Starting a Business in Washington D.C.: Licenses & Permits (2026)

Last updated: February 26, 2026

Starting a business in Washington D.C. means registering your entity with the DC Department of Licensing and Consumer Protection (DLCP), obtaining a Basic Business License (BBL) before you open, and registering for the District’s franchise tax and sales tax with the Office of Tax and Revenue (OTR). Unlike most states, D.C. requires virtually every business to hold a BBL – there is no industry exemption for common activities. D.C. also levies an 8.25% business franchise tax on net income from unincorporated businesses and corporations alike, with a minimum tax tied to gross receipts. The District’s sales tax rate is 6.0% through September 30, 2026, increasing to 7.0% on October 1, 2026. This guide covers every required step for forming and operating a business in the nation’s capital using official DC government sources.

How to Start a Business in Washington D.C. (Step by Step)

Step 1: Choose Your Business Structure

Most D.C. small business owners choose between a sole proprietorship, a Limited Liability Company (LLC), or a corporation. An LLC is the most popular choice because it protects personal assets and is taxed as a pass-through entity by default.

Sole Proprietorship: No entity filing required to operate under your own legal name. If you use a business name other than your legal name, register a trade name (DBA) with DLCP. You bear full personal liability for all business obligations.
LLC: Formed by filing a Certificate of Organization (Articles of Organization) with the DC DLCP. Filing fee: $99 online or by mail; $199 in person. D.C. LLCs file a Biennial Report every two years – fee: $300, due April 1 in the year after formation and every two years thereafter. LLCs offer limited liability protection and pass-through taxation by default.
Corporation: Subject to D.C.’s corporate franchise tax of 8.25% on net income, with a minimum tax based on gross receipts. Better suited for businesses seeking outside investors. Consult an attorney to evaluate fit.

All D.C. entity filings are handled through the DLCP Corporations Division. Online filings available via My DC Business Center: mybusiness.dc.gov. Corporations Division fees reference: dlcp.dc.gov.

Step 2: Register Your Business

All LLC, corporation, and trade name filings are handled by the DC Department of Licensing and Consumer Protection (DLCP). The main site is dlcp.dc.gov and the online business registration portal is mybusiness.dc.gov.

Certificate of Organization (LLC): File online via My DC Business Center or by mail to DLCP. Fee: $99 online or mail; $199 in person. Processing is typically completed within 3-5 business days online.
Biennial Report: All D.C. LLCs must file a Biennial Report every two years and pay $300. The first report is due April 1 in the year after the calendar year of formation. Late filing incurs penalties. File via My DC Business Center.
Registered Agent: Every D.C. LLC must designate a registered agent with a physical D.C. street address (no P.O. Boxes) available during normal business hours. A DC-resident member or manager may serve as agent. Professional registered agent services typically cost $49-$150/year.
Trade Name / DBA: If you operate under any name other than your legal entity or personal name, register a trade name with DLCP. File via My DC Business Center. The filing fee varies by entity type.
EIN (Federal): Apply for a free Employer Identification Number from the IRS at irs.gov. Required for all entities with employees and for multi-member LLCs. Get your EIN before registering for DC tax accounts.

Step 3: Get Required Licenses & Permits

Washington D.C. requires virtually all businesses to obtain a Basic Business License (BBL) from the DLCP Business Licensing Division before operating. The BBL is issued with specific endorsements corresponding to the type of business activity you conduct. Key fees: $70 application fee + $25 per endorsement + 10% technology surcharge. The BBL must be renewed every two years.

Clean Hands Certification: Before a BBL will be approved, your business must certify it does not owe more than $100 to the DC government. Unpaid taxes or fees will block your application.
Home Occupation Permit: If your business operates from a residential address in D.C., you need a Home Occupation Permit before applying for a BBL. Expedited Home Occupation Permits are available online through My DC Business Center.
Certificate of Occupancy: If your business operates from a commercial address, a Certificate of Occupancy is required for that premises before a BBL is issued.
Industry-specific licenses: In addition to the BBL, many industries require separate professional or trade licenses – see the industry-specific guides below for full details.

Apply for a BBL online or in person at the DLCP Business License Center, 1100 4th Street SW, 2nd Floor, Washington, DC 20024. Phone: (202) 671-4500.

Step 4: Register for DC Taxes

D.C. taxes are administered by the Office of Tax and Revenue (OTR). Register online via MyTax.DC.gov at mytax.dc.gov.

Sales Tax: D.C.’s general sales and use tax rate is 6.0% through September 30, 2026. The rate increases to 7.0% beginning October 1, 2026 (per the Sales Tax Increase Delay Amendment Act of 2025). Register for a sales tax account with OTR via MyTax.DC.gov before you begin making taxable sales. More info: otr.cfo.dc.gov.
Business Franchise Tax (Unincorporated): D.C. levies a Unincorporated Business Franchise Tax at 8.25% on the net income of businesses operating in the District, including LLCs, partnerships, and sole proprietors with gross receipts over $12,000. Minimum tax: $250 if DC gross receipts are $1 million or less; $1,000 if DC gross receipts exceed $1 million. File Form D-30 annually.
Corporate Franchise Tax: For C-corporations, D.C. applies 8.25% on DC-taxable income, with the same minimum tax structure. File Form D-20 annually.
Individual Income Tax: D.C. has a graduated individual income tax. Sole proprietors and LLC members report business income on their personal returns and pay DC individual income tax at rates from 4.0% to 10.75% depending on income level.
Employer Withholding: If you have employees working in D.C., register for DC income tax withholding via MyTax.DC.gov. File withholding returns on a schedule determined by your withholding volume.
Unemployment Insurance: Register with the DC Department of Employment Services (DOES) within 30 days of hiring your first employee. Register online at does.dc.gov. Phone: (202) 724-7000.
New Hire Reporting: Report all new hires to the DC Office of Tax and Revenue within 20 days of the first day of work. Report online via MyTax.DC.gov.

Step 5: Get Business Insurance

D.C. employers with one or more employees are required to carry workers’ compensation insurance. Unlike a handful of states with monopolistic systems, D.C. allows coverage through private insurers or self-insurance (with approval). Workers’ comp in D.C. is administered by the DC Department of Employment Services (DOES), Office of Workers’ Compensation.

Who must carry workers’ comp: Every DC employer with one or more employees – full-time, part-time, or occasional. Coverage must be in place before the first day of work.
Where to obtain coverage: Purchase from any private insurer licensed to write workers’ comp in D.C. Large employers may apply for self-insured status through DOES. Contact DOES at (202) 724-7000.
General liability insurance: No blanket DC mandate for most businesses, but required for many BBL endorsements (contractors, childcare, food service) and commonly required by commercial landlords and clients. Typical small business policies run $500-$2,000/year.
Professional liability: Required for certain licensed professions (contractors, PIs, cosmetologists serving clients). Verify requirements with your specific licensing board.

DOES Workers’ Compensation Division: (202) 724-7000 | does.dc.gov

Washington D.C. Business Guides by Industry

Choose your industry for a detailed breakdown of every license, permit, and requirement:

Washington D.C. Business Resources & Official Links

Frequently Asked Questions

How much does it cost to form an LLC in Washington D.C.?

Filing a Certificate of Organization with the DC DLCP costs $99 online or by mail, or $199 in person. After formation, D.C. LLCs pay a Biennial Report fee of $300, due April 1 in the year after formation and every two years after that. You will also need a Basic Business License (BBL) before operating – fees start at $70 application fee plus $25 per endorsement plus a 10% technology surcharge. Total first-year costs typically range from $225 to $500+ depending on your business type and whether you use a professional registered agent.

Does Washington D.C. require a general business license?

Yes. Washington D.C. requires virtually all businesses to obtain a Basic Business License (BBL) from the DLCP Business Licensing Division before operating. The BBL is issued with endorsements specific to your business activity (cleaning, food service, childcare, etc.). The base fee is $70 application fee plus $25 per endorsement plus a 10% technology surcharge. The BBL must be renewed every two years at similar fees. Apply online via My DC Business Center at mybusiness.dc.gov or in person at 1100 4th Street SW, 2nd Floor.

What is the D.C. business franchise tax?

D.C. levies an Unincorporated Business Franchise Tax at 8.25% on the net income of businesses operating in the District, including LLCs and sole proprietors with gross receipts over $12,000. The minimum tax is $250 if DC gross receipts are $1 million or less, or $1,000 if DC gross receipts exceed $1 million. Corporations pay the same 8.25% rate under the Corporate Franchise Tax. This is separate from DC individual income tax (4.0%-10.75%) that LLC members and sole proprietors also pay on their personal returns.

What is Washington D.C.’s sales tax rate in 2026?

D.C.’s general sales and use tax rate is 6.0% through September 30, 2026. The rate increases to 7.0% beginning October 1, 2026, per the Sales Tax Increase Delay Amendment Act of 2025. D.C. has no local jurisdictions, so there is no additional local sales tax – only the single District-wide rate applies. Register for a sales tax account with the Office of Tax and Revenue via MyTax.DC.gov before making taxable sales.

What are the workers’ compensation requirements for DC employers?

Every DC employer with one or more employees – full-time, part-time, or occasional – must carry workers’ compensation insurance before the first day of work. Unlike states with monopolistic workers’ comp systems, D.C. allows coverage through private insurers licensed in the District or approved self-insurance. Workers’ comp is administered by the DC Department of Employment Services (DOES), Office of Workers’ Compensation. Contact DOES at (202) 724-7000 or visit does.dc.gov.

When is the Washington D.C. LLC Biennial Report due?

D.C. LLC Biennial Reports are due on April 1 in the year following the calendar year your LLC was formed, and every two years after that. The filing fee is $300. If your LLC was formed in 2026, your first Biennial Report is due April 1, 2027. File online via My DC Business Center at mybusiness.dc.gov. Failure to file can lead to forfeiture of your LLC’s good standing and ultimately dissolution.

Business Guides for All States

Browse LLC formation, licenses, and permit requirements for every U.S. state.

About the Author

Robert Smith has run a licensed private investigation firm for 8 years from the Florida-Georgia state line - where he learned firsthand how wildly business licensing rules differ between states just miles apart. He personally researched requirements across all 50 states and D.C., reviewing hundreds of government sources over hundreds of hours to build guides he wished existed when he started. Not a lawyer or accountant - just a business owner who has done the research so you don't have to.

Learn more about our research process