. 71 (D.C. Code §§ 47-1816.1 and 47-1816.2).100.2 The provisions of this chapter shall be in effect with respect to taxable years commencing on and after January 1, 1956.100.3 References in this chapter to titles or sections of the Act, unless otherwise specified, are to subdivisions of the 'District of Columbia Income and Franchise Tax Act of 1947,' as amended.100.4 It is the purpose of the Act, as amended, to impose the following taxes in accordance with the definitions in Title 1 of the Act:- (a) An income tax upon the entire net income of every resident and every resident estate and trust; and

- (b) A franchise tax upon every corporation and unincorporated business for the privilege of carrying on or engaging in any trade or business within the District, and of receiving such other income as is derived from sources within the District, except those corporations and unincorporated business which are specifically excluded.100.5 The words and terms defined in § 4 of Title 1 of the Act, and elsewhere in the Act, shall have the same meaning as defined in the Act when used in this chapter.100.6 The term 'Deputy Chief Financial Officer' means the Deputy Chief Financial Officer of the Office of Tax and Revenue ('Office'), or his or her designee, agent, or representative.100.7 The reference in § 2 of Title III of the Act to obligations or securities of the United States, its agencies or instrumentalities relates only to obligations and securities which possess all of the following characteristics:- (a) Are evidenced by a written document;

- (b) Contain a binding promise by the United States to pay specified sums on specified dates;

- (c) Authorized specifically by the Congress of the United States pledging the full faith and credit of the United States; and

- (d) Provide for the payment of interest.100.8 Obligations or securities of the United States, its agencies or instrumentalities meeting the criteria set forth in § 100.7 shall include, but are not limited to, the following items:- (a) U.S. Savings Bonds;

- (b) U.S. Treasury Notes; and

- (c) U.S. Treasury Bills.100.9 Obligations or securities of the United States, its agencies or instrumentalities which shall not be exempt from taxation include, but are not limited to, the following:

1. (a) Interest on federal tax refunds; and
2. (b) Obligations merely guaranteed but not issued directly by the U.S. Government, such as Federal National Mortgage Association (Fannie Mae) and certain Government National Mortgage Association (Ginnie Mae) securities.100.10 The burden of showing that an obligation or security of the United States, its agencies or instrumentalities (the interest from which has been excluded from gross income) meets the criteria contained in § 100.7 shall be on the taxpayer claiming the exclusion.100.11 In the event of a change in tax rates during a taxable year and if a law does not otherwise provide, the following shall apply:- (a) A computation shall be made by applying to the taxable income for the entire taxable year the rate for the period within the taxable year before the effective date of change;
3. (b) Another computation shall be made by applying to the taxable income for the entire taxable year the rate for the period within the taxable year on or after such effective date; and
4. (c) The tax imposed is the sum of the following:
5. (1) An amount which bears the same ratio to the tax computed in paragraph (a) of this subsection as the number of days in the taxable year; and
6. (2) An amount which bears the same ratio to the tax computed in paragraph (b) of this subsection as the number of days in such period bears to the number of days in the taxable year.

AUTHORITY: Unless otherwise noted, the authority for this chapter is § 1 of the District of Columbia Income and Franchise Tax Act of 1947, 61 Stat. 359, as amended by § 601 of the District of Columbia Revenue Act of 1956, 70 Stat. 71, D.C. Code §§ 47-1816.1 and 47-1816.2 (1981 Ed.).

SOURCE: Commissioner's Order 56-1431 effective July 24, 1956; as amended by Regulation No. 71-6 effective February 25, 1971, 17 DCR 567 (March 8, 1971), 16 DCRR §§ 300.1, 301.1 through 301.3 and 309.1; by Final Rulemaking published at 32 DCR 1354 (March 8, 1985); and by Final Rulemaking published at 32 DCR 1776 (March 29, 1985).

EDITOR'S NOTE: The Office of the Chief Financial Officer of the District of Columbia published a Notice of Public Interest at 44 DCR 2345 (April 18, 1997) changing the name of the 'Department of Finance and Revenue' to the 'Office of Tax and Revenue.'