The Superior Court of the District of Columbia (Tax Division) recently ruled that D.C.’s law granting hotel and sales tax exemptions to charitable nonprofits with offices in the District but denying them to those without an office in the District violated the United States Constitution’s Commerce Clause and is thus unconstitutional. The Commerce Clause prohibits states, including the District, from discriminating against out-of-state entities when they participate in the State or District’s economy.
The court ruling was issued as part of a class action lawsuit, American Philosophical Association v. District of Columbia, 2019 CVT 000003. The D.C. law at issue limited exemption on hotel and sales taxes to “semipublic institutions” with offices in the District but denied such exemption for organizations without an office in the District.
The court’s ruling opens the door for nonprofit organizations without offices in the District to obtain a refund of hotel and sales taxes paid for events held in the District between 2016 and the present.
Who May Be Eligible?
If it meets the following requirements, your organization may qualify for a refund of hotel and sales tax, plus interest, for events held in D.C.
- Is a “semipublic institution,” defined as “any corporation, and any community chest, fund, or foundation, organized exclusively for religious, scientific, charitable, or educational purposes, including hospitals, no part of the net earnings of which inure to the benefit of any private shareholder or individual.” This encompasses 501(c)(3) organizations.
- Held one or more events between 2016 and the present at any of the following 18 D.C. hotels: Washington Hilton, Marriott Marquis, Renaissance Washington, Omni Shoreham Hotel, Grand Hyatt, Mayflower Hotel, Hyatt Regency, JW Marriott, Capital Hilton, Willard Intercontinental, Marriott Wardman Park, Fairmont, Mandarin Oriental, Watergate Hotel, Hilton D.C. National Mall, Marriott Georgetown, Washington Marriott at Metro Center, Westin Washington City Center.
- Paid D.C. sales or hotel occupancy taxes on those events that would have been exempt from such taxes but for the D.C. residency requirement.
What You Can Do Now
- Review your event history in D.C., going back to 2016.
- Check your hotel invoices for occupancy and sales tax payments.
- Visit dctaxrefundclassaction.com or call class counsel at 1-914-934-9200 (Klafter Lesser) or 1-202-326-7939 (Kellogg, Hansen) to learn more.
- If eligible, submit your claim via dctaxrefundclassaction.com or print and mail this form. Please note that forms must be submitted online or postmarked no later than June 6, 2025.
Why This Matters
Due to this restrictive local law, this case impacts thousands of nonprofits without offices in D.C., which have long faced higher costs to host events in the city. The Court’s verdict not only provides refunds for past events but also eliminates a cost barrier for nonprofits to host future conferences and programs in D.C.
