(Washington, DC) The Office of Tax and Revenue (OTR) announced today that the United States Supreme Court let stand a DC Court of Appeals ruling in favor of the District in the case of the District of Columbia v. Bender.

The decision of the DC Court of Appeals holds that the District’s unincorporated business franchise tax applies to a nonresident partner’s share of a real estate partnership’s net income if that income is derived from the operation of an unincorporated business within the District. The appeals court also held that such a tax does not violate the DC Home Rule Charter’s prohibition against imposing a tax on the personal income of nonresidents.

With the appeals process ended, OTR will begin to take the appropriate step of rejecting all pending claims for refunds of unincorporated business franchise tax payments that are based on the Superior Court decision, which was reversed by the DC Court of Appeals.

“The Supreme Court’s action in this case upholds the legality of our current tax structure and protects the District’s revenue stream,” said Sherryl Hobbs Newman, deputy chief financial officer for tax and revenue.

For more information, contact OTR Assistant General Counsel Alan Levine at (202) 442-6500.