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Washington DCBusiness Brokers Group (202) 555-0174

File Your Final DC D-30 After a Business Sale

DC closing paperwork guide by Washington DC Business Brokers Group · Updated October 18, 2026

If your District company is a partnership, an LLC taxed as one, or a sole proprietorship, the year you sell ends with one more D-30. Since 2021 that return can carry a large bill.

Washington DC Business Brokers Group wrote this so the tax on your sale is in your numbers before you sign.

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A business owner and her accountant at a desk going over a printed tax worksheet with a calculator and laptop

Steps for the year you sell

  1. Ask your CPA which DC return your company files today: the D-30 or the D-20.
  2. Have the CPA estimate DC tax on the expected gain before you agree on price and structure.
  3. Set aside cash for the DC franchise tax from the sale proceeds at closing.
  4. Keep filing returns on time through the closing date.
  5. File the final D-30, marked final, or the final D-20 by the due date for your tax year.
  6. Close the remaining DC accounts once the final returns are accepted.

The tax most owners outside DC have never heard of

Most places tax a partnership's income only once, on the owners' personal returns. The District also taxes the business itself. That tax is the unincorporated business franchise tax, filed on the D-30.

It applies to unincorporated businesses with gross income over $12,000. That covers partnerships, LLCs taxed as partnerships and sole proprietors. The rate is 8.25% of DC taxable income.

Part of the reason it exists is the regional workforce.

Many owners of District businesses live in Maryland or Virginia, and DC cannot tax a Maryland or Virginia resident's income. The D-30 lets the District tax the business earnings at the business level instead.

This guide covers companies located in the District. A company based in Maryland or Virginia follows that state's rules instead, and its CPA handles those filings.

What changed in 2021

For years, a terminating business could leave the gain on its final sale off the D-30. Owners who sold out and closed up could count on that.

That rule is gone. For tax years from January 1, 2021, DC ended the exclusion. The gain on a final sale is now DC taxable income on the D-30, taxed at the same 8.25% as the rest of the company's income.

The effect is easy to underestimate. At 8.25%, every $1 million of DC taxable income means $82,500 of franchise tax. On an asset sale with a large gain, that can change what you actually take home.

Older advice, from a friend who sold before 2021 or from an advisor who has not checked lately, may still describe the old rule. Make sure your CPA is working from current law.

What reduces the D-30

The D-30 is not a flat 8.25% on everything. Two items take some income off the top before the rate applies:

  • A salary allowance for owners. Official sources describe it as up to 30% of net income for the services owners provide.
  • A $5,000 exemption. It is prorated if the business operated for only part of the year, which is common in the year of a sale.

Even with a loss, a minimum tax applies. So a business that winds down at a loss still owes something and still files.

How the allowance and exemption apply to a year that includes a large sale gain is a question for your CPA. Do not assume the allowance stretches over the gain the way it does over operating income.

Corporations file the D-20 instead

If your company is a corporation, it files the corporate franchise tax return, the D-20, rather than the D-30. The rate is the same 8.25%.

A corporation that sells its assets reports the gain on its D-20 like other income.

A sale of the shares themselves is a different transaction, and who reports what depends on the structure. Your CPA and attorney should map that out with you before the letter of intent.

The final return

A business that stops operating must still file a final return. On the D-30 you mark it as final, so OTR knows not to expect more.

For calendar year filers the D-30 is due April 15 of the year after the sale. If your company uses a fiscal year, ask your CPA for the due date that applies.

File the final return electronically through MyTax.DC.gov like your regular returns. Keep copies with your closing documents. Buyers and lenders sometimes ask for proof that final returns were filed before releasing escrow.

How it fits with your personal taxes

The D-30 is a tax on the business. Your own income tax is a separate matter, and it depends on where you live.

DC residents pay District income tax at rates from 4% to 10.75%. DC has no lower rate for capital gains; gains are taxed as ordinary income. Owners who live in Maryland or Virginia file with their own state.

Whether the D-30 reduces what you owe on your personal return, and how, is a question only your CPA can answer for your situation. We do not give personal tax advice, and you should not plan around a general rule.

Price the tax into the deal

Taxes on a sale often cost more than the broker's commission. That is why the time to model the D-30 is before you agree on price and structure, not after.

Ask your CPA to run your expected sale through the D-30 or D-20 early. Then you can compare offers on what you keep, not just the headline number. Our valuation guide covers how buyers set that headline number in the first place.

If your company owns DC real estate, check the economic interest transfer tax as well. In an asset sale, the buyer will also mail OTR a bulk sale notice, and any open DC tax will come up then.

If you are weighing a sale and want to know what your District company might bring, send a short request or call (202) 555-0174.

Call (202) 555-0174