Nationals Park in Washington, DC is home of the Washington Nationals and the venue for many great concerts and events. But did you know that government contractors across the country may be sharing in the costs for the park?
Well it is true and it should be on the radar screen of any contractor generating receipts within the District. The revenues received by the District from the ballpark fee are deposited into the Ballpark Revenue Fund and used for payment of the debt service on the bonds issued by DC to finance the construction of the National’s new baseball stadium.
The “ballpark fee” is imposed on any business generating $5 million or more within the District of Columbia. So any government contractor with employees at a federal facility in the District must pay this tax, regardless of where the contractor is located and despite not having an office in Washington.
The ballpark fee is effectively a gross receipts tax on all revenue generated by a business in DC. “Gross receipts” under the law “means all income derived from any activity whatsoever from sources within the District.” This very broad, all-encompassing definition only excludes the collection of federal or local taxes on motor vehicle fuel or fees retained by a retail establishment from the disposable bag fee. As with any “tax,” penalties and interests are assessed in the event of late payments of the annual ballpark fee. Payment for the fee is due by June 15 of each year. The fee schedule provides that businesses will pay an amount based on a fixed scale between $5,500 to $16,500, based on gross receipts of $5M to $16M or more (D. C. Code § 47-2762(b).)
While the ballpark tax received publicity during planning and construction of the stadium, it may not have been the topic of discussion outside the beltway or you may not have thought it pertained to you. The message is to be sure that your accountant is aware of this fee and that, as you approach $5 million in receipts within the District, you should plan for this additional fee. Failure to pay can result in large penalty and interest payments.