How to Start an LLC in Washington D.C. (2026 Guide)
Washington D.C. charges just $99 to form your LLC — genuinely affordable. But most default LLCs here owe a tax almost no other jurisdiction in this series has: the Unincorporated Business Franchise Tax, an 8.25% tax that catches freelancers and small business owners off guard more than anything else in D.C.'s process.
To start a D.C. LLC, file Articles of Organization with the Department of Licensing and Consumer Protection (DLCP) for $99 — online through BOSS, by mail, or in person. Every LLC then files a Biennial Report ($300) — not annual, but every two years — due April 1 of the year after formation, then every two years after. Most default LLCs also owe the Unincorporated Business Franchise Tax (UBT): 8.25% of net income, for any LLC with D.C.-sourced gross receipts over $12,000. LLCs where more than 80% of income comes from personal services and capital isn't a major income factor are generally exempt.
- State filing fee
- $99
- Filed with
- DLCP (formerly DCRA)
- Biennial Report
- $300 · every 2 years, due April 1
- Unincorporated Business Franchise Tax
- 8.25% of net income, if >$12,000 gross
- Personal-services exemption from UBT
- Yes — if >80% personal services
- Late report penalty
- $100 — grace period to Sept 1
What to Know Before You Form in D.C.
D.C.'s formation cost is genuinely low, but its ongoing tax picture is more distinctive than most states in this series. What's worth understanding clearly before you commit:
- A $99 formation fee — one of the more affordable filing fees anywhere in this series.
- A Biennial Report, not an annual one — $300 every two years, rather than a smaller fee every single year.
- A real entity-level tax most default LLCs owe — the Unincorporated Business Franchise Tax, covered in depth below.
- A system transition underway — DLCP is launching a new platform called BOSS in August 2026, replacing the current BOSS system; expect possible temporary service interruptions around that time.
D.C.'s Unincorporated Business Franchise Tax genuinely surprises new LLC owners more than any other single detail in this guide. Most default LLCs — those taxed as sole proprietorships or partnerships — with D.C.-sourced gross receipts over $12,000 owe this tax: 8.25% of net income, filed annually via Form D-30, completely separate from your Biennial Report. There is a real exemption for many solo consultants and freelancers — see Step 8 for the full breakdown before you assume this doesn't apply to you.
How to Start a D.C. LLC in 8 Steps
Your name must be distinguishable from every D.C. entity and contain "LLC" or "Limited Liability Company." Search free through the DLCP.
D.C. permits a listed commercial agent or a noncommercial agent: an individual or domestic/foreign entity serving in the District, a designated office/position holder, or a D.C. Bar member in good standing with a District office. Use the required physical District address and obtain consent. Residence outside D.C. alone does not force purchase of a commercial service.
File the Articles of Organization
$99, filed with the DLCP — online through BOSS, by mail, or in person.
A written agreement helps record company terms. Mandatory law still applies; check each bank’s requirements.
Get Your Free EIN from the IRS
Your federal tax ID for banking, hiring, and D.C. Office of Tax and Revenue registration. Always free at IRS.gov.
File Your Biennial Report
$300 to the DLCP every two years, plus a possible Unincorporated Business Franchise Tax to the Office of Tax and Revenue.
Get Business Licenses & Permits
D.C. requires a Basic Business License for most businesses — genuinely different from many states with no general license.
Review UBT, individual income tax and the current sales-tax rules. The District’s general sales-tax rate remains 6% through September 30, 2027; OTR postponed the planned 7% increase. Special products and activities can have different rates.
What a D.C. LLC Really Costs (2026)
| Cost Item | Amount | When |
|---|---|---|
| Articles of Organization (required) | $99 | One-time, at formation |
| Biennial Report (required) | $300 | Every 2 years, due April 1 |
| Unincorporated Business Franchise Tax (if applicable) | 8.25% of net income, $250–$1,000 min. | Annual, via Form D-30 |
| Registered agent service (optional) | Current provider quote | Annual, if hired |
| Name reservation (optional) | $50 · valid 120 days | If reserving before filing |
| EIN from the IRS | $0 — always free | At IRS.gov |
Bottom line: $99 to form and $300 every two years to maintain — genuinely affordable for a founder who qualifies for the UBT's personal-services exemption. Multi-member LLCs and capital-intensive businesses should budget the UBT as a real, recurring cost. Model your exact setup below.
D.C. LLC Cost Calculator
D.C. LLC Cost Calculator
First-year + 5-year totals · Check current official instructions
Excludes individual income tax and sales tax. The Biennial Report is $300 every 2 years, not annual — modeled accordingly across the 5-year total.
The Unincorporated Business Franchise Tax
This is worth its own section because it's the single most consequential tax detail in this entire guide: LLCs taxed as sole proprietorships or partnerships (the default for most LLCs) with D.C.-sourced gross receipts over $12,000 owe the Unincorporated Business Franchise Tax — 8.25% of net income, after a 30% salary allowance and a $5,000 exemption. A minimum tax applies even at zero or negative net income: $250 if gross receipts are $1 million or less, $1,000 above that. Exemption: LLCs where more than 80% of gross income comes from personal services rendered by the members, and capital isn't a material income-producing factor, are generally exempt. See Step 8 for the complete breakdown.
D.C. LLC Taxes at a Glance
The District’s general sales-tax rate remains 6% through September 30, 2027; OTR postponed the planned 7% increase. Special products and activities can have different rates.
Ahmad Adil's Take: D.C. genuinely deserves a more careful read-through than most states in this series, because the $99 formation fee and $300 biennial report make it look simpler than it actually is. If you're a solo consultant whose income is genuinely personal-services-based, you're likely exempt from the UBT and D.C. becomes a very reasonable place to form. If you're running a business with real capital investment, inventory, or multiple members splitting profit from something other than direct personal services, budget the 8.25% UBT as a real cost from day one — this is the detail that catches more D.C. founders off guard than anything else in the entire formation process.
- ✓Optional formation assistance; confirm filing scope, service pricing and submission responsibilities. Government fee reference: $99 filing fee.
- ✓Optional formation assistance; confirm filing scope, service pricing and submission responsibilities.
- ✓Confirm registered-agent eligibility, coverage, included periods and renewal charges.
- ✓Review address-use rules and privacy policies; a service does not remove all information from public filings.
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Domestic and foreign filing fees
Domestic Articles cost $99. The Biennial Report costs $300 with a $100 late fee. Foreign registration costs $220 and is a different filing. The District’s general sales-tax rate remains 6% through September 30, 2027; OTR postponed the planned 7% increase. Special products and activities can have different rates.
Washington D.C. LLC — FAQ
Ahmad Adil is the founder and CEO of LLC School. For filing and ongoing compliance, confirm the requirements with the responsible state agency. This is educational information, not legal or tax advice.
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