DC's 15.95% Hotel Tax Was Due to Drop in 2027. The FY2027 Budget Kept It.

By Matt Spaulding · November 9, 2026

Photo: Martin Falbisoner, CC BY-SA 3.0, via Wikimedia Commons

A hotel room in DC is taxed at 15.95%. One point of that is a 1% surcharge that was due to lapse after 30 September 2027, which by our arithmetic would have taken the room back to 14.95%. The FY2027 Budget Support Act deleted that end date, so the 15.95% doesn't drop in October 2027. The rate itself did not go up.

The four pieces of the 15.95%

The DC Code builds it from four rates on the room charge. The largest is 10.20%, the sales tax piece: D.C. Code 47-2002(a)(2)(A) says "The rate of tax shall be 10.20% of the gross receipts from the sale of or charges for any room or rooms". Another 4.45% sits in 47-2002.02(1)(A), and 0.3% in 47-2002.03a(a)(1). Neither has an end date. The fourth is the 1%, a separate, additional surcharge in 47-2002.03a(a)(2) on room charges since 1 April 2023.

Add them up and you get 15.95%, the figure OTR's Sales and Use Tax FAQ gives for "Rooms, lodgings, or accommodations". OTR's notice of 13 February 2023 says the total "is increased from 14.95 percent to 15.95 percent" from 1 April 2023.

We found no tourism improvement district or other per-night government assessment on DC hotel guests. Destination DC is paid for out of room-tax money the Code sets aside, so it puts no separate charge on your bill.

How the 1% lost its end date

OTR's 2023 notice set the 15.95% to run from 1 April 2023 to 30 March 2027. A notice from 1 October 2025 extended it to 30 September 2027, which OTR attributes to the Hotel Surtax Amendment Act of 2025. The FY2027 Budget Support Act (Bill 26-661, Sec. 7012(b)(1)) then strikes the words that ended the 1% surcharge on 30 September 2027 and leaves it applying to charges on or after 1 April 2023.

The CFO's fiscal impact statement of 13 April 2026, written on the bill as introduced, says the subtitle "indefinitely extends a separate, additional 1 percent sales tax on hotel rooms". The revenue letter of 30 September 2026 treats the change as enacted. The 1%, it says, was "previously set to expire" and "will now continue throughout the plan", with a change in where that money goes from FY2028.

The bill as introduced in April 2026 also carried an 80-cent nightly fee on occupied hotel rooms. It was gone from the Council's July 2026 text, dropped before the vote.

Two government pages hadn't caught up with the FY2027 act when we read them on 9 November 2026. The DC Code page for 47-2002.03a still ended the 1% on 30 September 2027, and OTR's Taxable and Non-Taxable Services page still said the 15.95% was extended until that date. OTR's Sales and Use Tax FAQ lists 15.95% with no date.

How booking screens show it

We read the booking screens at 68 DC hotels on 29 October 2026, for two adults in one room, one night between 17 November and 8 December, and stopped at the rate details. Ten screens printed a percentage for the room tax, and every one of them printed 15.95%. Six more showed a tax line with no percentage, such as "Occupancy Tax" at The Darcy and "Lodging Tax" at The LINE DC. Most of the rest showed no tax line that far in.

InterContinental Washington D.C. prints "Accommodation Tax 15.95% on rate, per night". Four more print the same 15.95% under their own names: "Rooms Tax" at the Kimpton Banneker Hotel, "Occupancy Fee Tax" at the Kimpton Hotel Monaco Washington DC, "DC Lodging Tax" at The Watergate Hotel and "Room Tax" at The Churchill Hotel Near Embassy Row. At The Jefferson the itemized rate carries one "Hotel/Occupancy Tax" line at 15.95%, and the screen at Rosewood Washington, D.C. reads "Tax 15.95 percent per night". Neither screen listed a fee.

The Holiday Inn Washington-Capitol prints "Taxes: 15.95% per night not included in rate", and the Capital Hilton says its price "excludes taxes and government charges". Marriott's rate list at the Washington Marriott Marquis showed no tax line with "Show with taxes and fees" switched off; the tax comes later. Accor's screens put it inside the price. The Sofitel Washington DC Lafayette Square lists "Taxes and fees included", and the Fairmont Washington, D.C., Georgetown shows its total the same way. The Four Seasons Hotel Washington, DC shows no tax line at all, only an ALL-IN PRICE switch. With it on, each of four room prices we read was the rate plus exactly 15.95%, by our arithmetic.

Where a screen puts a tax line on a hotel's own nightly fee, we worked it out from the screen's own dollar lines, and at every one the tax was 15.95% of the fee, rounded to the cent. At that rate a $37 fee becomes $42.90 a night. The Monaco's screen reads "Additional charges (Guest Amenities Fee) of $37 ($42.90 after tax)", and the Kimpton George Hotel shows the same fee and total. The Watergate gets there with an "Urban Resort Fee Tax" of $5.90 on its $37 Urban Resort Fee. A $30 fee comes to $34.79, at the Banneker and at Melrose Georgetown Hotel, which folds the tax into one line: "Historic Preservation Fee ($30 + tax) $34.79". The InterContinental's $35 Guest Amenities Fee picks up a "Guest Amenities Fee Tax" of $5.58, so $40.58.

At the Churchill a $26 historic preservation fee carries a "Historic Fee Tax" of $4.15, which makes $30.15 a night. The LINE's $27 amenity fee has $4.31 of "Amenity Fee Tax" on it, $31.31 together. The Darcy labels its $4.81 "Occupancy Tax Fee", on a $30.18 Amenity Fee, and the two come to $34.99; the hotel's FAQ rounds that to $35. These are the screens' own labels. None of the government sources we read names any of these fees.

Hotel Washington and The Graham Georgetown itemize a Destination Fee with no tax line beside it, so you can't tell from either screen whether the fee is taxed.

Parking at 18% and the sales tax at 7%

DC taxes parking at 18% (D.C. Code 47-2002(a)(1)), and OTR's FAQ lists "Parking or storing of motor vehicles or trailers" at 18%. We found no government page that says whether the 18% covers a hotel's overnight valet. Two hotels name the 18% in their own valet prices: The Hay-Adams quotes its overnight valet inclusive of 18% tax, and Hotel Madera quotes valet plus the 18% DC parking tax. Other hotels write "plus tax" or "tax included", and some don't mention tax at all. The FY2027 budget's parking changes exempt District-run street parking and drop a WMATA-lot exception, and neither applies to hotel parking.

The general sales tax is 6% now and goes to 7% on 1 October 2027. Sec. 7002 of the same act sets that schedule, and it pushed back an earlier one that had the 7% starting on 1 October 2026 (OTR's 1 October 2025 notice). Rooms aren't on that schedule. They carry their own 10.20% in 47-2002(a)(2)(A), and the act leaves that paragraph alone. None of the government pages we read says outright that the 7% skips hotel rooms, so that last part is our reading of how the Code is laid out.

The Sofitel and the Capital Hilton side by side

Six of the hotels above are in Downtown and the White House, the Sofitel and the Capital Hilton among them. A Sofitel price already has the tax in it and a Capital Hilton price doesn't (both screens as we read them on 29 October 2026), so add roughly 15.95% to the Hilton one before you compare the two.