D.C. Ruling Presents Franchise Tax Opportunity

Brian Strahle
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Based on a recent D.C. Court of Appeals ruling, taxpayers who are based outside D.C., but have a sufficient number of employees performing “qualifying high-technology” work at a fixed location in a high-technology zone for a sufficiently extended period of time may qualify for D.C.’s franchise tax exemption for qualified high-technology activities. In other words, even if the taxpayer does not maintain it’s own office or base of operations in D.C., it may still qualify for the exemption.

The D.C. Court of Appeals ruling involved a Virginia based corporation that provided information-technology products and services primarily to the federal government on the basis of large, long-term contracts.

The opportunity will be determined based on the facts and circumstances of each taxpayer.

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